Airline reviews British Airways History

British Airways History

The history of British Airways dates back a long way, to 1935 when a number of small British air transport companies merged to form the original privately owned British Airways Limited. Separately there was Imperial Airways Limited, which in turn was formed in 1934 out of Handley Page Transport, along with British Marine Air Navigation Co Ltd, Daimler Airways and Instone Air Line. The link enabled Imperial to develop routes throughout the Empire to India, Africa and even Australian (terminating in Canberra). Imperial Airways and British Airways were merged and nationalised at the outbreak of war in 1939 to form the British Overseas Airways Corporation (BOAC).

After the war, BOAC operated long-haul services from Britain, while Continental European and domestic flights were operated by British European Airways Corporation (BEA) a new entity which nationalised the scheduled services of existing UK independent airlines.

By 1952 Britain was leading the world in the development of jet airliners, and BOAC became the world's first airline to operate them, with the inaugural flight of the de Havilland Comet from London to Johannesburg. By 1958 it replaced this fleet with the upgraded Comet 4 models in 1958, that were less likely to split open in flight. By 1960 BOAC was using the new Boeing 707–400 from Heathrow Airport to New York, and expanded slowly around the globe.

BOAC and BEA started to merge following the 1967 inquiry into Civil Aviation, as a result of which in 1971 the British Airways Board was formed to control all the activities of BOAC and BEA, followed a year later by the combining of the management, and then the physical operations of the separate airlines came together as British Airways on 1 April 1974, which at the time has the world's largest network of routes, and which also saw the introduction of the Union Flag scheme painted on aircraft tail fins.

British Airways inherited a mix of almost geriatric aircraft from its predecessors, and quickly retired many to take on American made aircraft: the rejection of European planes from Airbus caused huge political problems for the UK, which was seeking integration into the European Community, however BA pressed ahead with the purchase of Lockheed L-1011 TriStars, Boeing 737 and 757 (some of which have only just been retired).

The government meanwhile was keeping a close eye on competition between British Airways and British Caledonian, the second-biggest airline in Britain at the time, and decided that competition was a bad thing. In an unusual ruling in 1976, an unusual new "spheres of influence" policy prevented competing scheduled services on long-haul routes. British Caledonian withdrew from African and US routes, and became the sole British flag carrier to South America.

In 1976, British Airways commenced flying the Concorde, making it one of only two airlines to own and operate the supersonic Aerospatiale-BAC jetliner, which from the launch was a commercial failure, however by 1981 BA recognised the advertising value they brought, and purchased all the remaining unsold Concordes for song from the government, and turned a profit within a year by raising ticket prices on corporate tickets (where the executive flying had little idea of what they were paying) and selling cut price package tours to closer destinations. BA also hit on a cunning ploy of guaranteeing a certain number of Concorde upgrades in return for corporate accounts with the airline.

For many years however the airline wasn't profitable: indeed, successive government incurred thumping losses, and were determined to be rid of the giant: in what is now seen as a classic example of private enterprise to have the nerve to cut where the state couldn't, the fleet and route map were culled, and over 23,000 jobs were shed in the early 1980, but BA managed to get the government to pay out redundancy, and then take future profits itself.

In 1986 the newly constructed Heathrow Terminal 4 gave BA the chance to consolidate, and it also used this as a chance to axe the Trident, VC10 and Boeing 707, and then the UK flag carrier was ready for privatisation and float in February 1987. It was so successful that by July 1987, BA announced the controversial takeover of British Caledonian, to avoid the airlines collapse. Mainstream routes were merged and competition removed, but as a PR move the Caledonian name was kept flying by rebranding a subsidiary that flew charters, British Airtours, as Caledonian Airways.

Much of the competition has therefore been removed by a takeover by BA, and BA we protected by the Bermuda II agreement: only two UK carriers were allowed access to London Heathrow. However by 1984 one of these was Virgin Atlantic. Following the so called “campaign of dirty tricks", Richard Branson sued British Airways for libel in 1992. BA settled for £500,000 which was given to Branson and a further £110,000 to his airline. Richard ranson divided the compensation among his staff, which was called the "BA bonus, but British Airways and Virgin Atlantic have continued to be bitter rivals.

