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History of British A Airways irways From Wikipedia, the free encyclopedia

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History of British Airways

London Heathrow Airport has been the main hub of British Airways since formation; since 2008, most activity has been  based in the  the  Terminal 5 building.

the flag carrier  airline of the United Kingdom. It is the largest British Airways (BA) is the  airline in the UK based on fleet size, international flights and international destinations.[1] British Airways was considered the largest UK airline by passenger numbers from its creation in 1974 until 2008, 2008 , when it was displaced by low-cost rival EasyJet. EasyJet. Since its at  London Heathrow Airport Airport,, inception, British Airways has been centred at its main hub at with a second major hub at London Gatwick Airport. Airport. The British Airways Board was formed in 1971 to control the policy and finances of the two large London-based airline corporations, British Overseas Airways Corporation  Corporation   (BOAC) and British European Airways Corporation (BEA) with two much smaller  regional airlines, Cambrian Airways and and Northeast  Northeast Airlines Airlines.. British Airways acquired the supersonic Concorde in 1976, operating it on transatlantic services. The same year it assumed sole operation of international flights to North America and Southeast Asia from of Virgin Atlantic Airways in 1984 began a tense rival British Caledonian. Caledonian. The formation of Virgin rivalry, which led to "one of the most bitter and protracted libel actions in aviation Marshall, history".[2] Under the leadership of Chairman Sir John King and CEO Colin Marshall, British Airways was privatised was privatised  in February 1987, almost thirteen years after its formation, and effected the controversial takeover of British Caledonian in July 1987. Following privatisation, British Airways entered a period of rapid and unprecedented growth, leading to the use of the slogan "The World's Favourite Airline", and dominated its domestic rivals during the early 1990s. Faced with increased competition and higher  costs in the BobinAyling Aregional yling ledEuropean a restructuring effort, leading to trade union clashes; the mid-1990s, carrier also CEO invested airlines, courted international

 

airline partnerships, and attempted a controversial ethnic livery  livery rebranding campaign. In the early-2000s, CEO Rod Eddington  Eddington implemented further cost cuts, the retirement of  Concorde, and the removal of ethnic liveries. Under  Willie Walsh, Walsh, who became CEO in 2005, British Airways faced a price-fixing scandal, moved its primary hub to  to Heathrow Terminal 5, 5, and experienced threats of o f industrial action, leading to a strike in March 2010. On 8 April Ap ril 2010, it was confirmed that British Airways and Iberia Airlines had agreed to a merger, forming the International Airlines Group, Group, although BA would continue to operate under its current brand.[3] The combined airline will become the Airlines) in terms of  world's third-largest carrier (after Delta (after Delta Air Lines and American Airlines) annual revenue.

Contents [hide] hide] • • • •

1 Origins and formation 2 1970s 1970s:: Consol Consolidation idation and Concorde 3 1980s: Privatisation Privatisatio n and dirty tricks 4 1990s: Changes, subsidiaries subsidiarie s and growth



5 1996: Bob Ayling era 6 2000: Rod Eddington era 7 2005: Willie Walsh era 8 2009: Financial difficulties difficultie s and merger  9 20 201 10 10 Ref Referen erences ces 11 Bib Bibliog liograp raphy hy 12 Fur Furthe therr rea readin ding g



13 Ext Externa ernall link linkss

• • • • • • •

[edit] edit] Origins and formation Main articles: Imperial Airways and British Airways Ltd.

Imperial Airways  Airways Handley Page H.P.42. H.P.42. Hanno in 1931 On 31 March 1924, Britain's four pioneer airlines that started up in the immediate post war period— Handley Handley Page Transport, Transport, British Marine Air Navigation Co Ltd, Ltd, Daimler  Airways and Instone Air Line  Line Ltd—joined together to form Imperial Airways Limited,[4] developing routes throughout the British Empire to India, some parts of Africa and later 

 

to Canberra, Canberra, Australia.[5] Meanwhile a number of smaller UK air transport companies had  begun operating, and by 1935 many of these had merged to form the original privately owned British Airways Ltd.  [6] Following a government review, Imperial Airways and British Airways were nationalised in November 1939 to form the British Overseas [6][7][ [7][8] 8] Airways Corporation (BOAC).[6]

