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=British Airways plc (BA) is the flag carrier airline of the United Kingdom which is

based and headquartered in Waterside, near its main hub at London Heathrow Airport.
British Airways operates a second hub at Gatwick Airport and a third hub, served through
its fully owned subsidiary, BA CityFlyer, at London City Airport. British Airways is the
largest airline in the UK based on fleet size, international flights and international
destinations. BA's UK passengers originating at non-London airports must connect via
London after British Airways discontinued all direct overseas flights from UK airports
outside London following the sale of BA Connect to British regional carrier Flybe in
2007.

The British Airways Board was established in 1971 to control the two nationalised airline
corporations, BOAC and BEA, and two much smaller regional airlines, Cambrian
Airways from Cardiff and Northeast Airlines from Newcastle upon Tyne. On 31 March
1974 all four companies were dissolved to form British Airways (BA). After almost 13
years as a nationalised company, British Airways was privatised in February 1987 as part
of the privatisation plan by the Conservative Government of the time. The carrier soon
expanded with the acquisition of British Caledonian (BCAL) in 1987 and Gatwick-based
carrier Dan-Air in 1992.

Despite being a longtime Boeing customer, British Airways placed a major order for
Airbus aircraft in August 1998 with the purchase of 59 Airbus A320 family aircraft. In
2007, the carrier placed its next major order, marking the start of its long-haul fleet
replacement, ordering 12 Airbus A380s and 24 Boeing 787s. The centrepiece of the
airline's long-haul fleet is the Boeing 747-400; with 57 examples in service, British
Airways is the largest operator of the type in the world.

British Airways is a founding member of the one world airline alliance, along with
American Airlines, Cathay Pacific, Qantas and the now defunct Canadian Airlines. The
alliance has since grown to become the third largest airline alliance after SkyTeam and
Star Alliance. Before its merger with Iberia, creating the International Airlines Group,
BA was listed on the London Stock Exchange and was a constituent of the FTSE 100
Index.

On 12 November 2009, British Airways confirmed that it had reached a preliminary


agreement to merge with Iberia. The merger between the two carriers will create the
world's third-largest airline in terms of annual revenue and the second largest airline
group in Europe. The merger was confirmed on 8 April 2010, and it is expected to be
completed by the end of the year. On 14 July 2010, the European Commission gave the
two carriers permission to merge and also agreed to allow American Airlines to co-
operate with the merged entity on transatlantic routes to the United States of America.
The British Airways merger with Iberia was finally completed on January 21, 2011,
formally creating the International Airlines Group, IAG.
Second handout

In 1967 the government established a committee of inquiry into Civil Aviation under Sir
Ronald Edwards. The Edwards Committee reported in 1969 with one of the
recommendations being the formation of a National Air Holding Board to control
finances and polices of the two government-controlled airlines, the British Overseas
Airways Corporation (BOAC) and British European Airways Corporation (BEA).[2] The
recommendation was enacted in 1971 with the passing of the Civil Aviation Act 1971
which formed a British Airways Board to control all the activities of the two airlines.[3]

British Airways (BA) was created in 1974, when BOAC and BEA managements were
combined under the newly formed British Airways Board.[4] Following two years of
fierce competition with British Caledonian, the second-largest airline in Britain at the
time, the Government changed its aviation policy in 1976 so the carriers were no longer
permitted to compete on long-haul routes.[5]

British Airways was one of only two airlines, the other being Air France, to operate the
supersonic airliner Aerospatiale-BAC Concorde, inaugurating the world's first supersonic
passenger service in January 1976 from London Heathrow to Bahrain.[6] Services to the
eastern seaboard of the US, which Concorde had been designed for, were inaugurated
with a service to Washington Dulles airport on 24 May 1976 and with flights to New
York JFK airport starting on 22 September 1977. This was followed by a service to
Singapore in cooperation with Singapore Airlines as a continuation of the flight to
Bahrain.[4] Concorde operations soon expanded with charter services inaugurated in 1982
and a service to Miami (served as a continuation of the Washington flight) beginning in
March 1984.[7] Following the Air France Concorde crash in Paris and the slump in
demand for air travel after the 11 September Attacks in New York, the announcement
was made on 23 April 2003, that both Air France and British Airways would cease
Concorde operations by the end of October 2003, after 27 years of service. The final
commercial Concorde flight flew as BA002 from New York JFK to London Heathrow on
24 October 2003.[8]

In 1981, the airline was instructed to prepare for privatisation by the Conservative
government leading to the appointment of Sir John King, later Lord King, as Chairman
with the goal of bringing the airline back into profitability. King was credited with
transforming the loss-making giant into one of the most profitable air carriers in the
world, while many other large airlines struggled.[9] The flag carrier was privatised and
was floated on the London Stock Exchange in February 1987 by the Conservative
government.[10] In July 1987, British Airways effected the controversial takeover of
Britain's "second" airline, British Caledonian.[7]

In 1992, British Airways expanded through the acquisition of financially troubled


Gatwick-based carrier Dan-Air, giving BA a much larger presence at Gatwick airport. In
March 1993, the rapid expansion continued with the formation of British Asia Airways, a
subsidiary based in the Taiwan, to operate between London and Taipei. Throughout
1993, British Airways expanded through the purchase of a 25% stake in Australian airline
Qantas in March, and the acquisition Brymon Airways in May to form BA Connect.[11]

The formation of Richard Branson's Virgin Atlantic Airways in 1984 began a tense
relationship with BA. In 1993, the intense rivalry between British Airways and Virgin
Atlantic culminated with British Airways being sued £610,000 for a "dirty tricks"
campaign against Virgin and around £3 million in Virgin's legal costs. British Airways'
campaign against Virgin included poaching Virgin Atlantic customers and tampering
with private files belonging to Virgin. Following a court case, British Airways was forced
to pay Virgin damages and legal costs causing BA management to apologise
"unreservedly" for the alleged "dirty tricks" campaign.[12]

British Airways Hawker Siddeley Trident in 1974–1984 livery with enlarged "British"
titles

Six months after the "dirty tricks" campaign, Lord King stepped down as chairman in
1993 and was replaced by former deputy, Colin Marshall, while Robert Ayling took over
as CEO.[11] Benefits under his management included cost savings of £750m and the
establishment of Go in 1998.[13] However, one year on, in 1999, British Airways reported
an 84 percent drop in profits, its worst for seven years.[14] In March 2000, Robert Ayling
was removed from his position and British Airways announced Rod Eddington as his
successor. Eddington set about cutting the workforce further, in response to the slump
caused by 11 September attacks in 2001.[8] On 8 September 2004, British Airways
announced that it was to sell its 18.5 percent stake in Qantas.[15]

A British Airways BAC 1-11 showing the Landor Livery.

In September 1998, British Airways, along with American Airlines, Cathay Pacific
Airways, Qantas and the now defunct Canadian Airlines, agreed to form the oneworld
airline alliance in order to better compete with the growing Star Alliance members.
oneworld began operations on 1 February 1999 and has since grown to include 11
carriers with 2 pending and has become one of the largest airline alliances in the world,
behind only SkyTeam and Star Alliance[7]
In September 2005, new CEO Willie Walsh, former Aer Lingus pilot and then boss, took
charge of the company.[16]

In January 2008, BA unveiled its new subsidiary OpenSkies which takes advantage of the
liberalisation of transatlantic traffic rights between Europe and the United States.
OpenSkies flies non-stop from Paris to New York and Washington D.C.[17]

In July 2010, British Airways received permission from the European regulators of
aviation, the European Commission, to merge with Spanish carrier, Iberia, and to co-
ordinate with American Airlines on fares and scheduling for transatlantic routes. On 20
July 2010, the US Department of Transport approved the deal with American Airlines,
finalising their tentative decision made on 13 February 2010.[18] The deal is expected to
save British Airways £560 million every year once all the cost-overlaps between the
companies have been eliminated.[19] British Airways ceased trading on the London Stock
Exchange on January 21, 2011, after nearly 24 years as a constituent of the FTSE 100
index. The move came in preparation for the merger with Iberia, while the merged entity,
International Airlines Group, became the name under which British Airways now trades.
[20]

On 4 October 2010, British Airways unveiled one of its last Boeing 757s (G-CPET) in a
'retro' livery, to celebrate the retirement of the 757 fleet after 27 years. The aircraft,
named 'Stokesay Castle' is wearing an identical livery to that worn by the 757s during
their introduction to service, as joint launch customer, in February 1983. The 757s were
retired from commercial service on 30 October 2010. However, the Retro-Jet (G-CPET)
flew her last passenger flight on Saturday, 6 November as a charity "round routed" trip
from LHR to LHR. This flight was open to staff and their families, with all proceeds
going to British Airways joint venture with Comic Relief, Flying Start.[21]

[edit] Merger with Iberia

British Airways and Iberia announced their merger in April 2010, creating the
International Airlines Group, one of the world's largest airlines.

