British Caledonian in the 1970s

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Main article: British Caledonian

This article is about the airline British Caledonian (BCAL), in the 1970s.

Contents 1 1977 1.1 Introduction of wide-body aircraft 1.2 Bermuda II treaty 2 1978 2.1 Financial 2.2 Development of routes across London 2.3 Studies of supersonic aircraft 3 1979 3.1 Orders of widebody aircraft 3.2 Helicopter operations 4 References

[edit] 1977

In 1977 British Caledonian began laying the foundation for further, profitable growth of its business by introducing the first two examples of a brand-new, state-of-the-art fleet of widebodied jet aircraft as well as by resuming transatlantic scheduled air services under a new bilateral agreement with the US.

[edit] Introduction of wide-body aircraft

Following an exhaustive, three-week evaluation of the Boeing 747, the McDonnell Douglas DC-10 and the Lockheed L-1011 Tristar during the summer of 1976, BCal chose the DC-10 as the widebodied aircraft best suited to serve its expanding long-haul route network. ^[1] The airline placed an order for two long range series 30 aircraft with an option on another two. ^[2][3][4] To ensure an early delivery, the company took over a delivery slot for two aircraft that had originally been booked by China Airlines.

BCal made its widebody debut on March 13, 1977 when the first of the two DC-10s on firm order arrived at the airline's Gatwick base after a non-stop delivery flight from the manufacturer's plant in Long Beach, California. ^[2] This occasion marked the first time ever a widebodied aircraft wore the company's livery.

The aircraft, which was configured in a 265-seat, two-class layout, entered commercial airline service on BCal's busy West African trunk routes to Nigeria and Ghana later the same month, replacing the airline's Boeing 707 narrowbodies on six of the seven weekly services on these routes. ^[2]

The second aircraft, which arrived at Gatwick in mid-May of that year, was initially configured in a 295-seat, single-class configuration. It entered service later that month on BCal's "Advanced Booking Charter" (ABC) routes to the US and Canada. ^[2] The aircraft was re-configured in the airline's contemporary, 265-seat, two-class scheduled configuration at the end of the summer period. It began replacing Boeing 707s on two of BCal 's three weekly South Atlantic schedules to Brazil, Argentina and Chile as well as on one of the company's two weekly mid-Atlantic schedules to Venezuela, Colombia and Peru from the beginning of the 1977/'78 winter timetable period.

The introduction of the DC-10 widebodies also resulted in a reduction of BCal's 707 narrowbody fleet from eleven to nine aircraft. ^[2] BCal had arranged a trade-in for these aircraft with McDonnell Douglas. (1977 coincidentally happened to be the year BCal acquired its last Boeing 707.[1])

The DC-10's superior operating economics - compared with the 707 - enabled BCal to operate the aircraft non-stop from Buenos Aires to Gatwick with a viable payload.

Although the introduction of the DC-10 resulted in a huge increase in BCal's long-haul passenger and cargo capacity, the actual loads exceeded the airline's forecasts and helped it grow its traffic volumes on its scheduled services to West Africa and South America. ^[5]

BCal was so pleased with the DC-10's performance that it decided to convert both of the options it had taken when placing the original order for two aircraft during 1976 into firm orders for delivery during the spring and autumn respectively of 1978. However, a subsequent strike at the manufacturer's Long Beach plant meant that McDonnell Douglas could not honour the delivery schedule on which it had agreed with BCal. This necessitated the temporary lease of a Boeing 747-100 from Aer Lingus. (BCal was using BA flight deck crews to operate the aircraft as it did not have any 747-qualified pilots at the time.) ^[6] The aircraft, which wore a slightly modified BCal livery, was operating the Gatwick-Houston schedule during the 1978/'79 winter timetable period to cover for the late delivery of the airline's third DC-10. BCal's third and fourth DC-10 were eventually delivered during the spring and autumn of 1979 operating the airline's Houston and mid-Atlantic routes. These aircraft featured a 241-seat first-executive-economy, three-class configuration, which was a novelty at the time. This new three-class arrangement became BCal's standard long-haul configuration. The delivery of the third and fourth DC-10 resulted in the disposal of two further 707s, reducing the long-haul, narrowbodied fleet to seven aircraft.

The same year itself BCal ordered a further four DC-10s, three of which were delivered during 1980. ^[7] The final aircraft was delivered during the first quarter of 1981, giving BCal a fleet of eight DC-10-30 long-haul, widebodied aircraft. ^[8] These aircraft formed the airline's core long-haul fleet until its takeover by BA in December 1987. (Interestingly, six of the same aircraft as well as two subsequently acquired, second-hand examples continued to form BA's core long-haul fleet at Gatwick until their retirement during the late 1990s.) BCal's additional DC-10s were used to expand the airline's schedule to Nigeria and Ghana to ten weekly round-trips as well as to replace most of the remaining 707s on the airline's other long-haul routes. They were also used to launch a new Gatwick-Dubai-Hong Kong schedule during the summer of 1980 ^[9] as well as to re-establish BCal's presence as a scheduled carrier on the Gatwick-L.A. route in 1982, following the withdrawal of the Laker Airways "Skytrain" operation on that route in the aftermath of that airline's spectacular bankruptcy.

In 1982 BCal acquired its first and only two DC-10 series 10 aircraft from the estate of the defunct Laker Airways. These aircraft were operated by British Caledonian Charter, a dedicated charter subsidiary set up to fulfill some of the charter contracts BCal had agreed to take over in the wake of Laker Airways' collapse.

During 1985 BCal acquired a further two, second-hand DC-10-30s. ^[10] They were the final examples of this aircraft type to join BCal's fleet. Both of the aircraft replaced two, originally brand-new Airbus A310 widebodies BCal had primarily operated on its medium-haul routes to North Africa as well as on some of its newly launched Middle Eastern services for a brief period during the mid-1980s. They were also used to operate the Saudi Arabian schedules, which BCal had obtained from BA in return for its South American services.

