The story
Inception
Caledonian Airways acquired British United Airways (BUA) from British and Commonwealth (B&C) on 30 November (St. Andrew's Day) 1970, for £6.9 million. Three new BAC One-Eleven 500 aircraft, which B&C had leased to BUA, were bought £5 million. The acquisition did not include the assets of British United Island Airways (BUIA), BUA's regional affiliate. BCal inherited BUA's minority stakes in Gambia Airways, Sierra Leone Airways and Uganda Aviation Services.. BCal was a full member of the International Air Transport Association (IATA) from the start by inheriting BUA's membership. This included membership of IATA's trade association as well as participation in tariff co-ordination with other member airlines in the organisation's annual traffic conferences.
BCal was a wholly owned subsidiary of Caledonian Airways Ltd. BCal itself had a number of subsidiaries including Caledonian Airways Equipment Holdings and Caledonian Airways (Leasing), which were set up to acquire and dispose of aircraft on behalf of the airline as well as to sell maintenance, training and management expertise to third parties. BCal owned two package holiday companies (Blue Sky Holidays and Golden Lion Tours) as well as several hotels in Spain and Sierra Leone.
The airline's formation followed publication of the Edwards report entitled British Air Transport in the Seventies in 1969. and a subsequent White paper from the government The report recommended the creation of a "Second Force", private sector carrier to take on the state-owned corporations — British European Airways (BEA) and British Overseas Airways Corporation (BOAC) — by providing competing domestic and international scheduled services on trunk routes. The government rejected the proposed transfer of routes from BOAC and BEA to the Second Force, and held that dual designation on a route should be open to any British independent. The new airline established its headquarters and operational base at Gatwick Airport and Sir Adam Thomson, one of the five co-founders as well as one of the main shareholders of Caledonian Airways, became its chairman and managing director.
BCal also had its own air freight terminal at Heathrow operating two weekly all-cargo flights from there until the early 1980s.
BCal began with a fleet of 31 jet aircraft: 11 long-haul aircraft (seven ex-Caledonian Boeing 707s and four ex-BUA Vickers VC10) and 20 short-haul planes (eight ex-BUA and four ex-Caledonian BAC One-Eleven 500s and eight ex-BUA BAC One-Eleven 200s). The issued share capital was £12 million — more than that of any other wholly private, British independent airline at the time — and its workforce numbered 4,400.
This made BCal the UK's foremost independent airline of the time. Although Dan-Air and Britannia Airways exceeded BCal's total annual passenger numbers from 1975, BCal maintained its position as Britain's leading independent international scheduled airline, in terms of both the number of scheduled passengers carried each year and the total yearly scheduled capacity measured in passenger kilometres, throughout its 17-year existence.) The newly created company's output measured in available capacity tonne kilometres was greater than that of some of the smaller, contemporary European flag carriers, such as Aer Lingus, Air India, Sabena, or Swissair. By that measure, BCal was about the same size as Australia's flag carrier Qantas.
The institutional investors that had helped Sir Adam Thomson and John de la Haye launch Caledonian Airways back in 1961 were also among the shareholders of the newly constituted airline. They included The Automobile Association (AA), Great Universal Stores (GUS), Hogarth Shipping, Lyle Shipping, Industrial and Commercial Finance Corporation (ICFC) — one of the two predecessors of Investors in Industry, Kleinwort Benson, the Royal Bank of Scotland (RBS) and Schroders. (Airways Interests (Thomson), which had been set up at Caledonian's inception a decade earlier as an investment vehicle for that airline's founders to enable them to maintain control, was renamed Caledonian Airways Ltd and became the new group holding company.)
Before adopting the British Caledonian name, the new airline legally constituted two separate entities — Caledonian Airways (Prestwick) Ltd and British United Airways Ltd. These traded together under the interim name Caledonian//BUA until September 1971. The combined airline carried a total of 2.6 million passengers during its first year of operation.
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For accounting purposes, BCal's aircraft were respectively allocated to a "BUA Division" and "Caledonian Division" during the interim period. The former was responsible for all IATA activities. This encompassed all scheduled services. The latter was responsible for all non-IATA work. This included all non-scheduled operations. At that time, two-thirds of all passengers were carried on charter flights.
