British Airways
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| Founded | 1924 (as Imperial Airways) | ||||||
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| Hubs | London Heathrow Airport London Gatwick Airport | ||||||
| Focus cities | Manchester International Airport | ||||||
| Frequent-flyer program | Executive Club | ||||||
| Alliance | oneworld | ||||||
| Fleet size | 363 | ||||||
| Destinations | 222 | ||||||
| Parent company | British Airways Plc. | ||||||
| Headquarters | London, England, United Kingdom | ||||||
| Key people | Willie Walsh (Chief Executive) | ||||||
| Website | http://www.ba.com | ||||||
British Airways (LSE: BAY, NYSE: BAB) is the largest airline of the United Kingdom. It is also one of the largest airlines in the world, with more flights from Europe across the Atlantic than any other operator. Its main hubs are London Heathrow and London Gatwick, with wide-reaching European and domestic shorthaul networks, including smaller hubs at other UK airports including Manchester, from which some longer-haul flights are also operated.
History
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The airline's origins go back to the birth of civil aviation and the pioneering days after the First World War. On 25 August 1919 its forerunner company, Aircraft Transport and Travel (AT&T), launched the world's first daily international scheduled air service, between London and Paris. On 31 March 1924, Britain's four fledgling airlines - Instone, Handley Page, Daimler Airways (a successor to AT&T) and British Air Marine Navigation - merged to form Imperial Airways, which developed its Empire routes to Australia and Africa.
Meanwhile a number of smaller UK air transport companies had started flights. These merged in 1935 to form the original privately-owned British Airways Ltd. Following a government review Imperial Airways and British Airways were nationalised in 1939 to form the British Overseas Airways Corporation (BOAC). Post-war, BOAC continued to operate long-haul services, other than routes to South America - these were flown by British South American Airways, which was merged back into BOAC in 1949. Continental European and domestic flights were flown by a new airline, British European Airways (BEA).
The 1950s saw the passenger jet era - led by BOAC, with the De Havilland Comet flying to Johannesburg in 1952, halving the previous flight time. The birth of the mass package-holiday business meant changes for the airline industry. BEA met this by establishing BEA Airtours, which took off in 1970. In 1972 BOAC and BEA were combined under the newly formed British Airways Board, with the separate airlines coming together as British Airways in 1974. British Airways, simultaneously with Air France, inaugurated the world's first supersonic passenger service with Concorde in January 1976.
Privatisation
Sir John King, later Lord King, was appointed as Chairman in 1981 with the mission of preparing the airline for privatisation. King hired Colin Marshall as CEO in 1983. King was credited with turning around the loss-making giant into one of the most profitable air carriers in the world, boldly claiming to be "The World's Favourite Airline", while many other large airlines struggled. The airline's fleet and route map were overhauled in the early years of King's tenure, with brand and advertising experts being recruited to change the airline's image. Over 23,000 jobs were shed in the early 1980s, though King managed the considerable trick of boosting staff morale and modernise operations at the same time.
The flag carrier was privatised and floated on the London Stock Exchange in February 1987 by the Conservative government, with the initial share offering being 11 times oversubscribed. In April 1988 British Airways effected the controversial takeover of Britain's second-force airline British Caledonian, and in 1992 absorbed Gatwick-based carrier Dan-Air.
"Dirty tricks"
Soon after privatisation Richard Branson's Virgin Atlantic, which began with one route and one Boeing 747 in 1984, was beginning to emerge as a competitor on some of BA's most lucrative routes. Following Virgin's highly publicised mercy mission to Iraq to fly home hostages of Saddam Hussein in 1991, King is reported to have told Marshall and his PA Director David Burnside to "do something about Branson" ¹. This began the campaign of "dirty tricks" that ended in Branson suing King and British Airways for libel in 1992. King countersued Branson and the case went to trial in 1993. British Airways, faced with likely defeat, settled the case, giving £500,000 to Branson and a further £110,000 to his airline; further, BA was to pay the legal fees of up to £3 million. Branson divided his compensation among his staff, the so-called "BA bonus".
Changes and Subsidiaries
During the 1990s BA became the world's most profitable airline and trumpeted the slogan "The World's Favourite Airline." In 1992 Deutsche BA was established as a subsidiary operating in Germany. By the time it was sold in June 2003 DBA was operating 16 Boeing 737s and was the second-largest German domestic carrier, after Lufthansa.
Lord King stepped down as chairman in 1993 and was replaced by former deputy Colin Marshall, who initially combined the roles of CEO and Chairman. Bob Ayling, who would later take on the role of CEO, was appointed Managing Director by Marshall. Lord King was appointed President, a role created specifically for him, and became President Emeritus in 1997, until his death in July 2005.