The first Boeing 747 to enter commercial airline service with BCal on a long-term basis was a series 230B aircraft acquired from defunct US carrier and erstwhile transatlantic competitor Braniff Airways. ^[11][12] The aircraft, which originally belonged to Lufthansa when new, entered service on the airline's Nigerian route in 1982 replacing its DC-10s. ^[13][12] A second, second-hand 747-200B was acquired from Royal Jordanian Airlines in 1985. This was the first and only 747 to join BCal's fleet in a mixed passenger-cum-freight "Combi" configuration. It was used to re-establish a scheduled BCal operation between London Gatwick and New York JFK, three years after the original Laker Airways "Skytrain" operation on that route had ceased. BCal acquired an additional three second-hand 747-200s from various sources during the second half of the 1980s, which it used to replace the DC-10s on its Gatwick-Dubai-Hong Kong schedule as well as to launch a new Far Eastern schedule to Tokyo during the summer of 1987, the last year of the airline's existence.

[edit] Bermuda II treaty

In July 1976 Edmund Dell, the then new Secretary of State for Trade, renounced the original Bermuda air services agreement of 1946 and initiated bilateral negotiations with his US counterparts on a new air services agreement, which resulted in the Bermuda II treaty of 1977.

This presented BCal with new transatlantic opportunities to begin scheduled services to additional gateway cities in the US.

Under the new agreement, BCal had its licences to commence scheduled services from its Gatwick base to both Houston and Atlanta confirmed and was designated as the UK's exclusive flag carrier on both routes. (The CAA, which had come into being in 1972 following one of the three main recommendations contained in the 1969 Edwards report, had awarded BCal these route licences during the so-called "cannon ball" hearings of the same year. However, the airline was unable to use them at that time as there was no provision in the original 1946 Bermuda air services agreement to operate direct scheduled services to any of these destinations from the UK.) It also obtained a licence and sole UK flag carrier status to commence scheduled services from Gatwick to Dallas/Fort Worth. ^[14] (BCal had faced stiff competition from British Airways for this licence. BA had proposed to run a Heathrow-Dallas/Ft. Worth service instead. However, the BAA, Heathrow's and Gatwick's owner and operator, had thrown its full weight behind the BCal application to serve this route from Gatwick as it sought to support BCal in its efforts to develop a fully fledged network of high-yield business routes from that airport in order to transform the airport's financial performance. ^[15] [At the time Gatwick was still underutilised as well as losing money.]) In addition, BCal obtained a licence and sole UK flag carrier status to commence scheduled all cargo flights between Gatwick and Houston - including an optional stop at Manchester or Prestwick in either direction.

During the Bermuda II negotiations the UK side succeeded in having a clause stating that Gatwick - rather than Heathrow - was to be nominated as the designated US flag carrier's London gateway airport whenever BCal was going to be the sole designated UK flag carrier on the same route inserted into the new air services agreement. This clause was meant to support the growth of BCal's scheduled operation at Gatwick as well as to redress the competitive imbalance between it and its much bigger, more powerful rivals.

The UK side furthermore succeeded in negotiating a three-year "exclusivity" period for the incumbent operator on any new route with their US counterparts.

For Gatwick-based BCal this meant that it did not have to face any competitor that was using Heathrow, a more accessible airport with a bigger catchment area and a far greater number of passengers connecting between flights, on any of the new routes it was planning to launch to the US. It also meant that it had any new route to the US completely to itself for the first three years of operation, which most airline industry analysts reckon is sufficiently long for a brand-new scheduled air service to become profitable.

At British insistence Bermuda II furthermore contained clauses that made it illegal for any airline operating scheduled flights between the UK and the US to resort to predatory pricing or capacity dumping. Air fares were only approved if they reflected the actual cost of providing these services. Similarly, capacity increases were sanctioned on a reciprocal basis only. The reason for insisting on the inclusion of these provisions in the Bermuda II agreement was to prevent the much bigger, better financed and commercially far more aggressive US carriers from undercutting BCal with "loss-leading" fares cross-subsidised with profits those carriers' vast domestic networks generated, as well as to stop them from "marginalising" the UK carrier by adding capacity far in excess of what the market could sustain.

In 1981, in an annexe to Bermuda II, both sides agreed to automatically nominate Gatwick as the gateway airport for London for any London-US route that did not already exist under the original 1946 Bermuda agreement. ^[16]

Moreover, both sides agreed to continue dual designation, i.e. designating two UK flag carriers as well as two US flag carriers, on the London-New York and London-Los Angeles routes. The principle of dual designation was to be extended to another two high-volume routes. In the event, the UK side chose to designate a second carrier on London-Miami, while the US side chose London-Boston for the same purpose. This meant that a second British airline was permitted to commence scheduled services on the former route while another American carrier could do the same on the latter route.

However, the UK Government chose to designate Laker Airways rather than BCal as the second UK flag carrier to New York to enable that airline to inaugurate its long-planned "Skytrain" operation on that route. The UK Government subsequently chose to designate Laker Airways as the second UK flag carrier on the L.A. and Miami routes as well. The Government's decision to designate Laker Airways as the UK's second flag carrier on Gatwick-L.A. as well (in addition to Gatwick-JFK) particularly irked BCal's senior management because it felt that this constrained the airline's future expansion plans, thereby undermining its ability to achieve the critical mass it felt it needed to become a serious competitor to the generally much bigger, established scheduled airlines. BCal's senior management also felt that Laker Airways' designation as the second UK flag carrier on these routes had undermined the "Second Force" concept itself and that it had made the Government's earlier undertaking to make BCal its "chosen instrument" of the private sector meaningless. (Prior to the CAA's decision to award a licence to Laker Airways to run a daily "Skytrain" service between Gatwick and L.A. and the Government's decision to designate that airline as the UK's second flag carrier on the London-Los Angeles route, BCal had submitted an alternative proposal to the CAA. This had been based on a daily, full-service, three-class scheduled operation featuring a "no frills" cabin at the back of the plane, rather than a "standard" economy class. ^[17] BCal had proposed to launch the new service in 1978 [the same year as Laker Airways] and to commence operations with Boeing 707 narrowbodied equipment prior to the delivery of additional DC-10 widebodied aircraft.)