During that period, former BUA air hostesses still wearing that airline's blue uniforms were working alongside their tartan-clad, former Caledonian counterparts in the cabins of all passenger flights. Eventually, the Caledonian tartan uniforms became BCal's standard for female staff.
Following the interim period, Caledonian Airways (Prestwick) Ltd and British United Airways Ltd were merged into British Caledonian Airways Ltd (BCal). All former BUA aircraft were repainted adopting Caledonian's livery featuring a prominent Scottish Lion Rampant on its aircraft's fins. At that time, all aircraft were named after famous Scots and well-known Scottish places. This tradition was continued throughout the airline's 17-year existence. Some BCal aircraft were also allocated out-of-sequence registrations. (For instance, G-BCAL was allocated to one of the Boeing 707s, G-CLAN and G-SCOT were the registrations of the Piper Navajo Chieftains, G-DCIO was the registration of the eighth DC-10 and G-HUGE was the Boeing 747 Combi registration)
The "Second Force" inherited BUA's extensive network of scheduled routes serving the British Isles, Continental Europe, Africa and South America. Its scheduled ambitions were aided by the British Government transferring to it BOAC's West African trunk routes to Nigeria and Ghana as well as the corporation's North African route to Libya. These routes represented only 3% of BOAC's annual, worldwide turnover.
The Government also agreed to let it serve Casablanca in Morocco from Gatwick in competition with BEA's service from Heathrow. Furthermore, the Government agreed to license BCal to operate non-stop scheduled services between London and Paris and to begin negotiations with the French authorities to secure reciprocal approval for BCal to be able to commence scheduled operations on what was then the busiest international air route in Europe. BCal moreover received Government assurances that it would be designated as the UK's sole flag carrier on all routes transferred to it and that it would be assisted in obtaining traffic rights for additional, selected scheduled routes where it wished to compete with the corporations, including the lucrative London—New York and London—Los Angeles routes.
Another important concession by the Government designed to improve the competitiveness of the "Second Force" was to permit it to provide a first class cabin on its East African routes. (BUA, from whom BCal inherited these routes, had been prevented from offering a first class on its East African routes. To compensate for this loss of competitiveness, Sir Freddie Laker, BUA's managing director from 1960 to 1965, had come up with the idea of designing a cargo door to be installed on the left-hand side of the forward fuselage of that airline's long-haul VC10s, where the first class cabin was normally located. This modification permitted the carriage of additional freight instead of first class passengers on the East African routes.)
In addition, BCal became the Government's "chosen instrument of the private sector". This meant that the Government agreed to accord preferential status to BCal's worldwide scheduled ambitions, especially in the award of additional licences to operate scheduled services on major domestic and international trunk routes. The Government hoped that putting BCal's requirements ahead of other UK-based independent airlines' rival scheduled ambitions would help the new "Second Force" develop into a fully fledged, major international scheduled airline, thereby enabling it to achieve the critical mass to challenge the corporations' near-monopoly among UK-based scheduled airlines.
The Central London air terminal at Victoria Station in London's West End, which the "Second Force" inherited from BUA as well, allowed passengers to complete all check-in formalities, including dropping off their hold luggage, before boarding their train to the airport.
BCal also had a Gatwick airside lounge for its premium passengers, which it named Clansmen Lounge.
Formative years
BCal commenced scheduled operations from Gatwick to Nigeria (Lagos and Kano) and Ghana (Accra) in April 1971. Scheduled services from Gatwick to Tripoli began in July 1971. On each of these routes BCal replaced BOAC as the designated UK flag carrier. On 1 November 1971, BCal started scheduled flights between London Gatwick and Paris Le Bourget Airport, where it replaced BEA's London Heathrow—Paris Le Bourget service and competed with that airline's Heathrow—Paris Orly Airport service. This was the first time since the 1930s that an independent airline commenced a scheduled service on that trunk route.
BCal ended its 1970/71 financial year to 30 September 1971 with a profit of £1.7 million (after accounting for BUA's £600,000 loss)
In 1972, BCal extended its East African network to the Seychelles. The same year it also introduced a new Edinburgh—Newcastle—Copenhagen regional scheduled service to live up to its claim of being "Scotland's international airline". This complemented the Glasgow—Newcastle—Amsterdam regional route BCal had inherited from BUA.