BOAC  D.H. Comet 1 at BOAC at  Heathrow Airport in 1953 Post-war, BOAC continued to operate the majority of long-haul services in Britain, Britain ,[9] other than routes to South America; A merica; these were flown by  by British South American Airways,, which was merged back into BOAC in 1949. Airways 1949.[10] Continental European and domestic flights were flown by a new nationalised airline, British European Airways Corporation (BEA), which compulsorily took over the scheduled services of existing UK  [5]

independent airlines. On flight 2 Maywith 1952, becameComet the world's to operate Comet   1 wasfirst fromairline London to  jet airliners; the inaugural theBOAC the   de Havilland [11][12] [11][12] Johannesburg. Johannesburg.  However, the Comet's service introduction was plagued by structural [13][14] leading to its replacement with the upgraded Comet 4  problems and accidents, accidents,[13][14] [6][15][ 16] [6][15][16] models in 1958.

BOAC  Boeing 707–400 at Heathrow Airport in 1960 BOAC holiday  business  business meant change for the airline industry and The birth of the mass package mass  package holiday BEA met the challenge by establishing BEA Airtours in 1970. In 1967 the government established a committee of inquiry into Civil Aviation under Sir  Ronald Edwards, the Edwards Committee reported in 1969 and one of the recommendations of the Edwards committee was the formation of a National Air Holding Board to control finances and polices of the two corporations. corporations.[17] The recommendation was enacted in 1971 with the passing of the Civil Aviation Act 1971 which formed a British Airways Board to control all the activities of BOAC and BEA. BEA .[18] In 1972, the BOAC and BEA managements were combined under the newly formed British Airways Board,[19] with the physical operations of the separate airlines coming together as British Airways on 1 April 1974, under the guidance of  David Nicolson as

 

[20][21] At the time it was the biggest merger to happen in the Chairman of the Board.[20][21] aviation industry, creating the world's largest network of routes for the new unified company to harness.[22]

In 1975, British Airways was headquartered in the Victoria Terminal in London. Its international division was headquartered at the Speedbird House by Heathrow Airport, while its European division was headquartered at Bealine House, Ruislip, Middlesex. The regional division was headquartered in Ruford House, Hounslow.[23]

[edit] edit] 1970s: Consolidation and Concorde See also: Concorde. Concorde.

British Airtours Boeing 707–400 landing at Manchester Airport  Airport in 1974 The newly formed British Airways had inherited a mix of aircraft from its predecessors. It quickly retired the Standard VC10s  VC10s that had come from BOAC and the last Vickers [24] [24][25] [25] Vanguards from BEA. It also ordered the  the Hawker Siddeley 748 for use on Scottish routes to enable the Vickers Viscount  Viscount to be retired.[24] The first Lockheed L-1011 TriStar   was delivered in October 1974, and introduced in January 1975;[26] more TriStars were [24][27] 27]  The management of British Airways resisted political ordered in following years.[24][  pressure to purchase the new  new Airbus A300, A300, stating that it had no requirement for the [28] aircraft; this rejection complicated Britain's integration into the European Union. [29] Instead, the company planned to acquire American-made planes such as the  the Boeing 757; 757; [30] in 1976 the British government approved the purchase of multiple multiple  Boeing 737 aircraft. [31] An innovation on 12 January 1975 was the British Airways Shuttle service from [24]

its on Heathrow which allowed a walk-on no reservation service service. .  From formation to in Glasgow, 1974, British Airways aeroplanes carried a Union Flag  Flag  scheme painted [32][33] their tail fins.[32][33]

British Airways  Airways Boeing 747–100 at Heathrow Airport in 1979

 

The Secretary of State for Trade Trade,, Peter Shore Shore,, conducted a review of the Government's aviation policy, and in 1976 he announced a new "spheres of influence" policy that ended [34][35] [35] dual designation for British airlines on all long-haul routes. [34] As a result, British Airways and British Caledonian, Caledonian, the second-biggest airline in Britain, were no longer   permitted to run competing scheduled services on the long-haul routes. British Caledonian had to withdraw from the East African routes as well as from the London[36][37] 37]  New York and London-Los Angeles routes in favour of BA.[36][  In return, British Caledonian became the sole British flag carrier to the entire South American mainland, Venezuela.. taking over routes formerly served by British Airways to  to Colombia, Colombia, Peru and Venezuela [34][ [34][38] 38]

