Court Line Aviation

5 x Handley Page Dart Herald 2 leased

2 x Hawker Siddeley HS 748

6 x Vickers Viking 1 never operated

Court Line

1 x BAC One-Eleven 400

15 x BAC One-Eleven 500

2 x Lockheed L-1011 TriStar 1

Fleet and employee data

1970

Court Line employed 670 people at that time (as of March 1970).

1974

Court Line employed 1,150 people at that time (as of March 1974).

In addition to Court Line/Clarksons, Great Universal Stores (GUS) subsidiary Global was a major proponent of "seat-back" catering among the UK's leading contemporary tour operators. It demanded that package holiday costs be driven down to the bare minimum by replacing the traditional meal service on holiday charter flights with something much cheaper that would simply give passengers "a slice of pie". Industry insiders referred to Global's new inflight catering concept as Global Pie. The cost advantage industry leaders such as Court Line/Clarksons and Global gained over their rivals as a result of their onboard catering innovation eventually forced every other major UK charter airline to adopt "seat-back" catering on most flights serving short- and medium-haul IT destinations.

Widebody era

In 1973, Court Line took delivery of a pair of Lockheed L-1011 TriStars and became the first European airline to operate the Lockheed widebody. The aircraft were acquired on long-term lease from Airlease International, a consortium of eleven British banks and financial institutions. They were uniquely customised for Court with double-width doors to speed up passenger evacuation and featured integral passenger stairs and baggage conveyors to facilitate operations at smaller airports. The introduction of these brand-new widebodies was a big gamble for a small airline operating in a seasonal market with tight margins as the new jets had four times the One-Eleven's passenger capacity (476 vs 119).

Court took the view with Clarksons that the market would grow and that such large aircraft could be operated profitably. In addition, Clarksons was looking to expand further into cruise holidays and new markets in the US and the Caribbean. This, at the time, was wholly new territory for the UK package tour market.

The acquisition of Leeward Islands Air Transport (LIAT), a regional airline based in the Caribbean, in 1972 was part of Court's long-haul expansion strategy. Court Line provided LIAT with BAC One-Eleven series 500 aircraft for scheduled passenger services in the Caribbean. The BAC One-Eleven was the only jet aircraft type ever operated by LIAT.

The introduction of the TriStar led to an increase in maintenance personnel and the modification of an existing hangar at the airline's Luton base to accommodate the new widebody. It also resulted in the purchase of a former Royal Air Force Blackburn Beverley cargo transporter from the Royal Aircraft Establishment to airlift Rolls-Royce RB211 replacement engines and/or other essential spares in case the planes developed a serious technical fault at an overseas station that prevented them from returning to Luton (although in fact the Beverley was never civil registered and so was never used).

The airline's total investment in widebodied equipment amounted to US$55 million.

Hard times

As early as 1971, Clarksons lost as much as £2.6 million despite increasing its turnover by £9 million to £31 million. Industry sources estimated that this equated to a loss of £4 per head.

In 1972, Clarksons's loss grew to £4.8 million. This was almost 2½ times as much as the combined loss of Thomson Holidays (£1.6 million) and Horizon Holidays (£388,000), its closest rivals.

By 1973, Clarksons carried over a million passengers and accounted for 40% of Court Line's turnover.

During the 1973–74 winter season, Clarksons's plight worsened. At the time, the UK was in the grip of a recession, as a result of the early 1970s energy crisis caused by the Organization of Petroleum Exporting Countries' oil boycott of the West in the aftermath of the 1973 Arab–Israeli War. This was a punitive measure directed against these countries for their support of Israel during that war. It led to a drastic reduction in the availability of petroleum products – including jet fuel. This in turn resulted in a tripling of the oil price in October 1973 and a subsequent quadrupling.

1974 became known as the worst year for the UK package tour industry. At the beginning of the year, Britain plunged into the three-day working week, as a consequence of the miners' strike that had been called to topple the Heath Government. This immediately reduced package holiday bookings by 30%. Clarksons, Court Line's main customer and in-house tour operator since April 1973, was facing mounting financial pressure, and Vladimir Raitz's Horizon Holidays, another of the airline's major customers, collapsed during that time. Following Court Line's takeover of Clarksons the previous year for a nominal £1 (excluding a £3.4 million "subsidy" from the airline's parent company to cover the tour operator's projected 1973 loss), it purchased the Horizon group's goodwill for £600,000—including the acquisition of 58% of Horizon Midlands for £400,000—from the administrator. The deal, which became effective in February 1974, was based on payment of £1 for each Horizon customer Court Line expected to carry over the following three years. The airline's decision to purchase Clarksons as well as Horizon was intended to protect its business. In reality, these deals did little to help improve Court Line's increasingly bleak prospects.

As soon as Court Line began diverting Horizon customers onto its planes, British Caledonian (BCal) threatened having Horizon compulsorily wound up if Court Line did not agree to settle Horizon's outstanding debts of over £100,000. BCal's threat forced Court Line to sub-charter a fully crewed BCal One-Eleven jet for Horizon's flying programme and to provide it with additional business. In addition to BCal forcing Court Line to compensate it for the loss of Horizon's business, Thomas Cook's money-back guarantee – a scheme widely copied by other rival tour operators – further reduced the number of Horizon holidaymakers travelling on Court Line's jets. As a result, Court Line carried far fewer Horizon customers than it had anticipated. Clarksons's financial position further deteriorated. In a desperate attempt to fill the group's planes and hotel rooms so that it could stay afloat, Clarksons continued selling holiday packages below cost, with a fortnight all-inclusive holiday to Mallorca selling for as little as £50.