In 1995 BA formed British Asia Airways, a subsidiary based in Taiwan. British Asia Airways was set up due to political sensitivities, the Union Jack tailfin being replaced by Chinese characters. Many airlines followed the same practice, e.g. Qantas flew to Taiwan as "Australia Asia Airways" and KLM's Taiwan operations became "KLM Asia". British Asia Airways ceased operation in 2001 when the airline suspended flights to Taiwan due to low yield.
Bob Ayling
In 1996 British Airways, with its newly appointed Chief Executive Bob Ayling, entered a period of turbulence. Increased competition, high oil prices and a strong pound hurt profits. BA management and trade unions clashed and the disruption cost the company hundreds of millions of pounds. In 1997 Ayling dropped BA's traditional Union Flag tailfin livery in favour of world design tailfins, in an effort to change its image from a strictly British and aloof carrier to a more cosmopolitan airline. The move was not a success and Ayling slowed the process, eventually declaring the fleet would sport a dual livery; half a Union Flag design, half the world design tailfins. Ayling pursued a merger with American Airlines, but this was unsuccessful due to the conditions placed on the deal by regulatory authorities, the most painful of which would have been the sacrifice of landing slots at Heathrow.
Positive news during Ayling's reign included cost savings of £750m and the establishment of the successful, but highly subsidised, Go in 1998. Go was a low-cost carrier intended to compete in the rapidly emerging "no-frills" segment. After four years of successful operations, the airline was sold off to venture capitalists 3i and later merged with easyJet. Ayling also sought a reduction of capacity, cancelling Boeing 747-400 orders in favour of the Boeing 777 and rationalising BA's short-haul fleet with an order for the efficient Airbus A319/A320/A321 family.
Rod Eddington
In 1999 British Airways reported a 50% slump in profits, its worst since privatisation. In March 2000 Bob Ayling was removed from his position. British Airways announced Rod Eddington as his successor in May. Eddington set about cutting the workforce further, dramatically so after the slump caused by the September 11th attacks in 2001. In May 2001 Eddington announced the return of the Union Flag to the entire fleet, reversing his predecessor's rebranding exercise.
Marshall, who had been appointed a life peer in 1998, retired as Chairman in July 2004 and was replaced by Martin Broughton, former Chairman of British American Tobacco.
On 8 March 2005, Broughton announced that former Aer Lingus CEO Willie Walsh would take over from Rod Eddington upon his retirement in September 2005.
During the fiscal year ending 2005, BA carried some 35m passengers on revenue exceeding £7.8bn, posting a pre-tax profit of £415m. It employs 51,939 staff.
Willie Walsh
In September 2005 new CEO Willie Walsh announced changes to the management of British Airways, with the aim of saving £300 million by 2008, the cost of the move to Heathrow's Terminal 5.
Since 2004, BA has strongly marketed the full-service nature of its domestic flights (i.e the use of principal airports, complimentary food and drink) in response to the low cost operators aggressive pricing, even though its main full-service UK rival bmi has now abandoned some "frills" on its domestic network. Walsh on the other hand pledged to retain the full-service model, and sees it as a means of distinguishing BA from the competition and that customers will still be willing to pay extra for added levels of service.
Industrial action
Over 600 BA flights were grounded on 11 August 2005 - 12 August 2005, when baggage handlers, loaders, and cargo staff went on strike in support of laid-off catering workers.
Financial performance
| Year ended | Turnover (£m) | Profit/loss before tax (£m) | Net profit/loss (£m) | Basic eps (p) |
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| 31 March 2006 | 8,515 | 620 | 467 | 40.4 |
| 31 March 2005 | 7,772 | 513 | 392 | 35.2 |
| 31 March 2004 | 7,560 | 230 | 130 | 12.1 |
| 31 March 2003 | 7,688 | 135 | 72 | 6.7 |
| 31 March 2002 | 8,340 | - 200 | - 142 | - 13.2 |
| 31 March 2001 | 9,278 | 150 | 114 | 10.5 |
| 31 March 2000 | 8,940 | 5 | - 21 | - 2.0 |
| 31 March 1999 | 8,915 | 225 | 206 | 19.5 |
| 31 March 1998 | 8,642 | 580 | 460 | 44.7 |
| 31 March 1997 | 8,359 | 640 | 553 | 55.7 |
| 31 March 1996 | 7,760 | 585 | 473 | 49.4 |
Operations
British Airways is based at London Heathrow Airport in London, England. It also has a commanding presence at Gatwick and Manchester International Airport. BA has succeeded in dominating Heathrow to the point that the airport is commonly referred to as Fortress Heathrow within both the airline and its competitors.