British Airways  Airways Concorde at Heathrow Airport in 1980 In 1976, British Airways commenced flying the  the  Concorde, Concorde, making it one of only two airlines to own and operate the  the supersonic Aerospatiale-BAC jetliner.[24] Simultaneously with Air France, France,[39] BA inaugurated the world's first supersonic passenger service on 12 [40][41] a daily service between Heathrow and  and  New  New York becoming York becoming one of the January,[40][41] [44][45] [42][43] [42][43] Initially, Concorde was a financial burden, [44][45]  required of the airline's hallmarks. national carrier by the government, and it attracted criticism from the press as a white [46][47] elephant.[46][47] Several significant destinations suggested for the Concorde, such as Tokyo, Japan, and Sydney, Australia never emerged as viable in reality.[48] In 1981, Sir John King, King, later Lord King, was appointed Chairman of British Airways [6][24] 24]  King recognised the with the mission of preparing the airline for privatisation. privatisation.[6][ [49]  purchased them outright from the  prestige that Concorde brought to the airline, airline ,  purchased [46][50] [46][50]

government, and was turning a profit within a year . According to British Airways' management the aircraft broke even on flights holding around 40–45% of passenger  capacity; in 1985 the average passenger capacity in use per flight was at 65%.[51] BA used [52][53] [53] guaranteeing a certain number of Concorde Concorde to win business customers,[52] upgrades in return for corporate accounts with the airline—a key factor in winning  business from transatlantic competitors. Although the carrier did not disclose specific numbers, media reports estimated that the Heathrow to New York service made an annual £20 million operating profit by the early 2000s. [50]

[edit] edit] 1980s: Privatisation and dirty tricks

 

British Airways main office at Heathrow Airport in the 1980s [6][24] As British Airways headed towards privatisation, privatisation,[6][24]  Sir John King hired Colin Marshall  Marshall  as CEO in 1983. King was credited with transforming the loss-making giant into one of  the most profitable air carriers in the world, boldly claiming to be "The World's Favourite Airline", while many other large airlines struggled.[54] The airline's fleet and route map were overhauled in the early ea rly years of King's tenure,[6] with brand and advertising experts  being recruited to change the airline's image.[6] Over 23,000 jobs were shed in the early [6][55] though King managed the considerable trick of boosting staff morale and 1980s,[6][55] modernising operations at the same time. [56] Offering generous inducements for staff to leave led to record losses of £545 £5 45 million, to the cost of taxpayers but to the benefit of the [57][ [57][58] future privatised company. 58]

British Airways Concorde at Basel Mulhouse Airport in 1986 At Marshall's direction, the airline consolidated most of its long-haul operations in 1986, [61][62] [59] including Concorde services,[60] at the newly constructed Heathrow Terminal 4. 4.[61][62] Terminal 4 would remain as BA's hub at Heathrow Airport for the next 22 years. [63] Due [64][65] [65] in part to a recession and rising fuel prices,[64] aircraft such as the Hawker Siddeley [59][66] [66] Trident,, Vickers Super VC10 and Boeing 707 were quickly phased out of service, [59] Trident [67][68] [68] and planes such as the  the Boeing 737  737 were acquired in their place. place .[67] In an effort to [69] increase the use of the operational Concorde fleet, fleet,  King allowed the planes to be [51][70] 70] [51][ At the end of 1985, British Airways regarded chartered for special services. services. Concorde as its undisputed flagship, finding it profitable p rofitable as well as prestigious. prestigious.[71] The flag carrier was privatised and floated on the London Stock Exchange in February [6][59] 59][72] [72] 1987 by the Conservative government,[6][ the initial share offering being nine times [73] oversubscribed.  The privatisation of British Airways was regarded as very successful  by industry observers, perhaps the most successful of a series of companies divested by the state in this era. [74] Four months later, in July 1987, BA announced the controversial [75][76] 76] The acquisition led to takeover of Britain's "second" airline, British Caledonian. Caledonian.[75][ [77] concerns regarding competition; within the industry it was widely acknowledged as a