On 30 July 2008, British Airways and Spanish carrier Iberia, a fellow oneworld partner,
announced a merger plan that would result in the two airlines joining forces in an all-
stock transaction while retaining their separate brands, similar to KLM and Air France in
their merger agreement.[22] On 12 November 2009, British Airways confirmed that it had
reached a preliminary agreement to merge with Iberia.[23] The merger between British
Airways and Iberia will create the world's third-largest airline in terms of annual revenue
and the second largest airline group in Europe. The agreement was confirmed on 8 April
2010, and was expected to be completed by the end of 2010.[24] On October 6, 2010, the
alliance between British Airways, American Airlines and Iberia formally began
operations for the first time.[25]

British Airways owns a 13.5% stake in Iberia but will receive ownership of 55% of the
new combined group, which will be known as “International Airlines Group”, with
Iberia's shareholders receiving the remaining 45% of the company.[26] The merged entity
will operate 419 aircraft, carry over 62 million passengers annually and serve more than
200 destinations. It is expected that the merger will create 400 million euros of savings
every year for the carriers.[24] The operational headquarters will be in London but the
corporate headquarters will be in Madrid. Board meetings will take place in Madrid since
the company is being incorporated according to Spanish law as an "anonymous society"
(Sociedad Anónima), and the holding company for both carriers will pay taxes in Spain.
[27]

On 14 July 2010, the European Commission, granted both airlines permission to merge as
well as permission to include American Airlines in co-operation on ticket prices and
schedules on transatlantic routes for all three airlines.[28] On 20 July 2010, the US
Department of Transport approved the deal with American Airlines, finalising their
tentative decision made on 13 February 2010.[18] The deal is expected to become
operational by the end of 2010. The alliance with American Airlines is expected to
deliver a £230 million cost-saving for British Airways on top of the £330 million
expected to be saved by the merger with Iberia each year.[19]

In September 2010, Willie Walsh, the CEO of IAG, announced in Mumbai that the newly
merged group would look to acquire other airlines, particularly those in emerging
markets. He also stated that a shortlist of 12 possible carriers that would potentially be
included in the new group has been created. These airlines are widely expected to include
LAN Chile, American Airlines, Cathay Pacific Airways, Qantas, Aer Lingus, Finnair,
Kingfisher Airlines and Japan Airlines among others.[29]

Both carriers completed their merger on January 21, 2011.[30] Shareholders from British
Airways and Iberia approved the merger on November 29, 2010, allowing the creation of
the world's third largest airline by revenue.[31]

[edit] Corporate affairs


British Airways trades on the London Stock Exchange and is a constituent of the FTSE
100 Index under the title of "International Airlines Group" following British Airways'
merger with Iberia on 21 January 2011, with trading beginning on 24 January 2011.[32]

[edit] Head office


Waterside, the head office of British Airways.

A British Airways Boeing 747-400 in a special Oneworld livery at London Heathrow


Airport, England.

British Airways has its head office, Waterside, in Harmondsworth, London Borough of
Hillingdon, England.[33] Waterside was completed in June 1998 to replace British
Airways' previous head office, Speedbird House, on the grounds of London Heathrow
Airport.[34] This former headquarters was sometimes nicknamed the "Birdseed House".[35]

[edit] Financial performance

British Airways Financial Performance


Profit/Loss Net
Year Passengers Turnover Basic
Before Tax (£m) Profit/Loss
Ended Flown[36] (£m) EPS (p)
(£m)
31 March
31,825,000 7,994 (531) (425) (38.5)
2010
31 March
33,117,000 8,992 (401) (358) (32.6)
2009[37]
31 March
34,613,000 8,753 883 696 59.0
2008
31 March
33,068,000 8,492 611 438 25.5
2007
31 March
32,432,000 8,213 616 464 40.4
2006*
31 March
35,634,000 8,515 620 467 40.4
2006
31 March
35,717,000 7,772 513 392 35.2
2005
31 March
36,103,000 7,560 230 130 12.1
2004
31 March
38,019,000 7,688 135 72 6.7
2003
31 March
40,004,000 8,340 (200) (142) (13.2)
2002
31 March
36,221,000 9,278 150 114 10.5
2001
31 March
36,346,000 8,940 5 (21) (2.0)
2000
31 March
37,090,000 8,915 225 206 19.5
1999
31 March
34,377,000 8,642 580 460 44.7
1998
31 March
33,440,000 8,359 640 553 55.7
1997
31 March
32,272,000 7,760 585 473 49.4
1996

* Restated for the disposal of the regional business of BA Connect.

[edit] Operations
British Airways and British Airways franchise destinations.
United Kingdom
British Airways destinations
Destinations served only by British Airways franchise

British Airways holds a United Kingdom Civil Aviation Authority Type A Operating
Licence, and is permitted to carry passengers, cargo and mail on aircraft with 20 or more
seats.[38]

British Airways is the largest airline based in the United Kingdon in terms of fleet size,
international flights and international destinations and was, until 2008, the largest airline
based in the UK in terms of passenger numbers as well. The airline carried 34.6 million
passengers in 2008 but rival UK low-cost carrier easyJet carried 44.5 million passengers
in the same year, taking the title from British Airways for the first time.[39][40]

British Airways' main base is at London Heathrow Airport in west London, England but
it also has a major presence at Gatwick Airport and at one time operated a significant hub
at Manchester Airport. However, hub operations at Manchester, and international
services from outside London, ceased after the airline sold their subsidiary, BA Connect,
citing lack of profitability. Passengers wishing to travel internationally with BA either to
or from regional UK destinations must now transfer in London.[41] Heathrow airport in
particular is dominated by British Airways, due to their ownership of 40% of the slots
available at the airport.[42]

On 27 March 2008, British Airways moved almost half of their Heathrow operating staff,
equipment, and aircraft to the new Terminal 5. The vast majority of British Airways
services to and from Heathrow operate from Terminal 5, with the exception of some
service flights which will operate out of Terminal 3.[43] T3 British Airways operations
include long-haul codeshare flights and European flights.[43][44]

In August 2007, British Airways agreed to plead guilty and pay a $300 million fine as a
result of felony antitrust charges in the United States for conspiring to fix air cargo prices.
[45]

In November 2010, British Airways was fined €104 million by the European
Commission following an investigation into price-fixing.[46]
[edit] Subsidiaries, franchisees and shareholdings

Subsidiaries

• BA CityFlyer
• OpenSkies
• British Airways World Cargo
• BAMC and British Airways Engineering

BA CityFlyer is a subsidiary with Embraer aircraft based at London City Airport. In


December 2008 CityFlyer signed a contract with Embraer to modernise the fleet with an
order for 11 E-Jet aircraft which are replacing the existing Avro RJ aircraft. BA CityFlyer
operates around 250 flights per week from London City Airport.[47]

British Airways previously was the full owner of Airways Aero Associations Limited,
which operates the British Airways flying club and runs its own aerodrome under the
British Airways brand at Wycombe Air Park, High Wycombe.[48]

With the creation of an Open Skies agreement between Europe and the United States in
March 2008, British Airways started a new subsidiary airline called OpenSkies
(previously known as "Project Lauren").[49] The airline started operations in June 2008,
and now flies direct from Paris to New York JFK and Washington Dulles.[50]

The former BEA Helicopters was renamed British Airways Helicopters in 1974 and
operated passenger and offshore oil support services until it was sold in 1986.[51]

Franchisees

• Comair, based in South Africa, franchisee since 1996.[52]


• Sun Air of Scandinavia, based in Denmark, franchisee since 1 August 1996.[53]

Shareholdings

• British Airways owns a 13.5% stake in Spanish airline Iberia.[26]


• British Airways obtained a 15% stake in UK regional airline Flybe, through the
sale of BA Connect in March 2007.[54]
• BA also owns a 10% stake in InterCapital and Regional Rail (ICRR), the
company that manages operations of Eurostar (U.K.) Ltd..[55]

[edit] British Airways World Cargo

BA is, through its subsidiary British Airways World Cargo, the world's twelfth-largest
cargo airline based on total freight tonne-kilometres flown.[56] BA World Cargo has
global freight opportunities through the British Airways flight routes. In addition to the
main fleet, BA World Cargo wet lease three Boeing 747-400F aircraft from Global
Supply Systems on a multi-year basis, as well as utilising space on dedicated freighters
operated by other carriers.[57] Dedicated freighter services gives British Airways World
Cargo the opportunity to service destinations that are not available on their passenger
route network. In 2010 it was announced that BAWC would wet lease three Boeing 747-
8F aircraft from Global Supply Systems to replace the 747-400's. The replacement
aircraft will be painted in full British Airways Livery.