Bankruptcy

A deal between the Court Line group and the Wilson Government to sell the former's shipyards at Appledore and Sunderland to the latter for £60 million turned out to be "too little too late" to stave off the company's impending collapse.

On 15 August 1974, Court Line went bankrupt, with all flights cancelled, its fleet comprising two TriStars and nine One-Eleven 500s grounded, all 1,150 staff losing their jobs and as many as 49,000 holidaymakers stranded overseas with no means of getting home. To enable stranded holidaymakers to return to the UK at no additional cost to them, the collapsed group's rivals organised an airlift through the Tour Operators' Study Group (TOSG), the package holiday industry association. This operation was paid for using the £3.5m bond the failed group's tour operators had deposited with TOSG.

The Association of British Travel Agents (ABTA) set up a fund to provide an insurance against such an event in the future. This was a compulsory bonding scheme for travel companies that transported their customers by air. It was administered by TOSG.

On 16 August 1974, all of the group's UK-based subsidiaries went into voluntary liquidation. This included Court Line Aviation and Clarksons Holidays.

Leeward Islands Air Transport (LIAT) in the Caribbean as well as South Africa-based Court Line Helicopters were among Court Line's overseas subsidiaries. Both survived the UK parent company's collapse. LIAT subsequently withdrew the BAC One-Eleven series 500 aircraft from its fleet which had been provided by Court Line.

The Court Line Coaches subsidiary, although itself solvent and having most of its work from sources other than Court Line Aviation, was wound up shortly afterwards. Commercial Motor of 23 August 1974 noted that "Court Line's coach fleet continues operations 'for the present'. A go ahead to stay in operation has been given to Court Line Coaches Ltd by Mr Rupert Nicholson, who has been appointed to wind up the Court Line holiday giant which collapsed last week. Court Line Coaches has a fleet of 59 coaches and its managing director Mr Ron Keech told CM on Tuesday that the company has been told it could continue trading. He had however, "no idea" what might happen in a few months' time."

Factors behind collapse

Besides the early-'70s oil crisis and the three-day week, other factors also contributed to the collapse of the group of companies that included Court Line and Clarksons.

One factors was the parent company's precariously highly geared investment in the shipping and leisure industry sectors.

According to some insider reports at the time, Court Line Aviation was a viable business. However, a proposed management buyout was rejected as its liquidation value was needed to pay off the parent company's debts.

The Department of Trade and Industry final report into the Court Line collapse concludes:

"The short answer is that there was no single reason for the collapse, which was caused by a number of contributory factors. Court Line expanded rapidly in many directions, some of which were both logical and justifiable, others not. The overall management was throughout inadequate and it was in any event never supported by the necessary financial control. This meant that as Court Line expanded, it became progressively vulnerable to any substantial setback in any of its areas of activities. When a serious setback occurred, triggered off by the oil crisis of autumn 1973, it immediately affected the shipping, aviation, and leisure divisions. The group was so highly geared, so structured and having such inadequate financial control, that it might well have been brought down by a substantial reverse in any of its major activities. As it was the cumulative effect on all three divisions, when all the cash resources which would otherwise have been available had been invested unprofitably in the Caribbean, meant that the position progressively deteriorated and rendered the collapse in August 1974 unavoidable.

Disposal of airline's assets

Following the spectacular crash of Court Line and Clarksons at the height of the 1974 holiday season, the failed carrier's fairly new aircraft were acquired by other airlines. Cathay Pacific took the two L-1011 TriStar widebodies while Dan-Air and Monarch Airlines respectively purchased four and two of the One-Eleven 500 narrowbodies. These aircraft needed to be re-registered to avoid having them impounded by overseas airport authorities in lieu of the airport user charges Court Line owed them.

Accidents and incidents

Autair suffered two accidents, one of which involved the loss of lives.

The first of these occurred on 14 September 1967. One of the airline's Ambassadors (registration: G-ALZS) overran the runway at Luton Airport at the end of a non-scheduled passenger flight from Luxembourg. The aircraft had approached Luton in darkness. Visibility was 5,900 ft (1,800 m) and the cloud base 300 ft (91 m). Following touchdown, the pilot in command retracted the aircraft's flaps in the takeoff position and applied brakes intermittently. The aircraft overran the runway and came to a stop in soft clay. This caused the undercarriage to collapse. The aircraft was damaged beyond repair and had to be written off. However, there were no fatalities among the 69 occupants (four crew and 65 passengers).

The second took place on 23 December 1967. A Hawker Siddeley HS 125 (registration: G-AVGW, owned by The Beecham Group and operated by Autair International) crashed shortly after taking off from Luton Airport, killing both pilots. The aircraft had been on a training flight and the crash occurred when the crew simulated an engine failure on takeoff. The HS 125 lost height rapidly and hit the roof of a nearby factory, resulting in a post-crash fire.

On 18 April 1974, BAC One-Eleven G-AXMJ was involved in a ground collision with Piper PA-23 Aztec G-AYDE during take-off from Luton Airport, Bedfordshire. The Aztec had entered the active runway without permission. The pilot of the Aztec was killed and his passenger was injured. The One-Eleven aborted its take-off and an emergency evacuation was performed with all 93 people on board escaping uninjured. The Aztec was written off and the substantially damaged One-Eleven was repaired and returned to service.

A Court Line BAC One-Eleven leased to Cyprus Airways was stranded in 1974 at Nicosia Airport following the Turkish invasion of Cyprus. It was retrieved by British Airways engineers in 1977, but was immediately impounded on its arrival in Britain by Court Line's insurers to help pay off the debts the now defunct company owed. The aircraft was returned to Cyprus Airways in 1978 and remained in service until 1985.