 

mutually agreed rescue deal to avoid the latter's collapse. [78] The Caledonian name was as Caledonian kept alive, the charter subsidiary British Airtours being rebranded as  Airways.. In 1992, BA absorbed Gatwick-based British carrier  Dan-Air .[79] Airways

British Airways  Airways L-1011 TriStar in TriStar in Landor livery in 1986 Soon after British Airways' privatisation, Richard Branson' Branson's Virgin Atlantic Airways  Airways  [80]  began to emerge as a competitor on some of BA's most lucrative routes. Following of Saddam Hussein  Hussein  Virgin's highly publicised mercy mission to Iraq to fly home hostages of Saddam [81] in 1991, King is reported to have told Marshall and his PA Director David Director David Burnside to [82] "do something about Branson". Branson". This began the campaign of "dirty tricks" that ended in [83][84] [84] Branson suing King and British Airways for libel for libel in 1992.[83] King countersued [85] Branson and the case went to trial in 1993. British Airways, faced with likely defeat, settled the case, giving £500,000 to Branson and a further £110,000 to his airline; [2][86] 86]  Branson divided the furthermore, BA was to pay the legal fees of up to £3 million million..[2][ compensation among his staff, the so-called "BA bonus."[87] British Airways and Virgin Atlantic continued to be noticeably no ticeably bitter and active rivals for many years afterwards.[88] [89][90] [89][ 90]

[edit] edit] 1990s: Changes, subsidiaries and growth

British Airways  Airways Boeing 747-400s at Heathrow Airport in the 1990s During the 1990s, British Airways became the world's most profitable airline under the [91][92] [92] slogan "The World's Favourite Airline". [91] In 1992, it bought the small German [93][94] [94] By the time it domestic airline Delta Air Transport and renamed it Deutsche BA. BA.[93] was sold in June 2003, Deutsche BA was operating 16 Boeing 737s and had 800 staff .[5] [95] British Airways also entered the French market in 1994 by purchasing a 49.9% stake [97][98] of Air Liberté in 1997,[97][98] seeking to challenge in TAT European Airlines, Airlines,[96] and 70% of Air [99] the dominance of Air of Air France. France.

 

1993 was a highly significant year of expansion and change for British Airways, [100] as it Qantas,,[101] a 24% stake in American airline  purchased a 25% stake in Australian airline  airline Qantas acquired Brymon Airways to form BA Connect. Connect.[103] BA had USAir ,[102] and wholly acquired   planned to acquire as much as a 44% share in USAir, but backed down following a lack  [104][105] [105] developing a significantly larger presence in of approval from the US government; [104] the North American market remained a major priority of British Airways throughout the 1990s.[106] Another crucial event in 1993 occurred as BA formed British Asia Airways Airways,, a subsidiary based in the Republic of China (Taiwan), to operate between London and [107][108] 108] Taipei Taipei..[107][ Owing to political to political sensitivities sensitivities,,[109] British Asia Airways had not only a  being replaced by the different name but also a different livery, the Union Flag  Flag tailfin  tailfin being characters 英亞 (English Asia). Chinese characters 

British Asia Airways Boeing 747–400 in Landor livery variant at Narita at  Narita International Airport in the 1990s Perhaps the most symbolic change to British Airways in the turbulent year of 1993 came when Lord King stepped down as chairman of the company and was replaced by former  Ayling,, who later took on the role of CEO, was appointed deputy Colin Marshall. Marshall.[110] Bob Ayling Managing Director  Director by by Marshall. Lord King was appointed as President P resident of British [111] a role created specifically for him and which he retained until his death in Airways, [112] [112][113] July 2005. [113] In 1995, British Airways began planning for its future corporate headquarters at Harmondsworth Moor ,[114] to supplant its then-headquarters at Speedbird House at Heathrow Airport.[115]

