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British Airways

British Airways (BA) is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. It is the largest airline in the UK based on fleet size, international flights and international destinations and second-largest measured by passengers carried, behind easyJet.

The British Airways Group was established in 1972 to control the two nationalised airline corporations, BOAC and BEA, and two smaller, 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. After almost 13 years as a state company, British Airways was privatised in February 1987 as part of a wider privatisation plan by the Conservative Government. The carrier soon expanded with the acquisition of British Caledonian in 1987 and Dan-Air, based in Gatwick, in 1992.

A long-time Boeing customer, British Airways ordered 59 Airbus A320 family aircraft in August 1998. In 2007, it purchased 12 Airbus A380s and 24 Boeing 787 Dreamliners, marking the start of its long-haul fleet replacement. The centrepiece of the airline's long-haul fleet is the Boeing 747-400; with 55 examples in the fleet, British Airways is the largest operator of this type in the world.

British Airways 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. British Airways merged with Iberia on 21 January 2011, formally creating the International Airlines Group (IAG), the world's third-largest airline group in terms of annual revenue and the second-largest in Europe. IAG is listed on the London Stock Exchange and in the FTSE 100 Index. In 2012, IAG purchased British Midland International (BMI) and established a new subsidiary based at London City Airport operating Airbus A318s.

History

On 1 September 1972, the boards of the British Overseas Airways Corporation (BOAC) and British European Airways (BEA) were combined under the newly formed British Airways Group. British Airways was established as an airline on 31 March 1974 by the dissolution of BOAC and BEA. Following two years of fierce competition with British Caledonian, the second-largest airline in Britain 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; the world's first supersonic passenger service first flew in January 1976 from London Heathrow to Bahrain. Services to the US were inaugurated to Washington Dulles airport on 24 May 1976; flights to New York JFK airport started on 22 September 1977. A service to Singapore was also operated 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.

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. King was credited with transforming the loss-making giant into one of the most profitable air carriers in the world, while many other large airlines struggled. The flag carrier was privatised and was floated on the London Stock Exchange in February 1987. In July 1987, British Airways effected the takeover of Britain's "second" airline, British Caledonian.

The formation of Richard Branson's Virgin Atlantic Airways in 1984 created a competitor for BA. In 1993, the intense rivalry between British Airways and Virgin Atlantic culminated in the former being sued for libel arising from claims and counter claims over a "dirty tricks" campaign by BA against Virgin. British Airways' campaign against Virgin included poaching Virgin Atlantic customers, tampering with private files belonging to Virgin and undermining Virgin's reputation in the City. Following a libel case, British Airways agreed to pay £110,000 damages to Virgin (and £500,000 to Branson) and £3 million legal costs causing BA management to apologise "unreservedly" for the alleged "dirty tricks" campaign. An action filed in the US in 1993 by Virgin against BA over domination of the trans-Atlantic routes was thrown out in 1999. Six months after the "dirty tricks" campaign, Lord King stepped down as chairman in 1993 and was replaced by his deputy, Colin Marshall, while Bob Ayling took over as CEO.

In 1992, British Airways expanded through the acquisition of the financially troubled Dan-Air, giving BA a much larger presence at Gatwick airport. In March 1993, British Asia Airways, a subsidiary based in Taiwan, was formed to operate between London and Taipei. Additionally in 1993, BA purchased a 25% stake in the Australian airline Qantas in March, and acquired Brymon Airways in May to form 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 smallest airline alliance in the world, behind SkyTeam and Star Alliance.

Benefits under Bob Ayling's leadership included cost savings of £750m and the establishment of a budget airline, Go, in 1998. However, one year on, in 1999, British Airways reported an 84% drop in profits, its worst for seven years. In 2000 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 that year. In March 2000, Ayling was removed from his position and British Airways announced Rod Eddington as his successor; Eddington would make further workforce cuts due to reduced demand following the 11 September attacks in 2001. 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. BA sold its stake in Qantas in September 2004.

In September 2005, Willie Walsh, Managing Director of Aer Lingus and a former pilot, became the Chief Executive Officer of British Airways. In January 2008, BA unveiled its new subsidiary OpenSkies, which takes 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.

n 30 July 2008, British Airways and Iberia, a Spanish fellow Oneworld partner, announced a merger plan; the two airlines would retain their original brands, similar to KLM and Air France in their merger agreement. An agreement to merge was confirmed in April 2010. In July 2010, the European Commission and US Department of Transport permitted the merger and 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 annual cost-saving for BA, in addition to £330 million by the Iberia merge.

British Airways ceased trading on the London Stock Exchange on 21 January 2011, after 23 years as a constituent of the FTSE 100 index. On 21 January 2011, British Airways and Iberia merged, resulting in 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, thus it received ownership of 55% of the combined International Airlines Group, Iberia's other shareholders received the remaining 45%.

In September 2010, Willie Walsh, the CEO of IAG, announced that IAG was considering acquiring other airlines, and that a shortlist of twelve possible acquisitions existed. In early November 2011, IAG announced an agreement in principle to purchase British Midland International from Lufthansa. A contract to purchase the airline was agreed on 22 December 2011, and the sale was completed for £172.5 million on 30 March 2012.