British Airways opened a World Cargo centre at Heathrow in the late 1990s.[58] As an
advanced automated freight handling centre, it can handle unusual and premium cargo,
and fresh produce, of which it handles over 80,000 tons per year.[59] BA World Cargo also
handles freight at London's Gatwick and Stansted airports, and, through its partner British
Airways Regional Cargo, at all of the main regional airports throughout the UK.[60]

[edit] Industrial relations

Staff working for British Airways are represented by a number of trade unions, which
include:

• BALPA, who represent pilots


• BASSA, who represent some of the cabin crew
• Unite the Union for other employees

British Airways, under Bob Ayling's management, faced strike action by cabin crew over
the £1 billion cost-cutting drive that was made to return the carrier to profitability in
1997. This was the last time cabin crew at BA went on strike until 2009. Following these
strikes, and the cost-cutting programme implemented by Ayling, staff morale never
recovered leading to unrest within the company ever since.[61] The airline did have some
success in the form of a workshop which was attended by more than 1800 managers and
220 union representatives. The aim of the workshop was to foster a stronger partnership
between the two groups.[62]

In 2005, wildcat action was taken by union members over the decision by Gate Gourmet
to lock out 670 workers and replace them with agency staff after a contract with British
Airways was not renewed. It is estimated that the strike cost British Airways £30 million
and caused disruption to 100,000 passengers.[63]

In October 2006, a dispute over the right of a Christian check-in worker to wear a visible
symbol of faith occurred.[64] The employee lost an employment tribunal in January 2008.
[65]

In 2007, cabin crew threatened strike action over salary changes to be imposed by the
British Airways Board. The strike was then confirmed but called off just before the start
of the action, leading to British Airways losing £80 million.[61]

Relations have been turbulent between BA and Unite, particularly in 2009 and 2010 with
regard to proposed changes to working conditions for cabin crew in response to the
global financial crisis. A strike ballot was held in December 2009 over changes to
working practices which received overwhelming support for planned action over
Christmas 2009.[66] This industrial action was blocked by a court injunction deeming the
ballot illegal. A re-ballot was held in February.[67] Ongoing negotiations failed to stop
strike action in March, and the company withdrew travel perks for those participating in
the action.[68] Allegations made in the Guardian newspaper that BA had sought
consultancy on how to undermine the unions operating in BA were withdrawn.[69]

A further strike was announced for May 2010 and British Airways again sought an
injunction on a technicality which was initially granted, but overturned on appeal during
the first aborted planned action. The attempts to avert strike action were delayed after
members of the Socialist Workers Party broke up the negotiations between BA leadership
and Unite the Union.[70] Negotiations were further strained when Unite co-leader Derek
Simpson was found to be using his Blackberry to update his Twitter account with
progress of the confidential negotiations under the chairmanship of conciliation service
Acas.[71]

[edit] Destinations
Main articles: British Airways destinations and British Airways franchise destinations

British Airways aircraft at London Heathrow Terminal 5

British Airways serves nearly 150 destinations, including six domestic. It is one of only
nine carriers to fly to all six permanently inhabited continents (the eight other carriers are
Delta, Emirates, Korean Air, Malaysia Airlines, Qantas, Qatar Airways, South African
Airways and United Airlines).[72]

[edit] Partnerships
[edit] Commercial

Codeshare agreements

Other than codesharing with fellow oneworld alliance members, and franchisees, British
Airways has codeshare agreements with:[73]

• Aer Lingus
• Flybe
• Kingfisher Airlines
• Loganair
• Meridiana fly
• WestJet

[edit] Technology

In April 2000 British Airways selected Amadeus' Altéa platform to replace their inhouse
Passenger Service System known as BABS[74]. Migration to the new reservations and
inventory system was completed in 2002.

[edit] Fleet
With the exception of the Boeing 707 and early Boeing 747 variants from BOAC, the
airline as formed in 1972-4 inherited a mainly UK-built fleet of aircraft. The airline
introduced the Boeing 737 and Boeing 757 into the fleet in the 1980s, followed by the
Boeing 747-400, Boeing 767 and Boeing 777 in the 1990s.[7][11]

Boeing-built aircraft for British Airways are allocated the customer code 36, which
appears in their aircraft designation as a suffix, such as 737-436, 747-436 and 777-236.[75]

Although British Airways utilises a large Boeing fleet, it has always operated aircraft
from other manufacturers.[76] British built aircraft were transferred from BEA (e.g.
Trident) and BOAC (e.g. VC10), and in the 1980s the airline purchased the Lockheed L-
1011.[77] It also operated the DC-10 and Airbus A320-100 through the acquisition of
British Caledonian Airways in the 1980s. In August 1998, British Airways placed its first
direct Airbus order, for 59 A320/A319s, to replace its own aging fleet of Boeing 737s
and A320-100s.[11] British Airways replaced the L-1011 and DC-10 tri-jet fleet with more
fuel-efficient, twinjet, Boeing 767 and 777 aircraft in the 1990s. In September 2007, BA
placed its first order for long-haul Airbus jets, consisting of 12 firm orders for Airbus
A380s and seven options.[78] BA's Boeing 757s have now been withdrawn from service[79]
and are awaiting disposal.

The British Airways fleet includes the following aircraft in October 2010:[80]

Airbus A319 takes off from London Heathrow Airport


Airbus A321-200 takes off from Manchester Airport

Boeing 777-200ER takes off from London Heathrow Airport

Boeing 747-400 takes off from London Heathrow Airport


British Airways Fleet
Passengers
Aircraft Total Orders Base
F J W M Total
Airbus A318 2 — — 32 — — 32 LCY
13
— — — 2 132 LHR
Airbus A319 33 —
— 15 — 12 144 LGW
9
15
— — — 6 156
Airbus A320-200 41 3 LHR
— 15 — 13 152
7
18
— — — 8 188
Airbus A321-200 11 — LHR
— 15 — 16 184
9
Airbus A380-800 — 12 TBA LHR
13
Boeing 737-400 19 — — 13 — 145 LGW
2
22
14 52 36 7 329
Boeing 747-400 57 — LHR
14 70 30 17 291
7
14
— 24 24 4 192
Boeing 767-300ER 21 — LHR
— 26 — 22 247
1
12
Boeing 777-200 3 — 17 48 24 216 LHR
7
21
— 48 24 4 286 LGW
Boeing 777-200ER 43 —
14 48 40 12 229 LHR
7
18
Boeing 777-300ER 3 3 14 56 44 297 LHR
3
Boeing 787-8 — 8 — 42 51 90 183 LHR
Boeing 787-9 — 16 TBA LHR
Total 233 42

In February 2011, the average age of the BA fleet was 11.9 years.[81]

Vickers VC10 G-ARTA, shown in the BOAC livery from the early 1960s.
Concorde G-BOAD, which set the passenger airliner world speed record on 7 February
1996 when it flew from New York to London Heathrow in 2 hours, 52 minutes and 59
seconds, on display at the Intrepid Sea-Air-Space Museum in New York City in
December 2005.

Boeing 737-500 G-GFFD at Manchester Airport in January 2007.