British Airways  Airways BAC 1-11 in 1984–1997 Landor livery at the Imperial War Museum Duxford British Airways also used some of its prosperity to upgrade and replace much of its fleet. [118][119] [116][117] 117] the Boeing 777, 777,[118][119] Aircraft acquisitions included the Boeing 747-400 and [116][ aimed to phase out the remaining  remaining Lockheed L-1011 TriStars and McDonnell Douglas [116] DC-10s.. DC-10s Six of the disposed TriStars ended up seeing service as aerial refuelling tankers in the Royal Air Force. Force.[120] Another acquistion was the company's first purchase [121][122] 122] from Airbus for members of the Airbus A320 family;[121][

 

A new trend in aviation competition emerged in Britain during the 1990s in the form of  the budget the  budget airline airline;; new companies such as  as Ryanair and Ryanair and EasyJet emerged,[123] rising to  prominence using a no-frills and low-price approach to gain marketshare from the [124][125] In the wake of deregulation, these airline companies would traditional carriers.[124][125] [1][126] A  prove to be an increasing source of competition domestically to British Airways.[1][126] small handful of short routes also began to come under effective pressure from modern high speed rail systems, such as the Eurostar service Eurostar service between London, Paris, and [127][ 128] Brussels..[127][128] Brussels

[edit] edit] 1996: Bob Ayling era

British Airways  Airways Boeing 777–200 in Landor livery in the 1990s In 1996, British Airways, with its newly appointed CEO Bob Ayling, entered a period of  [129][130] 130] and a strong financial turbulence due to increased competition, high oil prices prices,,[129][ [131]  pound. The airline's management clashed with trade unions over planned changes, Ayling taking a hardline stance; [132] the resulting disruption from the confrontations cost [133][134] 134] With several strikes and BA's the company hundreds of millions of pounds.[133][ [135][136] [136] [135] investors became frustrated. Over time, the company restructuring plans stalling, was seen as being less active and successful than its peak in 1 1993, 993, causing its share value [137][138] 138] [137][ to suffer. In 1996, relations between British Airways and USAir , in which BA held a stake then [139][140] 140] valued at $500 million, soured,[139][ despite Ayling's preference to "...remain a major  [141] [102][142] 142] Ayling had also investor in USAir",  and BA later sold its share in the company.[102][ [143][144] 144] [143][ however this  pursued partnership and antitrust immunity with American Airlines, Airlines, was unsuccessful due to the conditions con ditions placed on the deal by regulatory authorities,[145] the most painful of which would have h ave been the sacrifice of landing slots at Heathrow,[146] [147] and in part caused the breakdown of the partnership with USAir as well. [145]

British Airways  Airways Boeing 777-200ER with 777-200ER with ethnic livery introduced in 1997

 

"We fly the British Flag, not these awful things." Margaret Thatcher [148]

In 1997, Ayling dropped BA's traditional Union Flag tailfin livery in favour of  of world world [149] design tailfins, tailfins, in an effort to change its image from a strictly British and aloof carrier  to a more cosmopolitan airline; several members of the senior management had expressed [150]

 The company quickly found negative opinions nationalism within the company. itself under fire byof the media for making hundreds of employees redundant while squandering capital on an expensive rebranding project. [151] The plan was not as [134][152] 152] as several influential people thought the company had successful as intended, intended,[134][  betrayed the British identity and spoke out against the change from the traditional Union Flag scheme, including the former Prime Minister Margaret Minister Margaret Thatcher .[153] The livery controversy continued when British Airways' long-time rival, Virgin Atlantic, Atlantic, took advantage of BA's public relations blunder and adopted the British flag along with the slogan "Britain's national flagcarrier", recognising the value and prestige of bearing the flag.[154] Ayling slowed the process, eventually declaring the fleet would sport a dual livery; half a Union Flag design, half ha lf the world design tailfins. On 6 June 199 1999, 9, he announced that all newly-delivered and overhauled BA planes would be painted with the Union Flag, based on a design first [33][ used on Concorde, signifying an end to the once155]  prestigious cosmopolitan branding.[33][155] Benefits during Ayling's leadership included cost savings of £750 million[134] and the establishment of the successful, but highly subsidised, Go in 1998.[156] Go was a low-cost [129][157] carrier  intended to compete in the rapidly emerging "no-frills" segment.[129][157] After four  [158] years of successful operations British Airways searched for a buyer for Go,  eventually the airline was sold off to venture capitalists cap italists 3i and later merged with  with  EasyJet. EasyJet.[159] Ayling also sought a reduction of capacity, ca pacity,[160] cancelling Boeing 747–400 orders in favour of the Boeing 777-200ER and rationalising BA's short-haul fleet with an order for the Airbus A320 family.[161] However at this time BA was in discussions with Airbus regarding the distant Airbus A380 A380,, a very large passenger jet. [162] In September 1998, British Airways  became a founding member of the Oneworld  Oneworld global airline alliance, along with American Airlines, Canadian Airlines Airlines,, Cathay Pacific Pacific,, and Qantas Qantas..[163] As part of the marketing alliance, member airlines combined frequent-flyer program benefits and streamlined inter-airline connections.[163] Waterside, Waterside, the current British Airways head office, officially [164] opened in 1998.