BCal resumed scheduled transatlantic services on October 23, 1977. ^[18] On that day the airline became the first UK carrier to launch a daily, non-stop London (Gatwick)-Houston scheduled service ^[18] as well as a weekly, direct all-cargo service on the same route, which was operated via Prestwick on the outbound leg and via Manchester on the return leg. BCal inaugurated the daily scheduled passenger flights with a Boeing 707-320C narrowbodied aircraft that had been re-configured in a three-class layout, which featured a dedicated "Executive" cabin, in addition to a first and economy class section. ^[19] This was the first time a scheduled airline had offered a "third" class specifically aimed at the business traveller since the beginning of the jet age. ^[19] BCal operated the weekly all-cargo service with one of its dedicated 707 pure freighters. It was intended to replace the 707s operating the all-passenger services with a brand-new, larger capacity as well as more fuel-efficient DC-10 widebodied aircraft at the start of the 1978 summer timetable period. However, it became necessary to lease an Aer Lingus 747 for six months to cover the 1978/'79 winter timetable period due to the delayed delivery of BCal's third DC-10 as a result of a strike at the manufacturer's plant.

(BCal's resumption of scheduled services across the North Atlantic in October 1977 coincided with the launch of a new domestic scheduled service linking the airline's Gatwick base with Aberdeen, the centre of the North Sea oil industry. This service was operated by BA's regional division twice a day [Monday to Friday] using a BAC One-Eleven 400 jetliner. BCal agreed to hold details of BA's new Gatwick-Aberdeen link in its CRS as this service constituted an important feeder operation for oil industry executives and personnel whose work commitments required them to travel regularly between Aberdeen and Houston, Dallas, Lagos and Tripoli. [At the time of inauguration of BCal's scheduled Gatwick-Houston flights, the airline was already well-established on the Gatwick-Lagos and Gatwick-Tripoli routes, which were by far its most profitable scheduled air services.)

On June 1, 1980 a BCal DC-10 inaugurated the first-ever non-stop scheduled air service operated by a British airline between London (Gatwick) and Atlanta, initially at a frequency of six weekly round-trips.

Dallas/Ft. Worth joined BCal's long-haul scheduled route network as an extension of the short-lived St. Louis service on October 26, 1980, at a frequency of four flights a week. Daily non-stop services to Dallas began at the start of the 1981 summer timetable period. (The delay in commencing non-stop scheduled air services to Dallas was a result of bilateral restrictions enshrined in Bermuda II. BCal needed to wait for Braniff's three-year "exclusivity" period as the first-ever scheduled operator authorised to fly non-stop between Dallas and London to come to an end, before it was permitted to compete on that route. [Braniff had begun operating on this route in March 1978.] Similarly, Pan Am, the designated US flag carrier to fly non-stop between Houston and London needed to wait for BCal's three-year "exclusivity" period on that route to come to an end before it could launch a competing service. [BCal itself had followed Delta Air Lines, the designated US flag carrier to operate non-stop between Atlanta and London since May 1978, on to the Gatwick-Atlanta route.])

During April 1980 BCal inaugurated its four-times-a-week non-stop Gatwick-St. Louis scheduled service, at the time operated with one of the airline's remaining 707s.

BCal also obtained a licence to commence scheduled services to San Juan, Puerto Rico. Scheduled services to San Juan were inaugurated at the start of the 1980/'81 winter timetable period. San Juan became a stop on BCal's twice weekly mid-Atlantic schedule from Gatwick to Caracas, Bogotá and Lima.

Following Laker Airways' collapse during the first quarter of 1982, BCal immediately applied to the CAA to have its suspended London Gatwick-Los Angeles licence reactivated to enable it to resume a daily non-stop scheduled operation on that route. BCal also requested the Government to re-designate it as the UK's second flag carrier between London and Los Angeles. The CAA initially refused granting BCal a short-term temporary licence as there was legal uncertainty as to who the actual holder of the bankrupt airline's scheduled licences was. ^[11] However, following the intervention of then UK Secretary of State for Trade John Biffen on behalf of BCal, the CAA eventually granted BCal an "open-ended" temporary licence valid from May 1, pending the award of a long-term licence. ^[20] The Government agreed to designate BCal as the UK's second flag carrier on the aforesaid route. This enabled BCal to take over the Gatwick-L.A. route from July 1 when it commenced scheduled operations with a three-class McDonnell Douglas DC-10-30 widebodied trijet. Later that year the CAA awarded BCal a long-term licence for this route.

BCal also reactivated its suspended licence for a daily Gatwick-JFK scheduled operation. However, it decided to postpone the route's re-launch for two reasons. One reason was a moratorium delaying the addition of any new capacity between London Heathrow/Gatwick and New York JFK by three years. This had been agreed between the UK and the US governments in the wake of Laker Airways' collapse to reduce the huge overcapacity in that particular market. ^[21] The other was the competitive situation on that route.^[21] At the time, People Express, a rapidly expanding "post-deregulation era" discount airline had announced its intention to begin daily low-fare flights between its base at Newark Liberty International Airport and BCal's base at London Gatwick using Boeing 747s from May 1983, thus filling the void left by Laker Airways' departure. ^[21] Moreover, Virgin Atlantic Airways, a new UK carrier, was proposing to launch scheduled services on the same route as well, which began in earnest during June 1984. ^[21] BCal's senior management was of the opinion that all this additional capacity far exceeded what the London-New York market could profitably sustain at the time, especially when taking into account Gatwick's smaller catchment area (compared with Heathrow) where all the extra capacity was going to be concentrated. Eventually, BCal decided that the market had grown sufficiently and that profitablilty had recovered to an acceptable level to go ahead with the route's re-launch during the summer of 1985 when the airline inaugurated a daily scheduled service between London Gatwick and New York JFK using a second-hand Boeing 747-200B "Combi". ^[21] This aircraft featured BCal's contemporary three-class seating arrangement for its passengers as well as a main deck cargo-carrying capability. (The latter feature was unique among the entire BCal fleet.)