[edit] Aircraft operated

British Airways Fleet, 1970s[82] British Airways Fleet, 1980s–2000s[82]


[hide]Aircraft Introduced Retired [hide]Aircraft Introduced Retired
BAC One-Eleven 1974 1993 Airbus A318 2009
Boeing 707-400 1974 1984 Airbus A319 1999
Boeing 737-200 1974 2001 Airbus A320-100 1988 2007
Boeing 747-100 1974 1999 Airbus A320-200 1989
Boeing 747-200 1977 2001 Airbus A321 2004
Concorde 1976 2003 Boeing 737-300 1988 2009
Hawker Siddeley Boeing 737-400 1990
1974 1989
Trident
Boeing 737-500 1996 2009
Hawker Siddeley
1975 1985 Boeing 747-400 1989
HS 748
Boeing 757-200 1983 2010
Lockheed L-1011
1974 1999
TriStar Boeing 767-200 1993 1996
Vickers VC10 1974 1983 Boeing 767-
1991
300ER
Vickers
1974 1975
Vanguard Boeing 777-200 1995
Vickers Viscount 1974 1982 Boeing 777-
2010
300ER
Dash 8-100 1993 1998
Saab 340 1990 1991
BAe 146-200 1989 1994
BAe ATP 1989 1994
McDonnell
1988 1999
Douglas DC-10

[edit] Engine choice

The majority (77%) of the British Airways fleet is either powered by Rolls-Royce or IAE
alliance engines, of which Rolls-Royce is a major contributor. The remaining 23% of the
fleet is equally divided between General Electric and the CFM International consortium:
[80]

Rolls-Royce

• The RB211-524 power all the Boeing 747-400s and Boeing 767s.
• The Trent 800 powers 19 of the Boeing 777s.

International Aero Engines (IAE)

• All the Airbus A319s and Airbus A321s are powered by variants of the V2500 as
well as 37 of the Airbus A320s.

General Electric

• The General Electric GE90 powers 27 of the Boeing 777-200/-200ERs and all of
the Boeing 777-300ERs.

CFM International

• Different variants of the CFM International CFM56 power both Airbus A318
aircraft, all the Boeing 737s, and four of the Airbus A320s.

[edit] Recent aircraft orders


British Airways has 32 outstanding options with Airbus, which may be taken as any
member of the A320 family. Secured delivery positions on 10 Boeing 777 aircraft are
held.[83]

On 27 March 2007, British Airways placed a firm order for four 777-200ER aircraft with
an option for four more, with the order totalling more than US$800 million at list price.[84]
The company has stated that these are for fleet expansion. BA's first 777s were fitted with
General Electric GE90 engines, but BA switched to Rolls-Royce Trent 800s for the most
recent 19 aircraft.[85] This engine choice has been continued with the most recent four
orders as Trent 800 engines were selected as the powerplant for the new aircraft.[86]

British Airways has placed firm orders for 24 Boeing 787s, which will replace the oldest
Boeing 767s in the fleet from 2012.

On 27 September 2007, BA announced their biggest order since 1998 by ordering 36 new
long-haul aircraft. The company ordered 12 A380s with options on a further seven, and
24 Boeing 787s with 18 options for delivery between 2012 and 2016.[87] Rolls-Royce
Trent engines were selected for both orders with Trent 900s powering the A380s and
Trent 1000s powering the 787s. The Boeing 787s will replace 14 of British Airways'
Boeing 767 fleet while the Airbus A380s will replace 20 of BA's oldest Boeing 747-400s
and will most likely be used to increase capacity on key routes from London Heathrow,
such as Hong Kong and Los Angeles.[88]

The Airbus A380 is due to enter service with British Airways in 2013.

On 1 February 2008, it was announced that British Airways had ordered two Airbus
A318s to operate a premium service between London City Airport and New York JFK.[89]
The two A318s used for the service are fitted out with 32 lie-flat beds in an all business
class cabin.[90] The service, operating under the flight numbers previously reserved for
Concorde, BA001 and BA003, began in September 2009.[91] Runway length limitations at
London City Airport prevent a fully fuelled A318 from departing, necessitating a
westbound fuel-stop at Shannon Airport in Ireland, where passengers also use Shannon’s
US Customs & Border pre clearance facilities allowing passengers to arrive at JFK as a
domestic passenger.[92]

On 1 August 2008, BA announced orders for six Boeing 777-300ERs and options for
four more as an interim measure to cover for delays over the deliveries of their 787-8/9s.
Of the 6 that have been ordered, 4 will be leased & 2 will be fully acquired by British
Airways.[93] On 12 January 2009 CEO Willie Walsh stated that BA's purchase of six
Boeing 777-300ERs did not indicate that they had ruled out purchasing the Airbus A350
for their fleet renewal programme and "that the airline expects to reach a decision
towards the end of the year."[94]

[edit] Marketing
Further information: British Airways face advertisement

The musical theme predominantly used on British Airways advertising is "The Flower
Duet" by Léo Delibes.[95] This, and the slogan "The World's Favourite Airline" were
introduced in 1989 with the launch of the iconic "Face" advertisement.[96] The slogan was
dropped in 2001, after having been overtaken by Lufthansa in terms of passenger
numbers.[97] However, "Flower Duet" is still used by the airline, and has been through
several different arrangements since 1989. The recent version of this melody was shown
in 2007, with a new slogan, "Upgrade to British Airways".[98]

British Airways' speedbird logo marks the entrance to London Heathrow Terminal 5.

The advertising agency used for 23 years by BA was Saatchi & Saatchi, who created
many of the most famous advertisements for the airline including the influential "Face"
commercial. However, following the termination of its relationship with BA, Saatchi &
Saatchi made an imitation of this commercial for rival airline Silverjet in 2007.[99] As of
February 2007, BA's advertising agency is Bartle Bogle Hegarty.[100]

Prior to "The World's Favourite Airline", advertising slogans included:

• "The World's Best Airline".


• "We'll Take More Care Of You".
• "Fly the Flag".
Online, the value of the British Airways Brand was pushed in 2002 as the company was
given an opportunity to buy its acronym, and its IATA Airline code the letters "BA" as
their internet domain ba.com. The domain was previously owned by Bell Atlantic.[101]

British Airways is the official airline of the Wimbledon Championship tennis tournament,
and the official airline and tier 1 partner of the 2012 Olympics and Paralympics.[102][103]
British Airways is also the official airline of England's bid to host the 2018 Football
World Cup.[104]

British Airways Boeing 747-436, G-BNLM, with one of the airline's well-known and
distincitve tail designs.

[edit] Tail fins

Further information: British Airways ethnic liveries

Since its formation in 1974, though to a limited extent until all aircraft were repainted,
British Airways' aeroplanes carried a Union Flag scheme painted on their tail fins. The
original predominantly red tail scheme was changed with the launch of a new livery
designed by the New York design agency, Landor Associates.[105] The new tail was
predominantly dark blue and carried the British Airways Coat of Arms. On 10 June 1997
there was a highly controversial change from the use of the British colours to ethnic logos
and abstract world images,[106] such as Delftware or Chinese calligraphy for example. All
the designs related to countries on the company's network of routes. This caused
problems with air traffic control: whereas previously controllers had been able to tell
pilots to follow a BA plane, they were now harder to visually identify because each plane
was painted in a range of different colours and colour schemes.[107]

Several people spoke out against the change from the traditional Union Flag Scheme,
including the former Prime Minister Margaret Thatcher who covered the tail of a model
BA plane with a white hankerchief captured by BBC News cameras.[108] BA's traditional
rival, Virgin Atlantic, quickly adopted the British flag along with the slogan "Britain's
national flagcarrier".[109] On 6 June 1999, BA CEO Bob Ayling announced that all BA
planes would be repainted with the Union Flag, based on a design first used on Concorde.
[110]

[edit] Cabins
[edit] Short haul

UK Domestic is British Airways' economy class offering on domestic UK flights. The


seat pitch is 31" on all aircraft and the aircraft are in a one-class configuration.[111] Food
on these services depends on the destination and time of day. On Domestic services
within England before 10am, a hot breakfast baguette is served, while a hot breakfast tray
is served on Scottish services. After 10am there is a drinks service with a light snack on
all services.[112]

Short haul Euro Traveller cabin.

Business UK operates in exactly the same cabin as UK Domestic but with a fully flexible
ticket and pre-flight lounge access.