[edit] edit] 2000: Rod Eddington era

 

British Airways  Airways Boeing 767-300ER with 767-300ER with ethnic livery In 1999, British Airways reported a 50% drop in profits, its worst since privatisation.[165] [166] This was compounded by the majority of BA subsidiary companies running at heavy losses as well; the company reacted by selling several. [167] In March 2000, Bob Ayling was removed from his position and, in May, British Airways announced  announced  Rod Eddington  Eddington  as his successor. Eddington set about the termination of several investment programs, such as in Olympic Airways Airways,,[168] and cutting the workforce, the process being taken still 170] [129][169][170] 2001.[129][169][ BA's share further in response to the slump caused by the  the 9/11 attacks  attacks in 2001.  price dropped from 760p in May 1997 to only 150p in September 2001, showing how heavily the company had been hit. hit.[171]

British Airways Concorde G-BOAB in storage at Heathrow Airport With the crash of Air of Air France Flight 4590 4590  in 2000,[172] 9/11, and escalating maintenance expe nsive safety modifications costs,[173] the future of Concorde was limited, despite expensive made after the Air France accident. It was announced on 10 April 2003 that in October  that year BA would cease scheduled services with Concorde, due to depressed passenger  [174][ 175] The last commercial Concorde flight from New York to London was on numbers.[174][175] 24 October 2003.[43] The airline retained ownership of eight Concordes, which were [176][ 177]  placed on long-term loan to museums in the UK, U.S. and Barbados.[176][177] During Eddington's leadership, there were several other fleet changes. A publicly wellreceived decision of Eddington's was to completely end the use of ethnic liveries on aircraft, announcing in May 2001 that all of BA's fleet would be repainted in a variant of  [178]

 Boeing 747-200 and several Boeing 767 767   the Union Flag design used on Concorde. [179][ 180] aircraft were retired in an effort to cut costs, costs ,[179][180] and interest was expressed in the [181][182] 182] upcoming Boeing 7E7 and the since-cancelled Boeing Sonic Cruiser .[181][

British Airways  Airways Airbus A320-200 in Union Flag livery From 2002, BA strongly marketed the full-service nature of its remaining domestic flights[183] by the use of principal airports, and provision of complimentary food and pricing,[183] even drink.[183] This came as a response to low-cost operators' aggressive pricing,

 

though its main full-service UK rival bmi rival bmi  later also abandoned some "frills" on its domestic network. In June 2003, the German subsidiary, Deutsche BA, was sold to investment group Intro Verwaltungsgesellschaft. [184] On 8 September 2004, British Airways announced that it was to sell its 18.5% stake in Qantas, Qantas, but would continue the Routes..[185] The £425 alliance (such as sharing revenue), particularly on the  the  Kangaroo Routes million raised was used to reduce the airline's debt.[186] Lord Marshall, who had been appointed a life peer in peer in 1998, retired as Chairman in July 2004 and was replaced by Martin Broughton, former Chairman of  British American [187][188] Tobacco..[187][188] Tobacco On 8 March 2005, Broughton announced that former  Aer Lingus CEO Willie Walsh would take over from Rod Eddington upon his retirement in September  2005. Walsh pledged to retain the full-service model on its much reduced UK network as a means of distinguishing BA from the competition, and that customers were willing to [189][190] [190]  pay extra for higher service levels. [189]