During the early 1980s the CAA also awarded BCal further licences to commence scheduled operations to additional US gateway airports - including Denver, Orlando and Tampa. However, BCal did not launch scheduled services to any of these destinations. (The airline eventually handed over its unused Denver licence to BA along with its remaining South American route network in exchange for BA's Saudi-Arabian routes in 1985.) ^[22]

In 1987 BCal applied to the CAA for a licence to extend its daily Gatwick-Los Angeles service to San Diego. By the time the CAA awarded the licence, BCal had ceased to exist as BA had assumed responsibility for its erstwhile competitor's worldwide scheduled operation upon completing the takeover of its former rival in April 1988.

Both the Houston and Dallas routes eventually produced good profits, largely as a result of a steady stream of high-yield, oil-related business traffic. The re-launched New York and Los Angeles routes made a positive contribution as well, as a result of a good mix of business and leisure traffic. However, BCal never made any money on the St. Louis route and the airline struggled to make the Atlanta route profitable. (On both of the latter routes as well as on the Los Angeles route BCal had entered into so-called "buddy" agreements with Ozark Airlines, Eastern Air Lines and Continental Airlines ^[23]. These agreements aimed to co-ordinate BCal's transatlantic schedules with those airlines' domestic schedules to be able to offer its customers "seemless" onward connections within the US to destinations BCal did not serve direct from the UK.) BCal's difficulties on the Atlanta route were to a large extent caused by Delta's dominance at Atlanta, where that airline was headquartered and where it had its main operational base. (At the time Delta accounted for more than 70% of all traffic passing through Atlanta, and around four-fifths of all passengers using the airport made an onward connection from there or had flown in on a connecting flight, in the overwhelming majority of cases with Delta Air Lines itself. This gave Delta a stranglehold over its home base.) To improve the financial performance of the Atlanta route, BCal proposed running a joint service with Belgium's flag carrier SABENA, which used to operate the route from Brussels. ^[24] (At the time BCal was operating five weekly round-trips between Gatwick and Atlanta using a DC-10-30 widebody and SABENA was operating Brussels-Atlanta twice a week with a Boeing 747-100. Both services lost money. ^[24]) BCal applied to the CAA for permission to replace its own loss-making, non-stop Gatwick-Atlanta service as well as SABENA's loss-making, non-stop Brussels-Atlanta service with a daily, combined Brussels-Gatwick-Atlanta service operated with a SABENA 747 "Combi" due to commence during 1985. ^[24] However, BA objected to this on the grounds that using a foreign-registered aircraft to operate a scheduled service between the UK and the US constituted a violation of the Bermuda II UK-US bilateral air services agreement. ^[24] Instead, BA asked the CAA to revoke BCal's Gatwick-Atlanta licence and transfer it to itself. ^[24] In the event, the CAA approved BCal's application and dismissed BA's objection. ^[24] BCal and SABENA commenced their joint daily Brussels-Gatwick-Atlanta schedule utilising one of the latter's 747s in 1986. ^[24] BCal supplied 62% of the cabin crew. SABENA supplied the flight deck crew as well as the remainder of the cabin crew. ^[24] (The 62:38 cabin crew split in favour of BCal had been decided on the basis of the percentage of seats each airline was contractually obliged to sell on that service. ^[25]) BCal's and SABENA's joint operation led to complaints - mainly from BCal's premium customers - that the seating arrangement and in-flight service provided on the SABENA aircraft did not conform to BCal's very demanding standards. On the other hand, some of SABENA's French-speaking customers used to complain about the lack of foreign language skills of BCal's cabin crew.

[edit] 1978

British Caledonian termed 1978 the "Gatwick Year". There were several reasons for this.

By 1978 the airline had fully recovered from the 1974 crisis year, which had threatened its very existence at that time. After the severe contraction forced upon it by the early '70s' oil crisis, the company's core scheduled operation was growing again with new widebodied aircraft and routes being added and schedules being expanded. Furthermore, business was booming with planes being fuller than at any time in the firm's history and it expected to earn record profits during that year.

To underline BCal's confidence about its future prospects, the interiors of the airline's narrowbodied fleet were undergoing a major refurbishment at that time. (These aircraft - including the entire 16-strong, short-haul BAC One-Eleven fleet comprising nine larger series 500s and seven smaller series 200s - were given "widebody look" interiors featuring new seat covers that prominently displayed BCal's corporate logo among several other improvements to give customers the same travel experience as on the newly delivered DC-10s.)

During the second half of 1978 BCal also introduced an updated livery and replaced its single Piper PA-23 Aztec acquired in 1975 with a pair of larger Piper PA-31 Navajo Chieftains. (BCal used one of these aircraft to inaugurate a new Gatwick-Birmingham feeder route at the start of the 1978/'79 winter timetable period.) ^[26]

These positive developments happened to coincide with the late Sir Adam's chairmanship of the AEA (1977 to 1978).

BCal also became a "scheduled service only" airline during 1978 ^[27], implementing a decision taken the year before when the share of passengers travelling on charter flights had declined to just 15% of all passengers carried (as opposed to two-thirds at the time of the airline's inception seven years earlier). There were two main reason's for BCal's withdrawal from the charter market:

• A 25% contraction of the transatlantic ABC flights market as a result of the initial success of the daily Laker Airways "Skytrain" low-fares, "no frills" scheduled operation between London Gatwick and New York JFK, which began during the previous year's autumn season. ^[28]

• A steady decline in charter rates in the European package tour holiday market where BCal used to supply whole-plane charter seats to its Blue Sky Holidays tour operator affiliate as well as third party tour companies.

Prior to "Skytrain", BCal had been a major operator in the ABC market running regular flights to the US, Canada and West Africa from its Gatwick base and a number of other UK departure points. These flights were sold through its Golden Lion Tours tour operator affiliate. BCal found that it could deploy this long-haul capacity far more profitably to increase the number of routes and flights in its most important long-haul scheduled markets because the yields on its prime long-haul scheduled routes were much higher than in the ABC market.