As an incumbent airline, BA had grandfather rights to around 36% of takeoff and landing slots at Heathrow, many of which are used for the lucrative trans-Atlantic market. Some competitors, such as Virgin Atlantic, bmi and United Airlines, assert that this stifles competition and some political think-tanks recommend an auction of slots. In recent years British Airways has been buying slots from other airlines including United Airlines, SN Brussels and Swiss International Air Lines, and now owns about 40% of slots at Heathrow.
Some British Airways services are operated by subsidiaries and franchisees:
Subsidiaries
Franchisees
- British Mediterranean Airways, UK, franchisee since 1997.
- Comair, South Africa, franchisee since 1996.
- GB Airways, UK, franchisee since 1 February 1995.
- Loganair, UK, franchisee since July 1994.
- Sun Air, Denmark, franchisee since 1 August 1996.
British Airways is pioneering the use of "flat beds" in the premium cabins on their long-haul routes. With introduction of a new flat bed in Club world Summer 2006 and on demand video IFE system keeping up to date with the competition. On 8 September 2004 British Airways announced that it was to sell its 18.5% stake in Qantas, but would continue their alliance (such as sharing revenue), particularly on the Kangaroo routes. Commentators have suggested that while the expected £425m from the sale will be used to reduce the airline's debt mountain it may also be used to fund expansion.
It owns a 19% stake in Spanish airline Iberia.
British Airways is a founding member of the oneworld airline alliance.
Incidents and accidents
- On the 24 June 1982, flight 009, a 747-200, G-BDXH, City of Edinburgh flew through a cloud of volcanic ash and dust from the eruption of Mount Galunggung, causing all four engines to fail. The aircraft managed to glide out of the dust cloud and restart three engines, allowing it to make an emergency landing at Jakarta.
- On 10 June 1990, British Airways Flight 5390, a BAC 1-11 flight between Birmingham and Malaga, suffered a windshield blowout. The pilot was partially sucked out of the cockpit but was held back by the crew. The co-pilot landed the plane safely at Southampton Airport with no fatalities.
- On August 2, 1990- British Airways 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.
- On 19 February 2005, the No 2 engine of a Boeing 747-400 (G-BNLG) surged 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. The crew shut the engine down. They continued the climb and, having checked the performance figures, decided that continuing to London was possible. Because it was cleared for a lower transatlantic flight level than requested, the aircraft suffered a fuel shortage and had to divert to Manchester. The United States Federal Aviation Administration has been critical of the crew's decision, but there was no breach of regulations and BA has supported the crew decision (ref:Flight International, July 2005).
- On 25 February 2005, a crew flying the same aircraft (G-BNLG) also had to shut an engine down, this time in the cruise from Singapore to London, and the crew again elected to continue. This time they landed without any further incident at their destination (ref: Flight International, July 2005).
Destinations
Flight Numbers
Generally, odd numbers are for services departing Britain, even numbers are for services entering Britain.
- British Airways flight numbers 1-1500, 1502-1503 and 2000-3999 are operated by British Airways.
- Flight numbers 1501-1999 are operated by British Airways Connect.
- Flight Numbers from 1-199 are for long haul intercontinental international flights from Heathrow.
- Flight Numbers from 200-299 are for flights between Heathrow and the Americas (except Canada, New York City, Newark, Seattle).
- Flight Numbers from 300 to 999 are for European flights to and from Heathrow.
- Flight Numbers from 1000 are for domestic services from Heathrow
- Flight Numbers from 2000-2999,are for services from Gatwick.
- Flight Numbers from 4000-8999 are code share services operated by other airlines (including BA Connect).
Fleet
Until the late 1990s BA had been mainly a Boeing customer. This has been always been a subject of controversy, as many expect that as a British carrier it would be natural for BA to support the British manufacturing industry and buy Airbus jets (many Airbus subcontractors are based in the UK). The company has defended its decision by arguing that, with the exception of 29 of its 777 fleet, it has always equipped its Boeing aircraft with British-made Rolls-Royce engines; although some of their older 777s are powered by General Electric GE90 engines. This goes back to the 1960s when the company ordered Boeing 707s - a condition was placed on the company that it used Rolls-Royce power for the new jets.
