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British Airways

British Airways

Summary

British Airways PLC, British air transport company formed in April 1974 in the fusion of British Overseas Airways Corporation (BOAC, formed in 1939), British European Airways (BEA, formed in 1946), and their associated companies. The company, state-owned from its inception, was privatized in 1987. Its major subsidiaries include BA CityFlyer, which serves destinations in the United Kingdom and continental Europe, and OpenSkies, which flies between Paris and New York City. Headquarters are at Harmondsworth in the London borough of Hillingdon, near Heathrow Airport.

The airline’s history began on March 31, 1924, when, with the award of government subsidies, four small postwar companies (Handley Page Transport Ltd., Instone Air Line Ltd., Daimler Airway, and British Marine Air Navigation Co.) merged to form Imperial Airways Ltd., one of the pioneers of intercontinental air routes. Inheriting 1,760 miles (2,830 km) of British and cross-Channel routes, Imperial Airways spanned Europe and Asia as far as India, Malaya, Hong Kong, and Australia and linked imperial territories in Africa as far as South Africa.

Meanwhile, three other airlines (Hillman’s Airways Ltd., Spartan Air Lines Ltd., and United Airways Ltd.) had merged in 1936 to form British Airways, to handle domestic and northern European flights. In November 1938, following parliamentary investigations of alleged inefficiencies, the government decided to merge and nationalize Imperial Airways and British Airways. The result was the British Overseas Airways Corporation (BOAC), formally established in 1939. In 1946 British European Airways (BEA), formerly a division of BOAC, was split off to become a government corporation in its own right, responsible primarily for British air services in the British Isles and continental Europe.

On May 2, 1952, BOAC introduced the world’s first jet passenger service (from London to Johannesburg) with the de Havilland Comet 1. On October 4, 1958, it began operating the world’s first transatlantic jet service (between London and New York City).

Following recommendations of a special committee, Parliament enacted the Civil Aviation Act of 1971, which led in 1974 to the formal dissolution of BOAC and BEA and the vesting of their assets and liabilities in the new British Airways. One of its first achievements was the inauguration, jointly with Air France, of the world’s first scheduled supersonic passenger service on January 21, 1976, using the Concorde; the British flew initially from London to Bahrain and in 1977 to New York City, the French from Paris to Rio de Janeiro. Financial losses, however, led British Airways to cease its Concorde operations in October 2003, several months after Air France had ended its supersonic service.

In early 1987 the British government sold off British Airways to the public by means of a huge stock offering. Later that year the newly privatized company acquired its smaller British rival, British Caledonian Airways, which had routes between Britain and the United States. At the start of the 21st century, British Airways remained one of the largest air carriers in the world.

In 2007 British Airways was fined $300 million by the U.S. Department of Justice for price-fixing. In the same year, British Airways launched BA CityFlyer and purchased the French airline L’Avion, which was renamed OpenSkies. In subsequent years the company continued to pursue mergers with other airlines, most notably Iberia. In 2011 it officially merged with the Spanish airline to form the holding company International Airlines Group. Each airline, however, continued to operate under its own name.

Details

British Airways (BA) is the flag carrier airline of the United Kingdom. It is headquartered in London, England, near its main hub at Heathrow Airport.

The airline is the second largest UK-based carrier, based on fleet size and passengers carried, behind easyJet. In January 2011 BA merged with Iberia, creating the International Airlines Group (IAG), a holding company registered in Madrid, Spain. IAG is the world's third-largest airline group in terms of annual revenue and the second-largest in Europe. It is listed on the London Stock Exchange and in the FTSE 100 Index. British Airways is the first passenger airline to have generated more than US$1 billion on a single air route in a year (from 1 April 2017, to 31 March 2018, on the New York-JFK - London-Heathrow route).

BA was created in 1974 after a British Airways Board was established by the British government to manage the two nationalised airline corporations, British Overseas Airways Corporation and British European Airways, and two regional airlines, Cambrian Airways and Northeast Airlines. On 31 March 1974, all four companies were merged to form British Airways. However, it marked 2019 as its centenary based on predecessor companies. After almost 13 years as a state company, BA was privatised in February 1987 as part of a wider privatisation plan by the Conservative government. The carrier expanded with the acquisition of British Caledonian in 1987, Dan-Air in 1992, and British Midland International in 2012.

It is a founding member of the Oneworld airline alliance, along with American Airlines, the now-defunct Canadian Airlines, Cathay Pacific, and Qantas. The alliance has since grown to become the third-largest, after SkyTeam and Star Alliance.