Euro Traveller is British Airways' economy class offering on flights from the UK to the
rest of Europe. Seat pitch is 31", except on Airbus A321 aircraft where it is 30".[111] Food
on board depends on the destination "band" (e.g. Band 1 to Paris, Band 2 to Frankfurt,
Band 3 to Rome, Band 4 to Athens). Band 1 and 2 receive a bar service with a choice of
sweet or salty snacks, Band 3 receive a filled sub roll and Band 4 flights are served with
hot meals. On all flights before 10AM, a cold breakfast roll and a drinks service is
offered. In-Flight Entertainment (IFE) is offered on Band 4 flights on all 767-300ER
aircraft and on some A320 flights where an IFE system is fitted.[113]

Club Europe is the short-haul business class product offered by British Airways on all
short-haul flights (except within the UK). Passengers have access to business lounges at
most airports and are also served a full English breakfast in the mornings or 'extended
breakfast' on later flights (ham, salami etc.) and afternoon tea later in the day.[114][115] Club
Europe seat pitch is 31", the same as in Euro Traveller on most aircraft. Club Europe
used to offer the same number of seats across as Euro Traveller, but with the middle seats
kept free. Since 2 September 2009, Club Europe has seats in a 2-3 configuration on
narrow-body aircraft; this change is being implemented progressively across the fleet.
The remaining middle seat in the new configuration is also being kept free.[116] Club
Europe was originally launched on 5 January 1988, along with Club World, British
Airways' long-haul business class cabin.[7]

[edit] Long haul


First (rebranded from 'FIRST' in 2009) is the long-haul first class service on British
Airways and is offered only on Boeing 747 and Boeing 777 aircraft. There are 14 private
"demi-cabins" per aircraft, each with a 6 ft 6 in (1.98 m) bed, a 15 inch wide in-flight
entertainment screen, in-seat power for laptops and personal phones. Menus are upgraded
from Club World, British Airways' long-haul business class product, and offer greater
choice and quality. Some airports boast dedicated First check-in desks but in airports
without a dedicated First check-in, passengers use Club World check-in.

A Next-Generation Club World seat.

In 2009, British Airways announced that the first major upgrade to the cabin since 1996
was to be inaugurated by January 2010, with a minor refresh taking place immediately.
[117]
As part of this upgrade program, British Airways has introduced a private concierge
service provided by Quintessentially exclusively for First passengers. The new cabin was
originally meant to have been launched on the London - New York Route, but due to the
US East Coast Snowstorm the new cabin was launched on 10 February 2010, on the
London-Chicago Route.[118]

The majority of the longhaul fleet based at Gatwick Airport do not feature First as they
fly predominantly to high capacity family holiday destinations - instead they carry a 3
class configuration of Club World, World Traveller Plus and World Traveller.

Club World is the long-haul business class product on British Airways 767, 777 and 747
aircraft, and the only class on its two Airbus A318 aircraft. Passengers have access to
departure lounges at most airports and an exclusive arrivals lounge at London Heathrow
Terminal 5.[119][120] On 13 November 2006, British Airways launched a new Club World
service, termed Next Generation New Club World, offering larger seats and a service
revamp. The Club World cabin provides a 20 in (51 cm) wide, 6 ft (1.8 m) long fully flat
bed (6 ft 6 in (1.98 m) long in Next Generation New Club World cabins when in Z-bed
position, which is not fully flat). There are 24 old generation Club World seats fitted on
Boeing 767-300ER aircraft but these aircraft will be replaced by the Boeing 787 which
will feature the Next-Generation Club World cabin from 2012 onwards. There are 48
Next-Generation Club World seats on all of British Airways' Boeing 777s and since 2007
there are either 52 or 70 Next-Generation seats on Boeing 747-400 aircraft. Club World
was originally launched on 5 January 1988, along with British Airways' short-haul
business class product, Club Europe.[7]
World Traveller cabin.

World Traveller Plus is the premium economy offering provided by British Airways on
all long-haul aircraft. World Traveller Plus features a 38 inch seat pitch, 7 inches more
than World Traveller (British Airways' long-haul economy class).[111] It also provides
fewer seats per row, two armrests per seat, an adjustable headrest, lumbar support,
additional recline and in-seat laptop power.[121] World Traveller Plus is situated in a
separate cabin from World Traveller and in a quieter location of the aircraft.[121] A new
World Traveller Plus Cabin was revealed on 28 August 2010 along with a new Thales
Entertainment System. This cabin is available on the 777-300ER and will be rolled out
across the entire longhaul fleet within the next 2 years. World Traveller Plus was
originally launched in 2000.[122]

World Traveller is the long-haul economy class offered on international flights by


British Airways to destinations outside Europe. World Traveller offers a 31" seat pitch,
lumbar support and fully adjustable headrests, seat-back entertainment systems, a free
bar-service and complimentary three-course meals. World Traveller product was
launched in 1991 and last updated in 1998.[111][123] A new World Traveller Cabin was
unveiled on 28 August 2010 along with a new Thales In-Flight Entertainment (IFE)
System. This cabin is available on the 777-300ER and will be rolled out across the entire
longhaul fleet within the next 2 years.[124]

[edit] Special cabin configuration

In 2001, British Airways became the first carrier to introduce a ten-abreast economy class
configuration on the Boeing 777, an aircraft which is designed for nine-abreast seating.
[125]
This utilised specially built narrow seats and aisles, and was applied to three GE-
engined 777-200ERs used predominantly on Caribbean routes, but sometimes flown to
and from Florida.[126] After British Airways piloted this development, the configuration
has been emulated by Emirates, Air France, KLM and China Southern Airlines among
others. British Airways has since removed this unpopular arrangement, returning to
standard nine-abreast seating.

[edit] Seating policies

Main article: Airline sex discrimination policy controversy


In March 2001, it was revealed that British Airways has a policy of not seating adult male
passengers next to children who are sitting by themselves, even if a child's parents are
elsewhere on the plane.[127] This led to accusations of sex discrimination, with the
company eventually admitting the offence in 2010 during a case brought by Mirko
Fischer.[128] The policy was dropped in August 2010 with the airline instead seating
unaccompanied minors in a nondiscriminatory manner near the cabin crew.[129]

[edit] Airport lounges

British Airways Concorde Room at Heathrow Terminal 5A.

British Airways operates several different types of lounge for passengers travelling in the
premium cabins and passengers with Silver or Gold status in the Executive Club, British
Airways' main loyalty programme.[130]

Club World and Club Europe passengers, British Airways' business classes, as well as
Silver Executive Club card holders are entitled to use the 70 dedicated British Airways
Terraces or Executive Club lounges.[120] Both these lounges are being replaced by
Galleries Club lounges.

First passengers, as well as Gold Executive Club card holders, are entitled to use the 60
dedicated British Airways First lounges. The Concorde Room at Heathrow Terminal 5
and New York JFK Terminal 7 are only accessible to First travellers.[131] First lounges are
being replaced by Galleries First lounges, an upgraded version of the First lounge.

At airports in which BA does not operate a departure lounge, a third party departure
lounge is usually provided for premium/status passengers. A third party arrivals lounge is
provided at Gatwick Airport within the Sofitel hotel.[132]

[edit] Loyalty programmes

British Airways Executive Club logo


British Airways operates two loyalty, or frequent-flyer, schemes; the Executive Club is
the primary programme and the other, highly exclusive, programme is known simply as
Premier.

Executive Club

The Executive Club is part of the network of frequent flyer programmes in the oneworld
alliance and is split into three tiers of membership: Blue, Silver and Gold. The benefits of
the Silver and Gold cards include access to airport lounges and dedicated reservation
lines.[133] Unlike most airlines' frequent flyer programmes, the Executive Club keeps
separate account of the redeemable BA Miles and the loyalty Tier Points. Flying in
higher Classes of Service, i.e. Premium Economy, Business or First, will earn extra BA
Miles and Tier Points. As of August 2009, Tier Points can be earned on any flight,
including discounted economy fares.[134]

BA Miles Calculator[135]
BA Miles per mile flown BA Miles per mile flown for
Class of Travel
for Blue Tier Members Silver/Gold Tier Members
Discounted or Flexible
1 2
Economy Class
World Traveller Plus 1.25 2.5
Club Europe/Club
1.5 3
World
First 2 4

Redeemable miles expire after 36 months of inactivity.[136]

Premier

BA operates an invitation-only Premier programme which gives more benefits than the
Executive Club Gold Card scheme including an increased number of BA miles per flight
and access to the Concorde Lounge regardless of travel class. It is given only by the BA
board and has 1,200 members.[137]

[edit] Incidents and accidents


• In November 1974, British Airways Flight 870 from Dubai to Heathrow, operated
by a Vickers VC10, was hijacked in Dubai, landing at Tripoli for refuelling before
flying on to Tunis. One hostage was murdered before the hijackers eventually
surrendered after 84 hours.[138] Captain Jim Futcher was awarded the Queen's
Gallantry Medal, the Guild of Air Pilots and Air Navigators Founders Medal, the
British Air Line Pilots Association Gold Medal and a Certificate of
Commendation from British Airways for his actions during the hijacking, having
returned to the aircraft to fly it knowing the hijackers were on board.[139]

• On 10 September 1976, a Trident 3B on British Airways Flight 476, flying from


London Heathrow to Istanbul collided in mid-air with an Inex Adria DC9-32 near
Zagreb, Croatia, resulting in the 1976 Zagreb mid-air collision.[140] All 54
passengers and 9 crew members on the BA aircraft died. This is the only fatal
accident to a British Airways aircraft since the company's formation in 1974.