Although operating short-/medium-haul whole-plane charters enabled the airline to improve the utilisation of its BAC One-Eleven fleet - especially at week-ends, the company's increasing focus on the scheduled side of its business (as opposed to charter flights) meant that overall costs were increasing as well. The reason for this increase in costs was the greater number of overheads that were required to support the expanding scheduled operation. This, in turn, meant that the firm had acquired significantly higher costs than most of its contemporary charter airline rivals, thereby making it more and more difficult to compete profitably in this market at the prevailing low rates. In addition, there always used to be problems with the aircraft's configuration. ^[29] (BCal used to operate its short-/medium-haul schedules and charters with the same planes as its whole-plane charter market activities were not of the scale that would have justified keeping a dedicated fleet for these activities. This, of course, meant that the airline was unable to adopt separate high- and low-density seating arrangements to meet the differing, specific requirements of the scheduled and charter markets.) ^[29] Moreover, there used to be time-keeping issues resulting from operating scheduled and charter flights with the same aircraft that negatively impacted the scheduled services' punctuality whenever these were delayed due to the knock-on effect created by late-incoming charter flights. ^[30]

1978 was the first year BCal operated the majority of its scheduled services plying the prime long-haul routes to West Africa and South America with state-of-the-art widebody equipment.

At the start of that year's summer timetable period flight frequencies on BCal's Gatwick-Glasgow and Gatwick-Amsterdam routes increased to five round-trips per day on week days (Monday to Friday). During that period the airline also resumed its Edinburgh-Newcastle-Copenhagen service, which it had abandoned in 1974.

During 1978 Abidjan joined BCal's scheduled route network. At the start of the 1978/'79 winter timetable period Benghazi and Birmingham joined the network. At that time the airline also increased frequencies between London Gatwick and Paris Charles de Gaulle to seven daily round-trips on week days, with flights operating at two-hourly intervals. The addition of twice-weekly flights to the Libyan port city of Benghazi to the existing five weekly services to Tripoli meant that for the first time BCal was able to offer its passengers daily flights to Libya, an important market for highly profitable, oil-related business travel. ^[31] BCal's introduction of a 747 on the daily Gatwick-Houston schedule furthermore enabled it to replace its two-class configured One-Eleven 500s on the West African coastal schedule to Banjul and Freetown via Casablanca and Las Palmas with 707s. The 707's greater range (compared with the One-Eleven) enabled it to cut out the intermediate stops and offer its passengers a more convenient, direct routing that took less time. BCal moreover replaced two-class One-Elevens operating on the Tripoli route with 707s.

In addition, the BAA had just completed the first phase of a major refurbishment and extension of BCal's Gatwick base. The centrepiece of this revamp was a completely refurbished centre pier featuring eleven telescopic, widebody-compatible loading bridges. ^[32][33] These were the first loading bridges to be installed at Gatwick, which was a single-terminal airport at the time. For the first time in its history, BCal also gained a dedicated check-in area for all its flights. This allowed its passengers to avoid the so-called "bucket-and-spade" brigade (as the airport's charter airline passengers were commonly referred to during the 1970s and early '80s). ^[33] These passengers had given Gatwick a poor public image during the '70s and '80s. At the peak of the annual summer holiday season the press used to descend on Gatwick to take photographs of hundreds of families with small children crowding the airport's terminal while awaiting announcements of their delayed charter flights' departures.

Besides, the Government had announced its intention to take pro-active steps to help ensure Gatwick's development as a genuine alternative to Heathrow the year before. It was hoped that this in turn would assist BCal's development as a serious alternative to BA and the other major, established scheduled airlines.

These steps included inviting BCal and Britain's other Independent airlines to apply to the CAA for route licences to operate scheduled services to destinations in the British Isles and on the Continent that were not already served from Gatwick, thereby increasing the reach of the airport's scheduled route network as well as providing more connecting traffic for BCal. (At the time BCal was Gatwick's principal scheduled airline, which operated almost all of the airport's long-haul scheduled services as well as the bulk of its short-haul schedules.)

The CAA had conducted a public hearing into competing applications for the award of several licences to commence new short-haul scheduled services from Gatwick during 1977. The applicants included BCal as well as BA, BIA and Dan-Air. At the time BCal had applied to begin scheduled services from Gatwick to Copenhagen, Gothenburg, Oslo and Stockholm ^[34][35] as well as to add Aberdeen to its existing Edinburgh-Newcastle-Copenhagen licence. ^[36] BCal was keen to expand its limited short-haul European network beyond the existing four routes linking London Gatwick with Paris Charles de Gaulle, Amsterdam Schiphol, Brussels National (Zaventem) and Genoa (a former BUA route). ^[37] The airline needed to develop its connecting traffic at Gatwick by growing the European network to include destinations in Germany, Switzerland, Scandinavia and Southern Europe in order to help it increase load factors on its long-haul flights to Africa, South America and the US as well as to improve the profitability of these services.

BA had applied to serve Dublin, Düsseldorf, Frankfurt and Zürich from Gatwick. ^[35] It also asked the CAA to confirm several licences it already held to serve additional destinations in Europe from Gatwick. ^[36]

BIA had applied to serve Copenhagen, Dublin, Düsseldorf, Geneva, Frankfurt, Hamburg, Milan Linate and Zürich from Gatwick. In support of its application, BIA had proposed to operate these services with 65-seater Fokker F-28 1000 series "Fellowship" jet aircraft, rather than the larger BAC One-Eleven 500s its rivals had planned to use on their services. These had almost twice the seating capacity of the Fokker jets. Using smaller aircraft would have enabled BIA to offer more frequent flights, thereby offering a more attractive product for the business travel market. BIA reckoned that this would improve its chances of being awarded these licences.^[38][36]

Dan-Air had applied to run scheduled services to several of the aforementioned destinations as well as to Berlin Tegel, where a number of that airline's aircraft were already based, and Munich.