However, it has operated non-Boeing planes in the past mainly as a result of takeovers and joint agreements with other airlines. One example of this was planes acquired through the buyout of British Caledonian Airways in the 1980s; it successfully operated the Douglas DC-10 and Airbus A320 for a number of years. In the late 1990s British Airways placed its own first direct Airbus order, for over 100 A320/A319s to replace its own ageing fleet of Boeing 737s.
BA was an operator of the supersonic Aerospatiale-BAC Concorde supersonic airliner, with a daily service between Heathrow and New York JFK (although the original service was from London to Bahrain). Initially, Concorde was very much a financial burden, placed on the national carrier by the government, and attracted criticism from the press as a white elephant. However Lord King recognised the charismatic importance of Concorde to British Airways. BA used Concorde to win business customers, guaranteeing a certain number of Concorde upgrades in return for corporate accounts with the airline - a key factor in winning business from transatlantic competitors.
With the Paris Crash in 2000, followed by the 9/11 terrorist attacks the following year, coupled to escalating maintenance costs, the future of Concorde was limited despite the expensive modifications after the crash. It was announced (on 10 April 2003) that, after 24 October 2003, they would cease scheduled services with Concorde, due to depressed passenger numbers. The last day of its Saturday-only London Heathrow to Barbados Concorde flight was on 30 August 2003.
Current Fleet
The British Airways fleet consists of the following aircraft (at December 2005):
- 33 Airbus A319-100
- 5 Airbus A320-100
- 21 Airbus A320-200 (further 7 on order)
- 7 Airbus A321-200 (further 3 on order)
- 5 Boeing 737-300
- 18 Boeing 737-400
- 9 Boeing 737-500
- 57 Boeing 747-400
- 13 Boeing 757-200
- 21 Boeing 767-300ER
- 27 Boeing 777-200
- 16 Boeing 777-200ER
- 0 Boeing 777-300ER (signed Letter of Intent for 10 777s, subtype not specified)
In March 2006, the average age of British Airways fleet was 9.7 years old.
British Airways offer between two and four classes of service on their longhaul international routes. World Traveller (Economy Class) and Club World (Business Class) always feature. Most aircraft are also fitted with World Traveller Plus (Premium Economy) and FIRST (First Class).
Current longhaul international seat pitches are as follows:
- World Traveller (Economy Class): 31" (127 seats on the 777-200 and between 177 and 272 seats on the 747-400)
- World Traveller Plus (Premium Economy): 38" (40 seats on the 777-200 and between 30 and 36 seats on the 747-400)
- Club World (Business Class): 6' flat bed (48 seats on the 777-200 and between 38 and 70 seats on the 747-400)
- FIRST (First Class): 6'6" flat bed (14 seats on the 777-200 and 14 seats on the 747-400)
Future
The long-term replacement of the 767 fleet is likely to lead to a purchase of the Boeing 787 or Airbus A350.[1] Additionally it is now seen likely that selection for the replacement of the Boeing 737 Classic fleet of 34 aircraft will see both Airbus A320 series and Boeing 737NG evaluated, rather than being a simple follow-on order for additional A320 series aircraft. [2] British Airways' decision to replace its Boeing 747-400s will be viewed with interest, whether it selects the Airbus A380 or Boeing 747-8.
British Airways also has options for 99 Airbus A320's, this option applies to the total A320-series.
Tail fins
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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. In 1997, they began to be repainted (and the planes re-named) with abstract world images, Delft pottery or Chinese calligraphy for example, relating to countries they fly to. This caused problems with air traffic control: previously controllers had been able to tell pilots to follow a BA plane, but because they were each painted in different colours they were harder to identify.
Margaret Thatcher famously covered the tail fin of a model aircraft with the new design using her handkerchief at the 1997 Conservative Party conference. She claimed they made it look like a third world airline. "We fly the British flag, not these awful things."
In May 2001, chief executive Rod Eddington declared that all BA planes would be repainted with the Chatham Dockyard Union Flag, a design first used on Concorde.
World Cargo
BA is, through its subsidiary British Airways World Cargo, the world's fifth-largest cargo airline. BA World Cargo has global reach through the British Airways scheduled network. In addition to the main fleet, BA World Cargo wet lease three Boeing 747-400F dedicated freighter aircraft from Global Supply Systems on a long term basis, as well as utilising space on dedicated freighters operated by other carriers on European services. Dedicated freighter services allow the airline to serve airports not currently connected to the scheduled network, such as London Stansted, Glasgow Prestwick, Frankfurt-Hahn, Vitoria and Seoul.
British Airways opened its £250m World Cargo centre, Ascentis, at Heathrow in 1999. As one of the largest and most advanced automated freight handling centres in the world, it contains a handling centre for unusual and premium cargo, and a perishables handling centre for fresh produce, of which it handles over 80,000 t per year. 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.