• On 24 June 1982, Flight 9, a Boeing 747-200, G-BDXH, City of Edinburgh flew


through a cloud of volcanic ash and dust from the eruption of Mount Galunggung,
causing extensive damage to the aircraft, including the failure of all four engines.
[141]
The crew managed to glide the plane out of the dust cloud and restart all four
of its engines, although one later had to be shut down again. The aircraft made an
emergency landing at Halim Perdanakusuma International Airport just outside
Jakarta. No-one was injured.[142]

• On 10 June 1990, Flight 5390, a BAC One-Eleven flight between Birmingham


and Málaga, suffered a windscreen blowout due to the fitting of incorrect bolts the
previous day. The Captain suffered major injuries after being partially sucked out
of the aircraft, however the co-pilot landed the plane safely at Southampton
Airport.[143]

• On 2 August 1990, Flight 149 landed at Kuwait International Airport four hours
after the Iraqi invasion of Kuwait, leading to the capture of the passengers and
crew, and the destruction of the aircraft.[144][145]

• On 11 December 2000, British Airways Flight 2069 from London Gatwick


Airport to Nairobi experienced a hijack attempt whilst flying over Sudan.[146] A
Kenyan student with a mental illness burst into the cockpit of the Boeing 747. As
three crew fought to restrain the man, the auto-pilot became disengaged and the
jet dropped 10,000 feet (3,000 m) with 398 passengers on board. However, with
the help from the passengers, the pilots recovered the aircraft, successfully
restrained the Kenyan with handcuffs and the plane landed safely.[147] Passengers
aboard the plane included English singer Bryan Ferry and socialite Jemima Khan.
[148]

• On 19 February 2005, the No. 2 engine of a Boeing 747-400 G-BNLG surged


(whereby the airflow through the engine reverses) and suffered internal damage
just after take off from Los Angeles on a flight to London Heathrow with 16 crew
and 351 passengers on board.[149] The crew shut the engine down and continued
the climb and continued the flight, in line with BA's standard operating
procedures for 4 engined aircraft. Because it was unable to attain normal cruising
speeds and altitudes, the aircraft diverted to Manchester Airport, England. The
United States Federal Aviation Administration had been critical of the Captain's
decision and accused BA of operating the aircraft in an non airworthy condition.
[150]
In June 2006 the UK Air Accidents Investigation Branch recommended that
the UK and US authorities review the policy on flight continuation and give clear
guidance. This has not happened but the FAA have accepted the United Kingdom
Civil Aviation Authority’s determination that the aircraft was airworthy.[151]

The damaged British Airways Flight 38

• On 17 January 2008, British Airways Flight 38, a Boeing 777-200ER G-YMMM,


flying from Beijing to London, crash-landed approximately 1,000 feet (300 m)
short of London Heathrow Airport's runway 27L, and slid onto the runway's
threshold. This resulted in damage to the landing gear, the wing roots, and the
engines, resulting in the first hull loss of a Boeing 777. There were 136
passengers and 16 crew on board. 1 serious and 12 minor injuries were sustained.
The initial report from the Air Accidents Investigation Branch stated that the
engines repeatedly failed to respond to commands for more thrust from both the
autothrottle system and from manual intervention, beginning when the aircraft
was at an altitude of 600 feet (180 m) and 2 miles (3.2 km) from touchdown.[152]
In September 2008, it was revealed that ice in the fuel might have caused the
crash. In early 2009, Boeing sent an update to aircraft operators, identifying the
problem as specific to the Rolls-Royce engine oil-fuel flow heat exchangers.[153]

[edit] Arms
Arms of British Airways

Notes The arms of British Airways consist of:[154]

Argent between a Chief and a Bendlet sinister couped


Escutcheon gules, a Gyron issuing from the dexter the point in
sinister chief.

Motto To Fly To Serve

[edit] See also


Aviation portal

Companies portal

London portal
United Kingdom portal

• Air transport in the United Kingdom


• List of airports in the United Kingdom
• Transport in the United Kingdom

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[edit] Bibliography
• Gregory, Martyn (1996). Dirty tricks: British Airways' secret war against Virgin
Atlantic. Warner. ISBN 0751510637.
• Corke, Alison (1986). British Airways: the path to profitability. Pan.
ISBN 0330295705.
• Hayward, Keith (1983). Government and British civil aerospace: a case study in
post-war technology policy. Manchester University Press. ISBN 0719008778.
• Campbell-Smith, Duncan (1986). The British Airways Story: Struggle for Take-
Off. Hodder and Stoughton. ISBN 0340394951.
• Penrose, Harald (1980). Wings Across the World: An Illustrated History of British
Airways. Cassell. ISBN 0304306975.
• Marriott, Leo (1998). British Airways. Plymouth Toy & Book.
ISBN 188266339X.
• British Airways (1974). British Airways annual report and accounts. British
Airways Board.
Third handout
Company History:

British Airways PLC is the largest international airline in the world. It is based at
Heathrow Airport in London, the busiest international airport in the world, and has a
global flight network through such partners as USAir in the United States, Qantas in
Australia, and TAT European Airlines in France. Via its own operations and those of its
alliance partners, British Airways serves 95 million passengers a year using 441 airports
in 86 countries and more than 1,000 planes.

British Airways' earliest predecessor was Aircraft Transport & Travel, Ltd., founded in
1916. On August 25, 1919 this company inaugurated the world's first scheduled
international air service, with a converted de Havilland 4A day bomber leaving
Hounslow (later Heathrow) Airport for London and also Le Bourget in Paris. Eight days
later another company, Handley Page Transport, Ltd., started a cross-channel service
between London's Cricklewood Field and both Paris and Brussels.
That same year Britain's advisory committee for civil aviation proposed plans for
establishing a world airline network linking Britain with Canada, India, South Africa,
Australia, and New Zealand. Because airplanes capable of crossing wide stretches of
water were not yet available, the committee recommended that first priority be given to a
route to India operated by state-assisted private enterprise.

Progress was made quickly. Before the end of the year the British government was
operating a service to Karachi and had established a network of 43 Royal Air Force
(RAF) landing strips through Africa to the Cape of Good Hope. Meanwhile, strong
competition from subsidized foreign airline companies had forced many of the private
British air carriers out of business. By March 1921 all British airline companies had
suspended their operations. The government responded with a pledge to keep the British
companies flying, using its own form of subsidization.

In January 1923 Parliament appointed the Civil Air Transport Subsidies Committee to
form a single British international air carrier from existing companies. On March 31,
1924 the Daimler Airway, British Marine Air Navigation, Instone Air Line, and Handley
Page merged to become Imperial Air Transport.

In 1925 Imperial Airways operated a number of European routes while it surveyed a


route across the Arabian desert from Cairo to Basra in present-day Iraq. The airline was
faced with a number of problems on this route. The desert was featureless, making it easy
to get lost. Water stops and meteorological and radio stations were difficult to maintain.
Basra was a major terminal on the route to India. However, on January 7, 1927 the
Persian government forbade Britain the use of its airspace, blocking all flights to India.
Negotiations reopened the airspace two years later, but not before generating a demand
for longer range aircraft.

Passengers flying to India flew from London via Paris to Basel, where they boarded a
train for Genoa. A flying boat then took them on to Alexandria, where they flew in stages
to Karachi. The passage to India, previously three weeks by sea, had been reduced to one
week by air.

Imperial Airways service to Calcutta was established in July 1933, to Rangoon in


September, and to Singapore in December. In January of the following year the
Australia's Queensland and Northern Territories Air Service (Qantas) inaugurated a route
linking Singapore with Brisbane. The passage to Australia could be completed in twelve-
and-a-half days.