In the event, the CAA decided to approve both BCal's as well as BA's applications but to reject BIA's and Dan-Air's applications. ^[36] The CAA argued at the time that the Scandinavian routes BCal had applied for constituted important feeder services for the airline's long-haul flights to Africa, South America and the US, thereby aiding the future development of the company's scheduled route network at Gatwick. The CAA also argued that BA in its capacity as the UK's primary flag carrier could not be excluded from Gatwick's further development. The CAA furthermore argued that both BIA and Dan-Air lacked the necessary expertise to take on the established scheduled airlines on major international trunk routes. ^[36]

However, BCal was unable to use its newly awarded licences as there was no provision in the bilateral air services agreements the UK had concluded with Denmark, Norway and Sweden for another carrier to operate scheduled services on the main trunk routes between London and these countries, in addition to the incumbent flag carriers' services. This meant that BA and Scandinavian Airlines (SAS) had an effective monopoly on most routes between the UK and Scandinavia. The UK Government agreed to assist BCal in securing reciprocal traffic rights for the London-Scandinavia licences during its negotiations on a new bilateral air services agreement with its three Scandinavian counterparts in December 1978. ^[34] It was hoped that this would enable BCal to commence its first-ever scheduled services from London to Scandinavia at the start of the 1979 summer timetable period.

BA, which was facing no such bilateral restrictions, was able to commence operations an all four routes for which it had been awarded licences at the start of the 1978 summer timetable period itself. ^[31] However, it chose to run low-frequency services offering no more than a single daily round-trip on each of these routes.

Despite this setback for BCal, it was still able to offer its passengers a greater number of possible connections at Gatwick during 1978 compared with the year before, as a result of additional frequencies on existing domestic routes as well as new domestic feeder routes operated/launched by other Independent British airlines.

British Midland replaced its Vickers Viscount turboprops, with which it had operated a thrice-daily service between Gatwick and Belfast ever since it had taken over the route from BCal in 1974, with McDonnell Douglas DC-9 jets. As a result of the jets' higher cruising speed, British Midland was able to operate up to four daily round-trips on that route. In addition, the DC-9's seating capacity was greater than that of the Viscount, thus resulting in a significant overall capacity increase.

Brymon Airways began a new twice daily Gatwick-Plymouth service using an 18-seater De Havilland Canada DHC-6 Twin Otter commuter plane. ^[31]

Air Westward, a newly formed regional airline, began a new service linking Gatwick with its base in Exeter operated with an 18-seat Embraer EMB 110 Bandeirante. ^[31]

Dan-Air commenced a new thrice weekly Gatwick-Bergen One-Eleven schedule. ^[31] This service in particular had scope to deliver additional high-yield, oil-related connecting traffic to BCal as Bergen was one of the twin centres of the Norwegian oil and gas industry.

In addition, Aer Lingus became the first foreign airline to split its scheduled operations between Heathrow and Gatwick when it launched a daily Gatwick-Dublin service to complement BA's service on that route. ^[31]

Government initiatives in support of Gatwick's development also included new policies to transfer all scheduled services between London and Canada as well as London and the Iberian peninsula from Heathrow to Gatwick on April 1, 1979, and to compel all airlines that were planning to operate a scheduled service to or from London for the first time to use Gatwick instead of Heathrow. The latter policy was officially known as the "London Air Traffic Distribution Rules". It came into effect on April 1, 1978 and was applied retroactively from the beginning of April 1977. These rules were designed to achieve a "fairer" distribution of traffic between London Heathrow and London Gatwick, the UK's two main international gateway airports. The policy was aimed at increasing Gatwick's utilisation to help the airport make a profit.

In the event, only BA transferred all of its scheduled services to Gibraltar, Portugal and Spain from Heathrow to Gatwick at the start of the 1979 summer timetable period, after the Secretary of State for Trade had instructed it to do so. Air Canada, Iberia and TAP Air Portugal all refused to follow suit. ^[33] (Air Canada in particular argued that Gatwick's runway was too short to enable it to operate 747s from there non-stop to the Canadian West coast with a viable payload. It had also threatened to make Frankfurt its "number one" destination in Europe if the UK Government forced it to move its London operations to Gatwick.)

The "London Air Traffic Distribution Rules" stated that airlines that did not already operate an international scheduled air service from/to Heathrow prior to April 1, 1977 would not be permitted to commence operations at that airport. Instead, they would have to use Gatwick for all their London-based operations. However, airlines that did not already operate at Heathrow prior to this law taking effect could still commence domestic scheduled services at the airport provided that the BAA, which ran both Heathrow and Gatwick on behalf of the Government, as well as the incumbent Secretary of State for Transport granted them permission to do so. In addition, the "London Air Traffic Distribution Rules" banned all new all-cargo as well as all charter flights from Heathrow as of April 1, 1978.

Avianca, the CAAC (Air China's predecessor) and Philippine Airlines were among the first batch of airlines directed to use Gatwick instead of Heathrow as a result of the "London Air Traffic Distribution Rules". (Both Braniff Airways and Delta Air Lines commenced operations from Gatwick at the same time as a result of Bermuda II.)

Another pro-active measure the Government took to aid BCal's and Gatwick's development at the time was to grant permission for a high-frequency helicopter shuttle service linking both of London's main airports. ^[31]

[edit] Financial

BCal recorded a pre-tax profit of £12.2m during its 1977/'78 financial year to October 31, 1978 ^[39] (the airline had changed the end of its financial year from September 30 to October 31 in the meantime). This translated into a £10m retained profit. It was the company's best-ever financial result since its formation back in November 1970. It also was a clear sign that it had left the dark days of late 1974 and early 1975 when its very existence was under threat firmly behind.

BCal's senior management decided to allocate £644,000 of the retained profit to a new profit-share scheme ^[39] to reward its staff for their hard work, which had succeeded in bringing about a dramatic turnaround in the airline's fortunes. BCal's profit-share scheme, which began the following year, was the first of its kind in the UK airline industry.

The good results boosted BCal's management's confidence in the airline's long-term future prospects. They also boosted staff morale and made everyone working for BCal at the time proud of their company's achievement.