Executive Club
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Executive Club is British Airways' frequent flyer program. It's purpose is to encourage loyalty amongst British Airways' passengers by rewarding regular passengers with free flights and access to additional amenities and services. It follows a similar pattern to most European carriers' programs, and forms part of the network of frequent flyer programs in the oneworld alliance.
The Executive Club has four levels, or tiers of membership: Blue, Silver, Gold & Premier. Membership of the Blue tier is open to anyone over the age of 18 who has flown a 'qualifying flight' in the past three months. Qualifying flights are those in premium cabins (FIRST, Club World/Europe and World Traveller Plus) or some of the most expensive flexible economy tickets. For each flight taken, the member receives both Tier Points and BA Miles. The total number of tier points earned in a year determines whether the member's level is Blue, Silver or Gold. BA Miles can be redeemed against air travel or in some cases to upgrade to a premium class.
The criteria for membership of the Premier Tier of the Executive Club are not publicly disclosed by the company. It is issued (following consideration by the British Airways Board) to those customers who are considered to control extremely large travel budgets or to those with whom the company particularly wishes to be associated with. It is not possible to obtain a Premier card simply by flying a great deal with the airline.
A characteristic of the British Airways Executive Club is that in comparison with other frequent flyer programmes it is relatively difficult for leisure travellers and those who only fly on the cheapest tickets to advance above the Blue tier. Travel on discounted economy fares aid in the advancement of tier status, whereas other airline programs often allow partial credit for discounted economy fares. At Blue level the programme allows customers to accrue BA miles which can be used to purchase flights or upgrades on all BA flights and purchase flights on all OneWorld flights. Leisure fares also accrue Miles, but less Tier points (which are needed to progress to Silver or Gold status). Balancing this the benefits of the Silver and Gold cards are considerable, including access to airport lounges and dedicated reservation lines.
Tier Levels
Blue – Entry 20
Silver – Entry/Renewal 600
Gold – Entry/Renewal 1500
Premier – Entry/Renewal Estimated to be £1m a year in business with British Airways
Other facts
- British Airways and Air France were the only two Concorde operators.
- British Airways was the first airline to implement full-flat beds in Business class, many airlines subsequently followed the practice.
- The airline is the largest operator of the Boeing 747-400, with 57 aircraft. JAL has the largest fleet of 747s, but only 45 are Series 400s.
- British Airways aircraft generally use the Airline call sign "Speedbird" in ATC radio transmissions. On UK Domestic routes from Heathrow and Gatwick the call sign "Shuttle" is used. Christmas charters use the call sign "Santa".
- British Airways has featured prominently in recent James Bond films, most notably an air-air shot of a BA 747 in Die Another Day.
- Boeing's airline code for BA is XXX-X36, i.e. 737-236, 747-436, 777-236.
- British Airways' Frequent Flyer Program is one of the largest in the world, and is known as the Executive Club
- In recent years, British Airways has transported Queen Elizabeth II and the British Prime Minister on official duties, using a dedicated Boeing 777 aircraft. Royal Air Force transports were traditionally used in such roles.
- British Airways was, together with Virgin Atlantic, a premier partner of the London 2012 Olympic bid campaign. One of the airline's Boeing 747-400 aircraft became a "flying petition" for the games, with Prime Minister Tony Blair being the first to sign the aircraft. The official bid campaign video also featured BA and Virgin flight attendants 'competing' in a race to cross a road.
- The music used on BA advertisements for many years is "Flower Duet" by Léo Delibes.
- British Airways is part of the InterCapital and Regional Rail alliance, which in 1998 was awarded the contract to manage Eurostar (U.K.) Ltd. The company, which is the UK arm of Eurostar, the cross-Channel rail operator, makes up 10% of the alliance that also includes SNCF, SNCB and National Express Group.
- British Airways is an investor in Public-Private Partnership Guided Bus system which operates in Crawley and Horley for Gatwick Airport that is called the Crawley Fastway network, and is used by workers of Gatwick Airport to get to the airport in an attempt to alleviate traffic congestion in the area.
- The airline is the principal sponsor of the British Airways London Eye observation wheel, one of the main tourist attractions of the UK. From its inception BA held a 33% stake in the Eye, but sold this to the Tussauds Group (who already held a 33% stake and operated the Eye) in November 2005.
External links
British Airways in the news
- Sir Freddie Laker - BBC
- Recent flight routes - BBC
- BA leaves High Street - FT
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