British Airways was now vastly profitable. It sat on a pot of money, and used it to buy many smaller rivals. In a similar fashion to Caledonian Airways in 1992, BA absorbed the smaller UK carrier Dan-Air which had routes from Gatwick, and so was able to dramatically increase its presence there. The same year it also bought Delta Air Transport and renamed it Deutsche BA as a German domestic airline. It did the same trick in France, by purchasing a half share in TAT European Airlines and 70% of Air Liberté in 1997, in Australia where it purchased a 25% stake in Qantas, a 24% stake in American airline USAir (although it tried to buy half, but the US government was worried about foreign dominance), and wholly acquired Brymon Airways to form BA Connect on UK domestic routes.

So prosperous was British Airways now, by the mid 1990s it could replace most of its fleet in one go, and bought the Boeing 747-400 the 777. Although holding out against buying anything that wasn't American for a long time, at its peak in 1993 it also made a small purchase from Airbus of A320: these were somewhat of a success, and BA has continued to buy more of this type.

However by 1996 things were starting to go downhill, along with the UK economy. British Airways was hit hard by the strong pound and high oil prices, and tried to make cuts which were strongly resisted by the unions. Strikes cost hundreds of millions of pounds. To make up the loss, BA sold its share in USAir which was valued at $500 million. To make up for this cutback, it tried to partner with American Airlines, however the US insisted that BA would have to sacrifice of landing slots at Heathrow, and the regulatory authorities at the time also insisted on other esoteric quirks, such as rules ensuring that Frequent Flyers couldn't earn miles on each other's schemes between the US and the UK.

A controversy over tailfins in 1997 saw the Union Flag tailfin livery in favour of what were called world design tailfins; the aim was to appear a more cosmopolitan airline, but the tailfins, some of which were crude if colourful, were not well received and cost hundreds of thousands of pounds at a time when the airline was making hundreds of people redundant. Virgin Atlantic took advantage of BA's PR blunder, and declared that it was to become "Britain's national flag carrier". By 1999 the process was scrapped, and by 1999 all newly-delivered and overhauled BA planes were once again painted with the Union Flag, based on a design first used on Concorde.

British Airways established a low-cost offshoot called Go in 1998: it took over many of BA's bucket and spade routes, and was eventually sold to Easyjet in 2002, at which point BA started to fly to some of these destinations again.

In September 1998, British Airways became a founding member of the oneworld airline alliance, but this couldn't stop the slump in profits: by 1999 they were down by half, and BA heavily reduced capacity, cancelling Boeing 747–400 orders in favour of the smaller Boeing 777-200ER, and sticking firmly with the Airbus A320 for short haul flights. Worse was to come following the crash of an Air France Concorde in 2000, which resulted in massively expensive safety modifications, however Concorde was ready to fly again just before the September 11th attacks in New York in 2001. Passenger numbers slumped along with profit, and Concorde was axed in 2003, along with the Boeing 747-200 and several Boeing 767 aircraft. Several offshoot companies like Deutsche BA were sold, as was the investment in Qantas which by 2004 raised £425 million

To take on the low-cost carriers, British Airways heavily promoted the full-service nature of its services, with free food, drink and bags: however this turned into a PR disaster with a catering strike in 2005.

In 2004 the UK regional arm of BA was rebranded as BA Connect, and started a buy-on-board food scheme, however just one year later it was sold to Flybe, with BA taking a 15% stake in Flybe. Incoming BA Chief Executive Willie Walsh – who had previously turned Aer Lingus into a no-frills carrier – said he would retain catering on the UK and European flights, however these were axed in 2009.

The axing of Bermuda II and the liberalisation of transatlantic traffic rights between UK and US cities was highly controversial: the US still did not permit foreign carriers in, but US carriers were free to pick up trade at will, however BA took advantage of this, and in 2008 BA's new subsidiary called OpenSkies took advantage, flying a Boeing 757 from New York to Paris and Amsterdam.

Also in 2008 the new Terminal at Heathrow, Terminal 5, opened. This was built exclusively for the use of British Airways at a cost of £4.3 billion. The launch was a disaster, with the baggage handling system failing completely, however only a few weeks later the teething problems were fixed and the terminal was up and running effectively.

In another major move, in 2008, British Airways, Iberia, and American Airlines announced a complex merger plan that would result in the airlines being able to fix fares, routes, and schedules together. The US government held up the merger for nearly two years, but in April 2010 it was completed, creating the International Airlines Group, although the airlines will continue to operate under their current brands. British Airways shareholders are left with a 55% stake in the new company, which is headquartered in London, with the remainder being owned by Iberia.