British Airways (BA) is the flag carrier airline of the United Kingdom, headquartered at Waterside, Harmondsworth,[3][4] near its main hub at London Heathrow Airport. It is the second largest airline in the United Kingdom, 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 $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).[5]
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 from Cardiff, and Northeast Airlines from Newcastle upon Tyne. On 31 March 1974, all four companies were merged to form British Airways. However, it is marking 2019 as its centenary based on predecessor companies.[6] 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. Its preeminence highlights the reach of the country's influence as many of its destinations in several regions were historically part of the British Empire.
It is a founding member of the Oneworld 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, after SkyTeam and Star Alliance.
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.[7]
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.[8] 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.[9]
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.[10]
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 London Heathrow to Bahrain.[11] 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.[9] 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.[12]
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.[13] The flag carrier was privatised and was floated on the London Stock Exchange in February 1987.[14] British Airways effected the takeover of the UK's "second" airline, British Caledonian, in July of that same year.[15]
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 damages to Virgin, £500,000 to Branson personally and £3 million legal costs.[16] Lord King stepped down as chairman in 1993 and was replaced by his deputy, Colin Marshall, while Bob Ayling took over as CEO.[17] 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.[16]
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).[17] 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.[15]
Bob Ayling's leadership led to a cost savings of £750m and the establishment of a budget airline, Go, in 1998.[18] The next year, however, British Airways reported an 84% drop in profits in its first quarter alone, its worst in seven years.[19] 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.[20] The plan fell through in September 2000.[21] 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.[22] Eddington would make further workforce cuts due to reduced demand following 11 September attacks in 2001,[12] and BA sold its stake in Qantas in September 2004.[23] In 2005 Willie Walsh, managing director of Aer Lingus and a former pilot, became the chief executive officer of British Airways.[24] 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
On 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.[26] The agreement was confirmed in April 2010,[27] and in July the European Commission and US Department of Transport permitted the merger and began to co-ordinate transatlantic routes with American Airlines.[28][29] 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.[30][31] 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.[27][32] 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%.[33] 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.[34]
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.[35] In November 2011 IAG announced an agreement in principle to purchase British Midland International from Lufthansa.[36] A contract to purchase the airline was agreed the next month,[37] and the sale was completed for £172.5 million on 30 March 2012.[38] The airline established a new subsidiary based at London City Airport operating Airbus A318s.[39]
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.[40]
On 27 May 2017, British Airways suffered a computer power failure. All flights were cancelled and thousands of passengers were affected.[41] By the following day, the company had not succeeded in reestablishing the normal function of their 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.[42] Willie Walsh later attributed the crash to an electrical engineer disconnecting the UPS and said there would be an independent investigation.[43]
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 their services in Iran, effective 22 September 2018.[44][45]
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 Boeing 747-400 G-BYGC which was repainted into a British Overseas Airways Corporation livery, which it will retain until retirement in 2023. Two more Boeing 747-400s are to be repainted with former British Airways liveries. One will wear the "Landor" livery, the other will wear the original "Union Jack" livery. An Airbus A319 is to be repainted into British European Airways livery.[46]
Corporate affairs
Operations
British Airways is the largest airline based in the United Kingdom in terms of fleet size, international flights, and international destinations and was, until 2008, the largest airline by passenger numbers. The airline carried 34.6 million passengers in 2008, but, rival carrier easyJet transported 44.5 million passengers that year, passing British Airways for the first time.[47][48] British Airways holds a United Kingdom Civil Aviation Authority Type A Operating Licence, it is permitted to carry passengers, cargo, and mail on aircraft with 20 or more seats.[49]
The airlines' head office, Waterside, stands in Harmondsworth, a village that is near London Heathrow Airport.[50] Waterside was completed in June 1998 to replace British Airways' previous head office, Speedbird House, which was located on the grounds of Heathrow.[51][52]
British Airways' main base is at Heathrow Airport, but it also has a major presence at Gatwick Airport. It also has a base at London City Airport, where its subsidiary BA Cityflyer is the largest operator. BA had previously operated a significant hub at Manchester Airport. Manchester to New York (JFK) services were withdrawn; later all international services outside London ceased when the subsidiary BA Connect was sold. Passengers wishing to travel internationally with BA either to or from regional UK destinations must now transfer in London.[53] Heathrow Airport is dominated by British Airways, which owns 40% of the slots available at the airport.[54] The majority of BA services operate from Terminal 5, with the exception of some flights at Terminal 3 owing to insufficient capacity at Terminal 5.
