Travel: BA's rebranding is costing the airline pounds 60m, compared with about 60 pence for EasyJet's corporate image

There are two good things about the Monday morning EasyJet flight from Nice to Luton: the fare (I paid pounds 155 return, compared with the lowest quote of pounds 242 on British Midland), and the likelihood that EasyJet's owner, Stelios Haji-Ioannou, will be on board, flying back from his Monaco apartment. You find yourself agreeably positioned to pass on your views to the man who started the airline.

You can't miss him - he is the large, genial gentleman who walks the length of the plane, soliciting comments while trying hard to conceal his delight that every seat on his favourite flight is sold.

No need, apparently, for an expensive loyalty scheme like air miles; the only time EasyJet has tried that approach was in March, when full- fare passengers from Aberdeen were each given a bottle of whisky - with the strict instruction to save it for the office party if the company had bought the ticket.

A jolly jape from a jolly chap. But last Monday I got him talking about British Airways, and for a moment the smile abated.

Here's why. Since Mr Haji-Ioannou started EasyJet 19 months ago, the airline has built up something approaching a European network, with Luton airport at the hub. You can reach any of four airports in Scotland for pounds 29, Amsterdam for pounds 35 or Barcelona for pounds 49. Or rather, you can't, because Air Passenger Duty is charged. By November, when it is due to double to pounds 10 within Europe, tax will add 35 per cent to the cost of EasyJet's cheapest ticket - twice the rate of VAT.

"I'm sure British Airways had something to do with the decision to keep APD at a uniform level rather than going for a percentage. If the tax was levied at 5 per cent instead, then my passengers would pay about the same for a return journey as they do now. A Concorde passenger would have to pay pounds 250. So it suits BA to maintain the flat rate, penalising people travelling on cheaper flights."

A BA spokesman describes this as "a scurrilous accusation, without any foundation. The tax cannot be levied on a percentage basis because of EU regulations. BA is opposed totally to the tax, and to say we had an influence over the Chancellor's decision is just plain wrong."

Meanwhile, BA's attention has been focused on the relaunch of its corporate image. The rebranding exercise is costing the airline pounds 60m, compared with about 60 pence for EasyJet's image: it simply involves painting planes with the airline's phone number in large, bright orange figures.

The next new EasyJet destination is Geneva, starting in November. But why hasn't Mr Haji-Ioannou started flights to Berlin? In the absence of low-cost air services, the only budget options are to hitch there from Rotterdam or jump from one of the cheap Polish buses that bowl past Berlin en route to Warsaw. But EasyJet says "nein" -too few Germans have credit cards, an essential for an airline that sells only direct.

What about EasyJet taking its no-frills approach across the North Atlantic to the land where credit cards are mandatory; would Mr Haji-Ioannou follow the no-frills idea first adopted by Freddie Laker, where you had to queue up for three days for a standby ticket? Or the example of PeopleExpress, which flew from Gatwick to New York in the 1980s and charged extra for baggage? "No chance. The economics just don't add up. I have an agreement with Phil Condit, who runs Boeing. If I ever go to his office and ask him for a 747, he'll throw me out."

A fun flight, then, in contrast with my awkward outbound trip - a journey that amused only the taxi drivers on the Riviera. My destination was beyond St Raphael, 90 miles along the coast from Nice. But the EasyJet evening flight arrived late and I missed the last train. "How much," I asked the drivers, "would a taxi cost?"

Eventually the laughter subsided sufficiently for me to learn that the non-negotiable fare was 1,500 francs - about pounds 165. I found a cheap hotel room and continued next morning, a bit poorer but much wiser.

Also on Monday, I enjoyed my best airline meal for a long time: fresh bread, tasty cheese and tangy tomatoes with more flavour in a single pip than the ones at my supermarket. This was a picnic I assembled at Nice market because EasyJet offers no in-flight meals. Occasionally, no frills are better than some.