British Airways
... So it is not the first time he would do a deal with a rival ...
In the 1990s, SRB tried very hard to do a deal with British Midland but it never proceeded. Now, there are many who do not like Branson and his ways and so there are conflicting view and reports as to why it did not happen. But the force being BM/bmi was Sir Michael Bishop and he (it seems clear to me) did not want to do business with SRB.
Also, VS is now a mature business and has to calculate it's risks very differently.