A commercial service through Africa was opened in 1931 with flying boats linking Cairo
with Mwanza on Lake Victoria. In April 1933 the route was extended to Cape Town, the
trip from London taking ten-and-a-half days. An east-west trans-African route from
Khartoum in the Sudan to Kano in northern Nigeria was established in February 1936.
This route completed a world network which linked nearly all the countries of the British
Empire.
The primary source of revenue on the network was not from transporting passengers but
mail. Nevertheless, an increase in demand for more passenger seating and cargo space
generated a need for larger airplanes. Britain's primary supplier of flying boats, the Short
Company, developed a new model, designated the C-class, with 24 seats and weighing 18
tons. Since it had an increased range and flew 145 miles per hour, it was able to simply
bypass "politically difficult areas." The Short C-class went into service in October 1936.
A year later Imperial Airways made its first trans-Atlantic crossing with a flying boat
equipped with extra fuel tanks. However, it was Pan Am, with more sophisticated and
updated Boeing airplanes, which was first to schedule a regular trans-Atlantic service.

Imperial Airways was formed with the intention of being Britain's "chosen instrument"
for overseas air service. On its European services, however, Imperial was competing with
the British Continental airlines and an aggressive newcomer called British Airways.
British Airways was created in October 1935 by the merger of three smaller airline
companies. Three months later the company acquired a fleet of Lockheed 10 Electras
which were the fastest airplanes yet available. The competition from British Airways
threatened the "chosen instrument" so much that in November 1937 a Parliamentary
committee proposed the nationalization and merger of Imperial and British Airways.
When the reorganization was completed on November 24, 1939, the British Overseas
Airways Corporation (BOAC) was formed.

The creation of BOAC was overshadowed by the declaration of war on Germany the
previous September. The Secretary of State for Air assumed control of all British air
services, including BOAC. Within a year Italy had entered the war and France had fallen.
Britain's air routes through Europe had been eliminated. British flying boats, however,
continued to ferry personnel and war cargo between London and West Africa with an
intermediate stop at Lisbon in neutral Portugal. The air link to Khartoum maintained
Britain's connection to the "Horseshoe Route," from Cape Town through East Africa,
Arabia, India, and Singapore to Australia. When Malaya and Singapore were later
invaded by the Japanese, BOAC and Qantas opened a nonstop service between Ceylon
and Perth in Western Australia. BOAC transported ball bearings from neutral Sweden
using a route which was dangerously exposed to the German Luftwaffe. BOAC also
operated a service for returning flight crews to North America after they delivered
American- and Canadian-built aircraft to the Royal Air Force.

When the war ended BOAC had a fleet of 160 aircraft and an aerial network that covered
54,000 miles. The South American destinations of BOAC were assigned to a new state-
owned airline, British South American Airways (BSAA), in March 1946. Similarly, the
European services were turned over to British European Airways (BEA) on August 1,
1946. After the war Britain reestablished its overseas services to the nations of its empire.
Some of the nations which had recently gained their independence from Britain received
advice (and often finance) from BOAC.

In order to remain competitive with the American airline companies, BOAC purchased
Lockheed Constellations, the most advanced commercial aircraft of the day. They were
later joined by Boeing 377 Stratocruisers and Canadair Argonauts (modified DC-4s).
BEA operated generally smaller airplanes and more frequent flights between the British
Isles and Continental Europe. In 1948 it joined other Allied airline companies in the
airlift to Berlin during the Soviet blockade.

Following a series of equipment failures at BSAA, the Civil Aviation ministry declared
that the company should remerge with BOAC. On July 30, 1949, BSAA was absorbed by
BOAC. Even though its passenger load had steadily increased, BOAC accumulated a
debt of £32 million in the five years from 1946 to 1951. Much of this was due to
"recapitalization," or purchasing new equipment; the British-built Handley Page Hermes
and de Havilland's DH Comet 1, the world's first jetliners, were delivered to BOAC.

In January 1954 one of BOAC's Comets exploded near Elba in the Mediterranean.
Another Comet crashed near Naples only 16 days after an investigation of the first crash
was concluded. As a result, the Comet's certificate of airworthiness was withdrawn and a
full investigation was ordered. In the final report it was determined that the Comet's
pressurized cabin was inadequately designed to withstand low air pressures at altitudes
over 25,000 feet. When the airplane reached that altitude it simply exploded. The cabin
was strengthened and the jet reintroduced in 1958 as the DH Comet 4.

The company was forced to purchase propeller-driven DC-7s to cover equipment


shortages when delivery of its Britannia turboprops was delayed in 1956. When the
Comet reentered service BOAC found itself with two undesirable fleets of aircraft which
were later sold at a loss of £51 million ($122 million).

South American operations were suspended in 1954 when the Comet was taken out of
service. Operation of the route with shorter range aircraft was too costly. At the insistence
of Argentina and Brazil, which claimed Britain had "lost interest" in South America, the
routes were reopened in 1960. That same year the first of 15 Boeing 707 jetliners was
delivered to BOAC.

British European Airways used a wide variety of aircraft for its operations and remained
a good customer for British aircraft manufacturers. In 1964 the company accepted
delivery of the first de Havilland Trident 1, a three-engine airliner capable of speeds up to
600 miles per hour. A few years later, when the company expressed an interest in
purchasing a mixed fleet of Boeing 727s and 737s, it was instructed by the government to
"buy British" instead. BEA complied, ordering BAC-111s and improved versions of the
Trident.

BOAC's cargo traffic was growing at an annual rate of 27 percent. Nevertheless, a sudden
and unexplained drop in passenger traffic during 1961 left many of the world's airline
companies with "excess capacity," or too many empty seats to fly profitably. At the end
of the fiscal year BOAC's accumulated deficit had grown to £64 million. The losses,
however, were underwritten by the British government, which could not allow its flag
carrier to go bankrupt.
BOAC and Air France agreed to commit funds for the buildings of a supersonic transport
(SST) in 1962. In June the company became associated with the Cunard Steamship
Company. A new company, BOAC-Cunard Ltd., was placed in charge of the trans-
Atlantic air services in an attempt to capture a larger portion of the American travel
markets.

The British government published a "White Paper" (a statement of government policy)


which recommended a drastic reorganization of BOAC. In response, the company's
chairman, Sir Matthew Slattery, and the managing director, Sir Basil Smallpiece,
resigned. Britain's minister for aviation appointed Sir Giles Guthrie as the new chairman
and chief executive officer. Under Sir Giles BOAC suspended its unprofitable services
and rescheduled its equipment purchases and debt payments. After the financial situation
had improved, the company continued to purchase new equipment and expand its flight
network. In April of 1967 BOAC established its second around-the-world route and
opened a new cargo terminal at Heathrow.

The company's sister airline, BEA, had been paying close attention to consumer
marketing for vacationers. In 1967 the company created a division called BEA Airtours
Ltd., offering complete travel packages to a number of vacation spots. In May 1969
BOAC opened a passage to Japan via the North Pole. The route was shortened even
further when the Soviet Union granted BOAC landing rights in Moscow and a Siberian
airlane to Tokyo.

On March 31, 1972, after six years of record profits, BOAC announced that it no longer
owed any money to the government. Later, on July 17, following several
recommendations on further reorganization of the state-owned airline companies,
management of BEA and BOAC were coordinated under a new government agency
called the British Airways Group. On April 1, 1974 the two companies were merged and
renamed British Airways. A second reorganization of the internal management structure
took place in 1977.

The first British Airways Concorde was introduced in 1976. Jointly manufactured by
British Aerospace and the French firm Aerospatiale, the supersonic Concorde was
capable of carrying 100 passengers at the speed of 1,350 miles per hour at an altitude of
55,000 feet. A seven-hour flight from New York to London was nearly reduced to half
the time by the Concorde. British Airways employed additional Concordes on a number
of international services, most notably London-Singapore, which was temporarily
suspended through 1978 due to "political difficulties."

In 1980 Prime Minister Margaret Thatcher appointed Lord (John) King as the new
chairman of British Airways. His stated assignment was to prepare the airline for
privatization (sale to private stockholders). Lord King's first move was to adopt
aggressive "American-style" marketing and management philosophies. As a result, he
initiated a massive campaign to scale down the company and reduce costs. More
unprofitable air services were terminated, and a staff reduction (begun under Lord King's
predecessor, Roy Watts) was continued. A British Airways official told Business Week
magazine that, "we had too many staff but couldn't get rid of them because of the
unions." In order to utilize the excess labor, the company was forced to remain large.
Lord King established a better relationship with labor, which had become more agreeable
to layoffs and revisions of work rules. In three years the work force was reduced from
60,000 to 38,000 without a strike.