History

Proposals to establish a joint British airline, combining the assets of the British Overseas Airways Corporation (BOAC) and British European Airways (BEA), were first raised in 1953 as a result of difficulties in attempts by BOAC and BEA to negotiate air rights through the British colony of Cyprus. Increasingly BOAC was protesting that BEA was using its subsidiary Cyprus Airways to circumvent an agreement that BEA would not fly routes further east than Cyprus, particularly to the increasingly important oil regions in the Middle East. The chairman of BOAC, Miles Thomas, was in favour of a merger as a potential solution to this disagreement and had backing for the idea from the Chancellor of the Exchequer at the time, Rab Butler. However, opposition from the Treasury blocked the proposal.

Consequently, it was only following the recommendations of the 1969 Edwards Report that a new British Airways Board, managing both BEA and BOAC, and the two regional British airlines Cambrian Airways based at Cardiff, and Northeast Airlines based at Newcastle upon Tyne, was constituted on 1 April 1972. Although each airline's branding was maintained initially, two years later the British Airways Board unified its branding, effectively establishing British Airways as an airline on 31 March 1974.

Following two years of fierce competition with British Caledonian, the second-largest airline in the United Kingdom at the time, the Government changed its aviation policy in 1976 so that the two carriers would no longer compete on long-haul routes.

British Airways and Air France operated the supersonic airliner Aerospatiale-BAC Concorde, and the world's first supersonic passenger service flew in January 1976 from Heathrow Airport to Bahrain International Airport. Services to the US began on 24 May 1976 with a flight to Washington Dulles airport, and flights to New York JFK airport followed on 22 September 1977. Service to Singapore was established in co-operation with Singapore Airlines as a continuation of the flight to Bahrain. Following the Air France Concorde crash in Paris and a slump in air travel following the 11 September attacks in New York in 2001, it was decided to cease Concorde operations in 2003 after 27 years of service. The final commercial Concorde flight was BA002 from New York-JFK to London-Heathrow on 24 October 2003.

A British Airways Hawker Siddeley Trident in its transitional scheme with BEA livery but with British Airways titles.
In 1981 the airline was instructed to prepare for privatisation by the Conservative Thatcher government. Sir John King, later Lord King, was appointed chairman, charged with bringing the airline back into profitability. While many other large airlines struggled, King was credited with transforming British Airways into one of the most profitable air carriers in the world. The flag carrier was privatised and was floated on the London Stock Exchange in February 1987. British Airways effected the takeover of the UK's "second" airline, British Caledonian, in July of that same year.

The formation of Richard Branson's Virgin Atlantic in 1984 created a competitor for BA. The intense rivalry between British Airways and Virgin Atlantic culminated in the former being sued for libel in 1993, arising from claims and counterclaims over a "dirty tricks" campaign against Virgin. This campaign included allegations of poaching Virgin Atlantic customers, tampering with private files belonging to Virgin, and undermining Virgin's reputation in the city. As a result of the case BA management apologised "unreservedly", and the company agreed to pay £110,000 in damages to Virgin, £500,000 to Branson personally and £3 million legal costs. Lord King stepped down as chairman in 1993 and was replaced by his deputy, Colin Marshall, while Bob Ayling took over as CEO. Virgin filed a separate action in the US that same year regarding BA's domination of the trans-Atlantic routes, but it was thrown out in 1999.

In 1992 British Airways expanded through the acquisition of the financially troubled Dan-Air, giving BA a much larger presence at Gatwick Airport. British Asia Airways, a subsidiary based in Taiwan, was formed in March 1993 to operate between London and Taipei. That same month BA purchased a 25% stake in the Australian airline Qantas and, with the acquisition of Brymon Airways in May, formed British Airways Citiexpress (later BA Connect). In September 1998, British Airways, along with American Airlines, Cathay Pacific, Qantas, and Canadian Airlines, formed the Oneworld airline alliance. Oneworld began operations on 1 February 1999, and is the third-largest airline alliance in the world, behind SkyTeam and Star Alliance.

Bob Ayling's leadership led to a cost savings of £750m and the establishment of a budget airline, Go, in 1998. The next year, however, British Airways reported an 84% drop in profits in its first quarter alone, its worst in seven years. In March 2000, Ayling was removed from his position and British Airways announced Rod Eddington as his successor. That year, British Airways and KLM conducted talks on a potential merger, reaching a decision in July to file an official merger plan with the European Commission. The plan fell through in September 2000. British Asia Airways ceased operations in 2001 after BA suspended flights to Taipei. Go was sold to its management and the private equity firm 3i in June 2001. Eddington would make further workforce cuts due to reduced demand following 11 September attacks in 2001, and BA sold its stake in Qantas in September 2004. In 2005 Willie Walsh, managing director of Aer Lingus and a former pilot, became the chief executive officer of British Airways. BA unveiled its new subsidiary OpenSkies in January 2008, taking advantage of the liberalisation of transatlantic traffic rights between Europe and the United States. OpenSkies flies non-stop from Paris to New York's JFK and Newark airports.