1972 was also the year BCal introduced the UK's first-ever "no frills" type service on the two main domestic trunk routes linking London and Scotland. The airline introduced simultaneous night-time departures from Gatwick, Glasgow and Edinburgh, resulting in an overall frequency increase to six daily round-trips on each route. The company charged a very low £5 one-way fare on these night-time services, which were marketed under the Moonjet trademark. This move, which was modelled on the high-frequency-low-fares operation run by Pacific Southwest Airlines (PSA), the original "no frills" airline, along the busy San Diego—Los Angeles—San Francisco air corridor in California, boosted passenger numbers and profitability on both routes.
During that year, larger capacity, longer range and more fuel-efficient Boeing 707s replaced VC10s on BCal's South American routes, where the 707's greater range enabled the airline to run non-stop flights between London Gatwick and Rio de Janeiro, as well as on the West African trunk routes to Nigeria and Ghana.
As a result of the then prevailing, ruinous rates in the charter market, which still accounted for half of BCal's business, the airline incurred a loss of £194,000 during the financial year to 30 September 1972.
To support its ambitious expansion plans, BCal acquired a number of additional, second-hand Boeing 707s from various sources through its aircraft trading and leasing subsidiaries during the early 1970s. These included a pair of 320C series aircraft procured on a long-term lease from Britannia Airways featuring a two-class, "widebody look" interior. Another three 707s received re-modelled "widebody" cabins. All five were used to inaugurate the airline's transatlantic scheduled routes to New York and Los Angeles where the established competition was operating widebodied aircraft, such as the Boeing 747 "jumbo jet". It was thought that the aircraft's widebody style interiors would leave passengers with the impression that BCal was operating widebodied aircraft when in fact it was not. During that time, BCal placed an order with the British Aircraft Corporation (BAC) for two new One-Eleven 500s and acquired additional second-hand examples. At the same time, the airline disposed of some of its 707s, VC10s and One-Eleven 200s. These included the original pair of 399C series 707 aircraft that had been delivered to Caledonian Airways direct from the manufacturer in 1967/68.
BCal inaugurated its two transatlantic flagship services from London Gatwick to John F. Kennedy Airport (JFK) on 1 April 1973, followed by Gatwick — Los Angeles International a few days later. Earl Mountbatten of Burma was BCal's chief guest on board its inaugural Gatwick—JFK flight. (The flight diverted to Boston due to inclement weather in the New York area.) This occasion marked the first time that a British independent airline commenced non-stop transatlantic scheduled services on routes linking the UK and the US. Also on 1 April 1973, BCal replaced the two-letter CA airline designator – which was originally used to prefix all Caledonian Airways flight numbers and continued to prefix flight numbers allocated to transatlantic charter flights until 31 March 1973 – with the BR airline designator it had inherited from BUA at the time of its formation. This resulted in exclusive use of the BR designator as a prefix for all BCal flight numbers.
In 1973, BCal also inaugurated its fourth scheduled domestic trunk route between London Gatwick and Manchester. The new service was contracted to British Island Airways (BIA), BUIA's successor, which operated two daily return trips using its Handley Page Dart Herald turboprops.
On 20 March 1974, BCal switched its Gatwick—Paris services to the then brand-new Charles de Gaulle Airport in the northern Paris suburb of Roissy-en-France, thus becoming the first scheduled carrier to operate between London and the new Paris airport.
To further extend the network's reach and improve its connectivity, BCal agreed to host Dan-Air's new, twice daily Gatwick—Newcastle flights, which began on 20 April 1974, in its computer reservation system (CRS) as part of a combined marketing effort.
June 1974 saw the launch of BCal's non-stop Gatwick—Brussels scheduled route, the third European trunk route on which the airline operated scheduled services in competition with the incumbent flag carriers' established services from Heathrow.
1974 crisis year
The creation of British Airways (BA) as a result of the 1974 BEA-BOAC merger came against the background of the first global oil crisis in the wake of the 1973 Arab-Israeli War, which led to the quadrupling of the price of a barrel of oil as a consequence of the decision by the Organization of Petroleum Exporting Countries (OPEC) to boycott the West in retaliation for its support of Israel during that war. This meant that the newly merged corporation's original revenue and profit projections were far too optimistic. During that time, BA began exerting pressure on the Government, at the time its sole owner as well as the regulator for all UK airlines, to curtail the activities of its independent competitors generally and of the "Second Force" in particular.