On July 11, 1983, no fewer than 50 senior executives were fired. The company's chief
executive officer, Colin Marshall, hired in their place a team of younger executives
(mostly with nonairline business backgrounds). The new executive staff initiated a series
of programs to improve punctuality and service at the airline, whose BA acronym stood
in many customers' minds for "Bloody Awful." They hired Landor Associates, a
successful San Francisco-based design firm with considerable experience with airlines, to
develop an entirely new image for British Airways. The result was controversial. The
British Airways coat of arms and portion of the Union Jack on the airplane's tail fin was
bound to upset the more politically temperamental countries of the third world which the
company serves. The familiar "Speedbird" logo which dates back to the days of Imperial
Airways was removed despite employee petitions to retain it.

British Airways also recognized a need to replace older airplanes in its fleet with more
modern and efficient equipment. The company's Lockheed TriStars were sold to the RAF
for conversion into tankers, and the BAC-111s were sold because they would violate new
noise regulations. British Airways leased a number of airplanes until new purchases
could be made after the privatization.

The company was plagued by its decision to retain separate European and overseas
divisions. The result was a perpetuation of the previous management regimes of BEA and
BOAC. To rectify this problem the operation was further divided into eight regional
groups involved in three different businesses: cargo, charter, and tours. Each of the eight
groups has increased autonomy and responsibility for its business and profitability.

The Laker Airways Skytrain, an initially successful cut-rate trans-Atlantic airline, was
forced to close down due to what its chairman, Freddie Laker, claimed was a coordinated
attack by a number of airlines to drive the company into bankruptcy. Laker charged the
companies, which included British Airways, with violations of antitrust laws. He later
settled out of court for $48 million, but in a subsequent civil suit British Airways was
also required to issue travel coupons to passengers who claimed they were hurt by the
collapse of Laker Airways.

Ironically, in the mid-1980s the company began advocating the deregulation of European
air fares in the belief that it could compete more effectively than its rivals. But Air France
and Lufthansa in particular were reluctant to participate, claiming that deregulation would
endanger the delicate market balance which took so many years to establish.

In 1985 British Airways was made a public limited company, but all its stock was
retained by the government until such time that it could be offered to the public. The
privatization of British Airways (which was limited to a 51 percent sale) was delayed by
a number of problems. The company's chief domestic rival, British Caledonian, opposed
British Airways' privatization claiming that the company already controlled 80 percent of
the domestic market and was too large to compete against. But British Airways' most
significant obstacle to privatization involved reducing the debt that it accumulated during
the 1970s, and increasing the company's profitability. In February 1987 the privatization
was finally consummated when 720.2 million shares of British Airways stock were sold
to the public for one billion pounds ($1.47 billion).

British Caledonian, or BCal, was formed in 1970 through the merger of Caledonian
Airways and British United Airways. For many years, BCal was British Airways' only
large domestic competitor, fighting vigorously under the direction of Sir Adam
Thompson for more favorable operating rights from the British government. When
Britain's Civil Aviation Authority recommended the reallocation of British Airways
routes to BCal in 1984, Lord King threatened to resign. Instead, British Airways was
instructed to trade its profitable Middle East routes for some of BCal's less profitable
Latin American destinations. The Middle Eastern routes became much less popular
during 1986 as a result of regional tensions and falling oil prices. BCal, which had been
generating a fair profit, started to lose money and was faced with bankruptcy.

In July 1987 British Airways acquired BCal for £237 million in stock. The new airline
had almost 200 aircraft, and combined British Airways' 560,000-kilometer route structure
with BCal's largely unduplicated 110,000-kilometer network, forming one of the largest
airline companies in the world. Several smaller independent British airline companies
unsuccessfully challenged the BA/BCal merger on the grounds that the new company
would dominate both London's Heathrow and Gatwick airports, forcing them to relocate
to the less accessible and underdeveloped field at Stansted.

With its dominance of the home market secure for the time being, British Airways
aggressively expanded in Europe, North America, and the Pacific Rim over the next
several years, aiming to become a global airline. Its first foray into the lucrative U.S.
market came in 1988 when it formed a marketing alliance with United Airlines designed
to feed customers from one carrier to the other and vice versa. This partnership set the
pattern for British Airway's expansion--it would not be based on forming new airlines
outside England or acquiring them, but rather through strategic alliances. Nevertheless,
this first partnership collapsed a little more than two years later when United became a
direct competitor to British Airways once it had gained access to Heathrow in 1991,
along with American Airlines. The two strongest airlines in the United States had
purchased the Heathrow rights from the floundering Pan Am and TWA, immediately
increasing competition in British Airways' home market.

While the alliance with United was still operating, British Airways suffered losses in
Europe in 1990 and 1991 because of the Gulf crisis in the Mideast. Shortly after, in July
1991, it entered into an alliance with Aeroflot in Russia to create a new airline called Air
Russia. After several false starts over the next few years, this venture never got off the
ground. Additional proposed alliances failed in 1992 for other reasons. Officials from
British Airways and KLM Royal Dutch Airlines held extensive discussions about a
merger in 1991 and 1992, but talks broke down over the valuation of the two firms. Later
in 1992, British Airways attempted to purchase 44 percent of USAir Inc. for $750
million. American, United, and Delta Air Lines (the U.S. "Big Three") vigorously
lobbied against the deal and demanded enhanced access to the British market if the deal
was to be approved by the U.S. government. In December the purchase was blocked.

That same month the first in a string of alliances was struck when the airline paid $450
million for 25 percent of Qantas, the Australia-based international airline. In 1993,
British Airways gained a 49.9 percent stake in the leading French independent carrier
TAT European Airlines, then launched a start-up in Germany called Deutsche BA with
49 percent ownership. Through these alliances, British Airways had enhanced its position
in the Pacific Rim and Europe. It now refocused its attention across the Atlantic where it
restructured its offer for a piece of USAir into a $400 million purchase of 25 percent of
the company. This alliance received U.S. government approval. The government also
approved a code-sharing arrangement that enabled the partners to offer their customers a
seamless operation when they use both airlines to reach their destination.

While all this dealmaking was going on abroad, British Airways faced an embarrassing
and potentially costly fight at home with Richard Branson's upstart Virgin Atlantic
Airlines. Since starting operations in the early 1980s, Virgin had made some inroads
against British Airways primarily by focusing on customer service, something "Bloody
Awful" BA had neglected for years. Branson filed suit against British Airways in 1991
alleging that British Airways had smeared Branson and his airline and conducted "dirty
tricks" such as spreading rumors about Virgin's insolvency. In 1993 the suit was settled
out of court with British Airways offering a public apology and paying £500,000 to
Branson and £110,000 to Virgin. The case also led to the resignation of Lord King.
Second-in-command Colin Marshall took over as chairman. Further litigation followed
between the two rivals, most seriously a $1 billion antitrust suit brought by Virgin in the
United States. Various suits damaged British Airways' reputation and led to comments
such as the following from the Economist: "BA now looks ... like an anxious, overbearing
giant trying to squash a feisty little rival."

With its Virgin difficulties continuing, British Airways' overseas partners suffered huge
losses: in 1993 Qantas lost $271 million, while in 1994 TAT lost $60 million and USAir
lost $350 million. The situation at USAir was so grim that British Airways declared that
they would hold back an additional $450 million investment in the firm until the carrier
was in the black. In May 1995 British Airways was forced to take a $200 million charge
to write down the value of its USAir investment.

Even though British Airways was struggling with its alliance strategy, the real test of its
global strategy lay ahead with the long-awaited 1997 deregulation of the European airline
industry. It approached that date as one of the most profitable airlines in the world,
despite the faltering alliances, and had been in the black every year since privatization.

Principal Subsidiaries: British Airways Capital Ltd. (89%); British Airways Finance
BV; British Airways Holidays Ltd.; Caledonian Airways Ltd.; Qantas Airways Ltd.
(25%, Australia); TAT European Airlines S.A. (49.9%, France); Deutsche BA L.m.b.H.
(49%, Germany); Air Russia (31%); Bedford Associated, Inc. (U.S.); British Airways
(U.S.); Galileo International Partnership (14.6%, U.S.); USAir Group, Inc. (24.6%, U.S.).

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