[edit] Development of routes across London

A new, high-frequency helicopter shuttle service linking London Heathrow and London Gatwick was inaugurated on June 9, 1978. ^[40]

This service was operating ten times a day in each direction using a 28-seater Sikorsky S-61N helicopter, which was owned by the BAA. BCal held the licence to operate the service and provided the cabin crew. ^[41] (A single crew member used to look after the passengers on this ten-minute flight.) British Airways Helicopters, the wholly owned helicopter subsidiary of BA whose headquarters were located at Gatwick, provided the flight deck crew and engineering support. ^[31]

The service gave BCal's passengers easier access to flight connections at Heathrow, especially to destinations not served by scheduled flights from Gatwick at the time.

It was used by 60,000 passengers during the first year of its operation. ^[42]

The service ended in 1986 when its licence was withdrawn on environmental grounds following the completion of the M25 London orbital motorway. (There were growing complaints about the "excessive" noise created by a low-flying helicopter from people living underneath the Gatwick-Heathrow Airlink's flight path in politically sensitive constituencies.) ^[42]

[edit] Studies of supersonic aircraft

1978 was also the year BCal set up a task force headed by the late Sir Peter Masefield, at the time BCal's deputy chairman, to investigate the possibility of operating the Aérospatiale-BAC Concorde supersonic airliner viably on the airline's long-haul route network as there were still a few unsold, "white tail" examples available at that time.

Another important reason for BCal's decision to set up a Concorde task force was that the 1976 aviation policy review had left open the possibility of BA launching supersonic services to prime business and leisure destinations within BCal's sphere of influence, such as Lagos or Rio for example. To ward off this potential threat, BCal's senior management decided to develop its own Concorde plans, either independently or in partnership with BA. ^[43]

The most obvious choice for a supersonic service was Gatwick-Lagos, the backbone and main money spinner of BCal's scheduled operation. BCal's Concorde task force's brief was to assess the viability of a second daily all-premium supersonic service complementing the airline's existing daily subsonic, mixed-class widebody service on this route.

BCal put in a bid to acquire one of these "white tail" aircraft. (BA, which had jointly introduced the world's first commercial supersonic service with Air France in 1976, was bidding for the aircraft as well.) In the event, BCal's bid was not successful.

Following the unsuccessful bid to acquire Concorde direct from the manufacturer, BCal eventually arranged for two aircraft to be leased from BA and to have them maintained by Air France. It became necessary to find additional work for BCal's envisaged two-strong, leased Concorde fleet to increase the aircraft's utilisation, thus permitting a profitable operation. Therefore, BCal decided to use the second aircraft to launch a supersonic service between Gatwick and Atlanta. The reason BCal chose to operate its first supersonic service to the US to Atlanta rather than Houston, a far more profitable destination due to the oil-related traffic, was Concorde's range limitation. (BCal's Concorde task force had come to the conclusion that only non-stop supersonic services were viable.)

Both supersonic services were to be launched at the start of the 1979 summer timetable period.

However, the changing geopolitical situation - especially, the fall of the Shah of Iran and the subsequent tripling of crude oil prices - as well as the sheer complexity of the operational arrangements eventually put paid to BCal's Concorde plans.

[edit] 1979

1979 was another good year for British Caledonian. The airline took delivery of its delayed third and fourth McDonnell Douglas DC-10-30 widebodied aircraft during the first and third quarter of that year. This permitted the aircraft's introduction on its daily Gatwick-Houston schedule as well as the replacement of the remaining 707-operated services on its mid- and South Atlantic routes. The narrowbodied capacity thus released was used to add frequencies on existing routes as well as to launch services to new medium- and long-haul destinations. As a result, BCal launched a fourth weekly service to Brazil. It also launched a new route to Oran and added Quito and Guayaquil to the mid-Atlantic schedule. ^[44] The company furthermore increased frequencies on its short-haul routes. A fourth daily round-trip was added to both Gatwick-Manchester and Gatwick-Brussels. A third daily frequency operating on week days (Monday to Friday) was added to the Newcastle-Amsterdam portion of BCal's Glasgow-Newcastle-Amsterdam regional route. Furthermore, BCal granted BIA permission to prefix the flight numbers allocated to all flights that airline operated between Gatwick and Le Touquet as well as between Gatwick and Rotterdam under contract to BCal with its own UK airline designator in addition to BCal's BR airline designator, with frequencies being increased on both of these routes as well.

During that year BCal also established a wholly owned helicopter subsidiary and it placed the launch order for a brand-new widebodied aircraft, the Airbus A310.

This was also the time BCal came up with its own proposal to create a new network of European low-fare services. These were to be marketed under the trademark "Miniprix" and were meant to counter Laker's plans for a pan-European "Skytrain" operation that was supposed to operate on up to 660 different routes criss-crossing the entire continent. ^[45] Including BCal's existing four European destinations, it envisaged linking Gatwick with up to 25 points on the Continent. ^[45] Most of these services were to be initially operated with the airline's existing narrowbodied equipment, i.e. both the BAC One-Eleven 500 and the Boeing 707-320C, at a frequency of one flight per day in each direction. BCal was evaluating both the McDonnell Douglas MD-80 narrowbody as well as the Airbus A310 widebody as suitable long-term replacements for its existing narrowbodied aircraft on these routes. ^[45]

BCal eventually began offering "Miniprix" fares on off-peak services on its existing London Gatwick - Amsterdam route after it had obtained all necessary approvals from the UK authorities and their Dutch counterparts. ^[46][45]

Another important development that helped enhance BCal's network connectivity for its oil industry customers occurred on November 10, 1979. On that day Dan-Air replaced BA's service on the Gatwick-Aberdeen route with an improved schedule - including more flights, all of which were operated with that airline's BAC One-Eleven jet aircraft. (Aberdeen's local business community, which was dominated by the oil industry, depended on a fast and frequent link to London Gatwick to be able to make connections at that airport with long-haul flights serving other important oil industry centres such as Houston, Lagos and Tripoli, which were all served by BCal at the time. However, BA had begun replacing the Aberdeen-based One-Eleven it was using to operate its early-morning schedule to Gatwick with a Vickers Viscount turboprop at the start of the 1978 summer timetable period because the One-Eleven was apparently required to operate another regional BA route from Heathrow. The substitution of the One-Eleven with the Viscount considerably increased the non-stop flying time between Aberdeen and Gatwick because of the turboprop's lower cruising speed compared with the jet it replaced. As a consequence, by the time the Viscount reached Gatwick, most of the onward, long-haul connecting flights had already departed, thereby rendering this service useless for the Aberdeen business community. They therefore backed a lobbying campaign initiated by Dan-Air who were prepared to take over this service, offering an expanded jet schedule of up to three return flights per day at times that suited the requirements of the business community and ensured they could connect to/from other services at Gatwick with ease. This resulted in an application to the CAA to transfer BA's Gatwick-Aberdeen licence to that airline, which - following a successful hearing - the CAA agreed to do.)