In July 2008, British Airways announced a merger plan with Iberia, another flag carrier airline in the Oneworld alliance, wherein each airline would retain its original brand. The agreement was confirmed in April 2010, and in July the European Commission and US Department of Transport permitted the merger and began to co-ordinate transatlantic routes with American Airlines. On 6 October 2010 the alliance between British Airways, American Airlines and Iberia formally began operations. The alliance generates an estimated £230 million in annual cost-saving for BA, in addition to the £330 million which would be saved by the merger with Iberia.[32] This merger was finalised on 21 January 2011, resulting in the International Airlines Group (IAG), the world's third-largest airline in terms of annual revenue and the second-largest airline group in Europe. Prior to merging, British Airways owned a 13.5% stake in Iberia, and thus received ownership of 55% of the combined International Airlines Group; Iberia's other shareholders received the remaining 45%. As a part of the merger, British Airways ceased trading independently on the London Stock Exchange after 23 years as a constituent of the FTSE 100 Index.

In September 2010 Willie Walsh, now CEO of IAG, announced that the group was considering acquiring other airlines and had drawn up a shortlist of twelve possible acquisitions. In November 2011 IAG announced an agreement in principle to purchase British Midland International from Lufthansa. A contract to purchase the airline was agreed the next month,[38] and the sale was completed for £172.5 million on 30 March 2012. The airline established a new subsidiary based at London City Airport operating Airbus A318s.

British Airways and Iberia merged in January 2011, forming International Airlines Group, one of the world's largest airlines.

British Airways was the official airline partner of the London 2012 Olympic Games. On 18 May 2012 it flew the Olympic flame from Athens International Airport to RNAS Culdrose while carrying various dignitaries, including Lord Sebastian Coe, Princess Anne, the Olympics minister Hugh Robertson and the London Mayor Boris Johnson, along with the footballer David Beckham.

On 27 May 2017, British Airways suffered a computer power failure. All flights were cancelled and thousands of passengers were affected. By the following day, the company had not succeeded in reestablishing the normal function of its computer systems. When asked by reporters for more information on the ongoing problems, British Airways stated "The root cause was a power supply issue which our affected our IT systems - we continue to investigate this" and declined to comment further. Willie Walsh later attributed the crash to an electrical engineer disconnecting the UPS and said there would be an independent investigation.

Amidst the decline in the value of Iranian currency due to the reintroduction of US sanctions on Iran, BA announced that the Iranian route is "not commercially viable". As a result, BA decided to stop its services in Iran, effective 22 September 2018.

In 2018, British Airways partnered with British tailor and designer Ozwald Boateng to redesign the company's historic uniforms, in honour of its approaching centenary, creating a new look for BA, while adhering to its traditional style. The new collection "A British Original" was launched in 2023. This design initiative also included English bone china manufactured by William Edwards and cutlery by Studio William for the company's first class service.

In 2019, as part of the celebrations of a centenary of airline operations in the United Kingdom, British Airways announced that four aircraft would receive retro liveries. The first of these is a Boeing 747-400 (G-BYGC), which was repainted into the former BOAC livery, which it retained until its retirement. Two more Boeing 747-400s were repainted with former British Airways liveries. One wore the "Landor" livery until its retirement in 2020 (G-BNLY), the other (G-CIVB), wore the original "Union Jack" livery until its retirement in 2020 also. An Airbus A319 was repainted into British European Airways livery, which is still flying as G-EUPJ.

On 28 April 2020, the company set out plans to make up to 12,000 staff redundant because of the global collapse of air traffic due to the COVID-19 pandemic and that it may not reopen its operations at Gatwick airport. In July 2020, British Airways announced the immediate retirement of its entire 747-400 fleet, having originally intended to phase out the remaining 747s in 2024. The airline stated that its decision to bring forward the date was in part due to the downturn in air travel following the COVID-19 pandemic and to focus on incorporating more modern and fuel-efficient aircraft such as the Airbus A350 and Boeing 787. At the same time, British Airways also announced its intention to eliminate carbon emissions by 2050. On 28 July 2020, the company's cabin crew union issued an "industrial action" warning in order to prevent the 12,000 job cuts and pay cuts.

On 12 October 2020, it was announced that Sean Doyle, CEO of Aer Lingus (also part of the IAG airline group) would succeed Álex Cruz as CEO.

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