In August 2014, Willie Walsh advised the airline would continue to use flight paths over Iraq despite the hostilities there. A few days earlier Qantas announced it would avoid Iraqi airspace, while other airlines did likewise. The issue arose following the downing of Malaysia Airlines Flight 17 over Ukraine, and a temporary suspension of flights to and from Ben Gurion Airport during the 2014 Israel–Gaza conflict.[55]
Subsidiaries and shareholdings
BA CityFlyer, a wholly owned subsidiary, offers flights from its base at London City Airport to 23 destinations throughout Europe. It flies 17 Embraer E-170/E-190 aircraft and two leased Saab 2000.[56] The airline focuses on serving the financial market, though it has recently expanded into the leisure market, offering routes to Ibiza, Palma and Venice.[57]
In March 2015, Qatar Airways purchased a 10% stake in International Airlines Group, the parent of British Airways and Iberia, for €1.2 billion (US$1.26 billion).[58]
BEA Helicopters was renamed British Airways Helicopters in 1974 and operated passenger and offshore oil support services until it was sold in 1986.[59] Other former subsidiaries include the German airline Deutsche BA from 1997 until 2003 and the French airline Air Liberté from 1997 to 2001.[60][61] British Airways also owned Airways Aero Association, the operator of the British Airways flying club based at Wycombe Air Park in High Wycombe, until it was sold to Surinder Arora in 2007.[62]
South Africa's Comair and Denmark's Sun Air of Scandinavia have been franchisees of British Airways since 1996.[63][64] British Airways obtained a 15% stake in UK regional airline Flybe from the sale of BA Connect in March 2007.[65] It sold the stake in 2014. BA also owned a 10% stake in InterCapital and Regional Rail (ICRR), the company that managed the operations of Eurostar (UK) Ltd from 1998 to 2010,[66][67] when the management of Eurostar was restructured.
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").[68] The airline started operations in June 2008, and flew directly from Paris—Orly to Newark.[69] However it ceased operations on 2 September 2018 when it was replaced with Level flights on that route.[70]
British Airways Limited was established in 2012 to take over the operation of the premium service between London City Airport and New York-JFK. BA began the service in September 2009, using two Airbus A318s fitted with 32 lie-flat beds in an all business class cabin.[71][72] Flights operate under the numbers previously reserved for Concorde: BA001 – BA004.[73][74] The flights returned to be directly operated by British Airways plc in 2015.
British Airways provides cargo services under the British Airways World Cargo brand. The division has been part of IAG Cargo since 2012 and is the world's twelfth-largest cargo airline based on total freight tonne-kilometres flown.[75] BA World Cargo operates using the main BA fleet. Until the end of March 2014 they also operated three Boeing 747-8 freighter aircraft providing dedicated long-haul services under a wet lease arrangement from Global Supply Systems.[76] The division operates an automated cargo centre at London Heathrow Airport and handles freight at Gatwick and Stansted airports.
Industrial relations
Staff working for British Airways are represented by a number of trade unions, pilots are represented by British Air Line Pilots' Association, cabin crew by British Airlines Stewards and Stewardesses Association (a branch of Unite the Union), while other branches of Unite the Union and the GMB Union represent other employees. Bob Ayling's management faced strike action by cabin crew over a £1 billion cost-cutting drive to return BA to profitability in 1997; this was the last time BA cabin crew would strike until 2009, although staff morale has reportedly been unstable since that incident.[85] In an effort to increase interaction between management, employees, and the unions, various conferences and workshops have taken place, often with thousands in attendance.[86]
In 2005, wildcat action was taken by union members over a decision by Gate Gourmet not to renew the contracts of 670 workers and replace them with agency staff; it is estimated that the strike cost British Airways £30 million and caused disruption to 100,000 passengers.[87] In October 2006, BA became involved in a civil rights dispute when a Christian employee was forbidden to wear a necklace bearing the cross, a religious symbol.[88] BA's practice of forbidding such symbols has been publicly questioned by British politicians such as the former Home Secretary John Reid and the former Foreign Secretary Jack Straw.[89][90]
Relations have been turbulent between BA and Unite. In 2007, cabin crew threatened strike action over salary changes to be imposed by BA management. The strike was called off at the last minute, British Airways losing £80 million.[85] In December 2009, a ballot for strike action over Christmas received a high level of support,[91] action was blocked by a court injunction that deemed the ballot illegal. Negotiations failed to stop strike action in March, BA withdrew perks for strike participants.[92] Allegations were made by the Guardian newspaper that BA had consulted outside firms methods to undermine the unions, the story was later withdrawn.[93] A strike was announced for May 2010, British Airways again sought an injunction. Members of the Socialist Workers Party disrupted negotiations between BA management and Unite to prevent industrial action.[94] Further disruption struck when Derek Simpson, a Unite co-leader, was discovered to have leaked details of confidential negotiations online via Twitter.[95] Industrial action re-emerged in 2017, this time by BA's Mixed Fleet flight attendants, whom were employed on much less favorable pay and terms and conditions compared to previous cabin staff who joined prior to 2010. A ballot for industrial action was distributed to Mixed Fleet crew in November 2016[96] and resulted in an overwhelming yes majority for industrial action.[97] Unite described Mixed Fleet crew as on "poverty pay", with many Mixed Fleet flight attendants sleeping in their cars in between shifts because they cannot afford the fuel to drive home, or operating while sick as they cannot afford to call in sick and lose their pay for the shift. Unite also blasted BA of removing staff travel concessions, bonus payments and other benefits to all cabin crew who undertook industrial action, as well as strike-breaking tactics such as wet-leasing aircraft from other airlines and offering financial incentives for cabin crew not to strike.[98][99] The first dates of strikes during Christmas 2016 were cancelled due to pay negotiations.[100] Industrial action by Mixed Fleet commenced in January 2017 after rejecting a pay offer.[101] Strike action continued throughout 2017 in numerous discontinuous periods, resulting in one of the longest running disputes in aviation history.[102][103][104][105][106] On 31 October 2017, after 85 days of discontinuous industrial action, Mixed Fleet accepted a new pay deal from BA which ended the dispute.[107]
Destinations