British Airways was the 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, together with the footballer David Beckham.

Corporate affairs

Overview

British Airways has its head office, Waterside, in Harmondsworth, a village near Heathrow airport. Waterside was completed in June 1998 to replace British Airways' previous head office, Speedbird House, which was on the grounds of London Heathrow Airport.

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 as well. The airline carried 34.6 million passengers in 2008 but easyJet, a rival, low-cost carrier carried 44.5 million passengers that year, passing British Airways for the first time. 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.

British Airways' main base is at London Heathrow Airport in west London, England, but it also has a major presence at Gatwick Airport. It also has a base at London City Airport (LCY), with a major presence from its subsidiary BA CityFlyer, which is the largest operator from LCY. BA had previously operated a significant hub at Manchester Airport. Manchester operations, and international services outside of London, ceased when a subsidiary, BA Connect, was sold due to a lack of profitability. Passengers wishing to travel internationally with BA either to or from regional UK destinations must now transfer in London. Heathrow airport is dominated by British Airways, due to its ownership of 40% of the slots available at the airport. The majority of BA services operate from Terminal 5, with the exception of some short-haul flights at Terminal 1 and some long-haul flights at Terminal 3.

British Airways serves nearly 150 destinations, including six domestic. It is one of only ten carriers to fly to all six permanently inhabited continents.

Subsidiaries and shareholdings

BA CityFlyer is a wholly owned subsidiary based at London City Airport, from where it operates to 23 destinations throughout Europe. It flies 14 Embraer 170/190 aircraft and one leased Saab 2000. The airline mostly focuses on the financial market, and has recently expanded into the leisure market, having started routes to Ibiza, Palma and Venice. The onboard product is identical to that of the BA Short Haul product from both LHR and LGW.

The former BEA Helicopters was renamed British Airways Helicopters in 1974 and operated passenger and offshore oil support services until it was sold in 1986. Other former subsidiaries include the German airline Deutsche BA from 1997 until 2003 and the French airline Air Liberté from 1997 to 2001. 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 November 2007.

South Africa's Comair and Denmark's Sun Air of Scandinavia have been franchisees of British Airways since 1996. British Airways obtained a 15% stake in UK regional airline Flybe from the sale of BA Connect in March 2007; 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, 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"). The airline started operations in June 2008, and now flies direct from Paris to New York's JFK and Newark airports.

British Airways Limited was established in 2012 to take over the operation of the premium service operated between London City Airport and New York-JFK. BA began the service in September 2009, which uses two Airbus A318s fitted with 32 lie-flat beds in an all business class cabin. Flights operate under the numbers previously reserved for Concorde, BA001, BA002, BA003, and BA004.

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. BA World Cargo operates using the main BA fleet, together with three Boeing 747-8 freighter aircraft providing dedicated long-haul services operating under a wet lease arrangement from Global Supply Systems. 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 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. In an effort to increase interaction between management, employees, and the unions, various conferences and workshops have taken place, often with thousands in attendance.

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. In October 2006, BA became involved in a civil rights dispute when a Christian employee was forbidden to wear a necklace baring the cross, a religious symbol. 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.

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. In December 2009, a ballot for strike action over Christmas received a high level of support, 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. Allegations were made by the Guardian newspaper that BA had consulted outside firms methods to undermine the unions, the story was later withdrawn. 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. Further disruption struck when Derek Simpson, a Unite co-leader, was discovered to have leaked details of confidential negotiations online via Twitter.

Destinations

British Airways is one of the few airlines that fly to all six inhabited continents, along with Delta Air Lines, Emirates, Etihad Airways, Korean Air , Qantas, Qatar Airways, Singapore Airlines, South African Airways and United Airlines.

Fleet

With the exception of the Boeing 707 and early Boeing 747 variants from BOAC, the airline as formed in 1972–4 inherited a mainly UK-built fleet of aircraft. The airline introduced the Boeing 737 and Boeing 757 into the fleet in the 1980s, followed by the Boeing 747-400 (British Airways is the largest operator with 55), Boeing 767 and Boeing 777 in the 1990s. Boeing-built aircraft for British Airways are allocated the customer code 36, which appears in their aircraft designation as a suffix, such as 737-436, 747-436 and 777-236.

Although British Airways utilises a large Boeing fleet, it has always operated aircraft from other manufacturers. British built aircraft were transferred from BEA (e.g. Trident) and BOAC (e.g. VC10), and in the 1980s the airline operated the Lockheed L-1011 TriStar. It also operated the DC-10 and Airbus A320-100 through the acquisition of British Caledonian Airways in the 1980s. In August 1998, British Airways placed its first direct Airbus order, for 59 A320/A319s, to replace its own ageing fleet of Boeing 737s and A320-100s. British Airways replaced the L-1011 and DC-10 tri-jet fleet with more fuel-efficient, twinjet, Boeing 767 and 777 aircraft in the 1990s.