Brymon Airways' takeover of BCal's regional, domestic Gatwick-Birmingham schedule, which it operated at an increased frequency of up to three daily return flights using an 18-seat Twin Otter, furthermore contributed to enhancing BCal's overall network connectivity during that period.

However, BCal also suffered a few setbacks during 1979. These included continuing frustration of the airline's desire to launch scheduled services to Scandinavia despite the conclusion of a new Anglo-Scandinavian bilateral air services agreement and the temporary grounding of the airline's widebodied fleet - then comprising three McDonnell Douglas DC-10-30s - during the second quarter following the crash of American Airlines flight 191, a DC-10-10, in Chicago during May of that year. ^[47]

As far as the former was concerned, the new air services agreement the UK had negotiated with Denmark, Norway and Sweden during December 1978 contained an important clause that effectively restricted the provision of scheduled services on trunk routes from/to London to BA and SAS, thereby continuing to prevent BCal from using the licences the CAA had awarded it the year before. ^[48] (As a concession to the UK Government's desire to develop Gatwick as an alternative international gateway airport serving London, SAS agreed to transfer its twice-daily London-Stavanger service and one of its daily London-Copenhagen services from Heathrow to Gatwick as well as to launch a brand-new, daily Gatwick-Aarhus route at the start of the 1979 summer timetable period. BA agreed to launch a daily Gatwick-Stockholm service at the same time. BCal's senior management described the then new Anglo-Scandinavian air agreement as a real "can of worms".)

Regarding the latter, the grounding of the worldwide DC-10 fleet in the aftermath of American's May 1979 Chicago crash necessitated the short-term lease of another 747 to enable BCal to provide adequate capacity on its Nigerian trunk routes during that period. BCal also operated a Dan-Air Comet on short-term lease between Gatwick and Tripoli while the 707s normally used on that service were redeployed to operate a reduced schedule to Houston and South America during the aforesaid period. ^[49]

Another setback BCal suffered at the time was the CAA's decision to turn down the airline's application to extend its existing Gatwick-Lusaka service to Harare (then still called Salisbury) from the start of the 1980 summer timetable period and instead to approve BA's rival application to begin serving the Zimbabwean capital from Heathrow via Johannesburg.

[edit] Orders of widebody aircraft

In 1979 BCal became the European launch customer for the Airbus A310 when the airline placed a firm order for three A310-200s plus an option on another three aircraft. ^[50]

Airbus Industrie had offered BCal a generous discount as an independent launch customer who ran its business along commercial lines and was not depending on any government's financial backing. It thought that this would significantly enhance the new widebody's sales prospects in the US, the largest and most important market in the world for large, commercial aircraft.

Two of the aircraft BCal had on firm order were to be delivered during the spring of 1984 while the remaining aircraft was to be delivered during the autumn of that year. ^[50] BCal chose General Electric (GE) CF6-80 engines to power its A310s. ^[50] These aircraft were intended to replace BCal's remaining, aging and increasingly fuel-inefficient 707 narrowbodies on higher volume medium-haul routes, primarily Gatwick-Tripoli, as well as on "thin", long-haul routes to West and Southern Africa.

In the event, only two aircraft were delivered. In addition to replacing BCal's 707s on the North, West and Southern African routes, the airline also used these twin-engined widebodies on its Middle East services - chiefly Gatwick-Riyadh, for which it had subsequently obtained a licence. ^[51] During the summer period BCal's A310s occasionally operated peak-time services on the Gatwick-Charles de Gaulle route on week days and on Gatwick-Jersey on week-ends as well.

However, both aircraft only had a short career with BCal. They were sold during the mid-1980s following the loss of the highly profitable Libyan routes. (At the time BCal's senior management decided that these aircraft no longer suited its requirements and chose to standardise the airline's widebodied fleet on the McDonnell Douglas DC-10 and the Boeing 747, respectively. ^[52])

Following the aircraft's sale to a company based in Hong Kong, BCal became the subject of a major controversy involving both the UK and the US governments when Western intelligence sources discovered both aircraft in Libya - minus their engines. ^[53] In spite of the imposition of international sanctions denying Libya access to anything high tech - including commercial airliners, their powerplants and systems - at that time, these aircraft had somehow managed to reach there via Cyprus. ^[53]

[edit] Helicopter operations

In 1979 BCal established British Caledonian Helicopters as a wholly owned subsidiary headquartered in Aberdeen as a result of purchasing Ferranti Helicopters.

BCal's decision to set up its own helicopter subsidiary at Aberdeen, the leading North Sea oil industry centre, at a time when North Sea oil production was in full swing was driven by the airline's desire to cash in on the North Sea oil boom. It was also part of a strategy to offer a seamless service to the oil industry as an extension of BCal's contemporary "linking the oil capitals of the world" corporate strategy. BCal felt vindicated in its decision to launch a helicopter subsidiary when the price of a barrel of crude oil had reached an all-time high in the aftermath of the second global oil price shock of the 20th century triggered by the Shah of Iran's fall from power in 1979.

However, the airline decided to sell off its helicopter unit in 1987 as a result of its growing financial difficulties as well as the steep decline in oil-related business due to the collapse of the oil price in the mid-'80s.

[edit] References