The difficult operating environment at the time did not affect BA alone. In fact, the major scheduled airlines were all losing enormous amounts of money at the time. The sudden spike in the oil price caused a major recession during the second half of 1974 as well as the first half of 1975, with much reduced demand for air travel. This in turn led to the collapse of a number of prominent travel companies and their associated airlines — most notably the Court Line group and Horizon Holidays, the latter having provided work for three BCal short-haul aircraft prior to its collapse. There was also massive overcapacity on the North Atlantic routes.
These circumstances forced BCal to put in place a major programme of retrenchment, known internally as Plan "S" (from "survival") Plan "S" began to be implemented from 1 November 1974. It resulted in route cut-backs — including the suspension of the transatlantic "flagship" services, of which Flight International said the fuel crisis was a "heaven-sent excuse" to back out of a failure. the immediate withdrawal and subsequent disposal of the remaining VC10 long-haul aircraft, the grounding of a number of short-haul aircraft as well 827 redundancies out of the company's 5,673 staff. It also resulted in organisational changes that saw Adam Thomson become the airline's chief executive in addition to continuing in his role as chairman of a reconstituted board, and the transfer of all aircraft leasing, purchase and sale activities to a new subsidiary. British Caledonian Aircraft Trading was the name of the company that succeeded Caledonian Airways Equipment Holdings, Caledonian Airways (Leasing) and other related interests. It became one of the most profitable parts of the business.
In addition to withdrawing from the prestigious long-haul routes to New York and Los Angeles after only 18 months, other specific measures the airline took at the time to ensure its survival included dropping all scheduled flights to Belfast, Copenhagen, Gibraltar, Ibiza, Málaga, Palma de Mallorca and Tunis, indefinitely suspending scheduled services on the Glasgow—Southampton route as well as cutting the number of frequencies on the Gatwick—Glasgow and Gatwick—Edinburgh routes from six to four daily round trips. Two surplus aircraft were leased out to Air Malta and Austrian Airlines respectively for the duration of the 1975 summer timetable period. Another aircraft was stationed at West Berlin's Tegel Airport during the month of July of that year to fulfill a short-term charter contract to carry Turkish migrant workers to and from Istanbul on behalf of a local tour operator. BCal also decided to increase its 707 freighter fleet from one to four aircraft and to acquire a five-seater Piper Aztec to serve the rapidly growing executive charter market. These changes left BCal with 25 operational aircraft for the 1975 summer season. To reduce operating costs further, the airline decided to contract out its scheduled operations between Gatwick and Le Touquet to BIA. The reason for replacing BCal's One-Eleven 200 jet aircraft on this route with that airline's Herald turboprops at the beginning of the 1975 summer timetable period was the high price of jet fuel, which had made BCal's own jet aircraft operations uneconomic.
Even during this period of severe retrenchment, BCal continued launching scheduled services to new destinations. Dakar joined the airline's network on 1 November 1974, followed by Kinshasa on 1 April 1975.
As a result of the "success" of Plan "S", BCal's fortunes quickly recovered. The airline operation itself made a small profit of £250,000 during the financial year ended 30 September 1975 after having lost £4.3 million the year before.
Spheres of influence
The then Trade Secretary Peter Shore conducted a review of the Government's aviation policy and in 1976 announced a new "spheres of influence" policy that ended dual designation for British airlines on all long-haul routes. It was no longer believed that competition was increasing the UK market share of the traffic. As a result, BA and BCal were no longer permitted to run competing scheduled services on long-haul routes, and BCal had to withdraw from the East African routes inherited from BUA as well as from the London—New York and London—Los Angeles routes. BCal lost its licences to New York, Los Angeles, Boston and Toronto – routes it had stopped running in 1974. It gained Lusaka (Zambia) In return, BCal became the sole British flag carrier to the entire South American mainland by taking over the former BA routes to Colombia, Peru and Venezuela. The net losses of revenues was about equal for the two airlines.
From Wikipedia’s article on British Caledonian, shared under CC BY-SA 4.0.3