On 27 March 2007, British Airways placed an order for four 777-200ER aircraft with an option for four more; the order cost more than US$800 million at list price; BA has stated these are for fleet expansion. BA's first 777s were fitted with General Electric GE90 engines, but BA switched to Rolls-Royce Trent 800s for the nineteen most recent aircraft. This choice has been continued on the four most recent orders.

On 27 September 2007, BA announced their biggest order since 1998 by ordering thirty-six new long-haul aircraft. The company ordered twelve Airbus A380s with options on a further seven, and twenty-four Boeing 787 Dreamliners with eighteen options for delivery between 2013 and 2016. Rolls-Royce Trent engines were again selected for both orders with Trent 900s powering the A380s and Trent 1000s powering the 787s. The Boeing 787s will replace fourteen of British Airways' Boeing 767 fleet while the Airbus A380s will replace twenty of BA's oldest Boeing 747-400s and will most likely be used to increase capacity on key routes from London Heathrow. The A380 will be launched on the Los Angeles route, with the Hong Kong route starting a month later. The Boeing 757 was withdrawn from British Airways service in October 2010.

On 1 August 2008, BA announced orders for six Boeing 777-300ERs and options for four more as an interim measure to cover for delays over the deliveries of their 787-8/9s. Of the six that have been ordered, four will be leased and two will be fully acquired by British Airways. On 12 January 2009, Willie Walsh stated that the 777 purchase did not indicate a ruling out of the Airbus A350 for BA's fleet renewal programme and "the airline expects to reach a decision towards the end of the year."

On 22 April 2013, IAG confirmed that it had signed a memorandum of understanding to order 18 A350-1000 aircraft for British Airways, with an option for a further 18. The aircraft would replace some of the airline's fleet of Boeing 747-400s. Options for 18 Boeing 787 aircraft, part of the original contract signed in 2007, have been converted into firm orders for delivery between 2017 and 2021.

On 26 June 2013, British Airways took delivery of its first 787s. The airline will operate the 787 aircraft to Toronto from 1 September 2013 and to Newark from 1 October 2013. BA's first A380 was delivered on 4 July 2013; three are planned to be in service by the end of 2013. It will begin regular services to Los Angeles on 24 September 2013, followed by Hong Kong from 22 October 2013.

The majority (77%) of the British Airways fleet is either powered by Rolls-Royce or IAE alliance engines, of which Rolls-Royce was a major contributor. The remaining 23% of the fleet is equally divided between General Electric and the CFM International consortium.

The combined International Airlines Group entity, that BA is now a part of, operates around 400 aircraft, carries over 62 million passengers annually, and serves more than 200 destinations.

Incidents and accidents

  • In November 1974, British Airways Flight 870 from Dubai to London Heathrow, operated by a Vickers VC10, was hijacked in Dubai, landing at Tripoli for refuelling before flying on to Tunis. One hostage was murdered before the hijackers eventually surrendered after 84 hours. The captain, Jim Futcher, was awarded the Queen's Gallantry Medal, the Guild of Air Pilots and Air Navigators Founders Medal, the British Air Line Pilots Association Gold Medal and a Certificate of Commendation from British Airways for his actions during the hijacking, having returned to the aircraft to fly it knowing the hijackers were on board.
  • On 10 September 1976, a Trident 3B on British Airways Flight 476, flying from London Heathrow to Istanbul collided in mid-air with an Inex Adria DC9-31 near Zagreb, Croatia, resulting in the 1976 Zagreb mid-air collision. All 54 passengers and 9 crew members on the BA aircraft died. This is the only fatal accident to a British Airways aircraft since the company's formation in 1974.
  • On 24 June 1982, Flight 9, a Boeing 747-200, G-BDXH, City of Edinburgh flew through a cloud of volcanic ash and dust from the eruption of Mount Galunggung, causing extensive damage to the aircraft, including the failure of all four engines. The crew managed to glide the plane out of the dust cloud and restart all four of its engines, although one later had to be shut down again. The volcanic ash caused the cockpit window to be scratched to such an extent that it was not possible for the pilots to see out of the plane. However, the aircraft made a successful emergency landing at Halim Perdanakusuma International Airport just outside Jakarta, Indonesia. There were no fatalities or injuries.
  • On 10 June 1990, Flight 5390, a BAC One-Eleven flight between Birmingham and Málaga, suffered a windscreen blowout due to the fitting of incorrect bolts the previous day. The Captain suffered major injuries after being partially blown out of the aircraft, yet the co-pilot landed the plane safely at Southampton Airport. The captain, Tim Lancaster, despite the physical trauma he suffered, fully recovered and five months later he returned to duty.
  • On 2 August 1990, 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, a Boeing 747-100, registration G-AWND.
  • On 17 January 2008, British Airways Flight 38, a Boeing 777-200ER G-YMMM, flying from Beijing to London, crash-landed approximately 1,000 feet (300 m) short of London Heathrow Airport's runway 27L, and slid onto the runway's threshold. This resulted in damage to the landing gear, the wing roots, and the engines, resulting in the first hull loss of a Boeing 777. There were no fatalities, but there was one serious and twelve minor injuries.

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