[edit] edit] 2005: Willie Walsh era

British Airways Boeing 747–400 in Oneworld  Oneworld livery at Heathrow Airport In September 2005, new CEO Willie Walsh announced dramatic changes to the management of British Airways, with the aim of saving £300 million by 2008, the cost of  the airline's move to its new hub at Heathrow's Terminal 5.[191] Walsh presided over the Connect  to Flybe, stating "Despite the best efforts of the entire team at BA sale of BA of BA Connect Connect, we do not n ot see any prospect of profitability in its current form."[192] BA retained a 15% stake in Flybe following the sale. [193] In June 2006, the Office of Fair Trading (OFT) and the United States Department of  Justice (DOJ) began investigating allegations that BA was  was  price-fixing  price-fixing fuel surcharges on [194] The allegations first came to light when Virgin Atlantic reported the long haul flights. events to the authorities after it found staff members from BA and Virgin Atlantic were colluding. Virgin Atlantic was later granted immunity by both the OFT and DOJ. The  price-fixing probe led to the resignation of commercial director Martin George and communications chief Iain Burns. Burns.[195] "Although I did not have any direct contact with BA in relation to passenger fuel surcharges, I regret that, on becoming aware of the discussions, I did not take steps to stop them." Steve Ridgway, CEO of Virgin Atlantic[196]

 

On 1 August 2007, British Airways was fined £121.5 million for price-fixing by the OFT, and the US DOJ subsequently announced anno unced that it would also fine British Airways US$300 million (£148 million) for price-fixing. [197] Although BA said fuel surcharges were "a legitimate way of recovering costs", in May 2007 it had put aside £350 million for legal fees and fines.[198] In July 2009 Steve Ridgway, the CEO of Virgin Atlantic, admitted he [196][199] knew about the illegal price-fixing at his h is airline and did nothing to stop it it..[196][199]

The Compass Centre Centre,, when it was a British Airways facility, in 2006 In January 2008, BA unveiled its new subsidiary OpenSkies which took advantage of the liberalisation of transatlantic traffic rights, flying non-stop between major European cities and the United States.[200] Operations between Paris and New York began with a single Boeing 757 in June 2008. [201] On 2 July 2008 British Airways announced that it had agreed to buy French airline L'Avion for £54 million. The deal would result in the full integration of L'Avion with OpenSkies by early 2009. [202]

OpenSkies  Boeing 757–200 at Kennedy International Airport OpenSkies On 14 March 2008 Heathrow Terminal 5, 5, built exclusively for the use of British Airways at a cost of £4.3 billion, was officially opened by Queen Elizabeth II. II.[203] Upon opening to  passengers on 27 March 2008 serious problems immediately arose, many from staff  confusion.[204] The baggage handling system failed completely, resulting in seven flights departing with no baggage loaded. loaded .[205] In the first five days, a backlog of 28,000 bags built up and over 300 flights were cancelled.[206] Walsh commented that it "was not our finest me". ". Two directors left the company on 15 April 2008 as a hour ... the buck stops with me direct result of the poor transition into BA's new terminal. Despite the announcement of  record profits, Walsh declined his annual bonus over the Terminal 5 fiasco .[207] By October 2008 were operations running smoothly, and further long-haul services were [208]

transferred to Terminal 5.

 

[edit] edit] 2009: Financial difficulties and merger

British Airways operations at Heathrow Airport A irport On 30 July 2008, British Airways and Iberia Airlines announced a merger plan that would result in the two airlines joining forces in an all-stock transaction. The two airlines would retain their separate brands similar to KLM and Air France in their merger  agreement.[209] In the beginning of August 2008, American Airlines  Airlines announced an alliance with BA and Iberia, allowing the two carriers to fix fares, routes, and schedules together. [210]

In addition to the existing talks for a merger with Iberia and for antitrust immunity with Iberia and American Airlines, it was announced on 2 December 2008 that British Airways had entered into talks about a possible merger with Qantas. Qantas. If British Airways, Iberia and Qantas were to combine co mbine as one company it wou would ld create the largest airline in the world.[211] However, on 18 December 2008, the talks with Qantas ended over issues of  ownership in the aftermath of a merger. [212] On 27 October 2009 Willie Walsh indicated that talks regarding the merger with Iberia were close to finalising, and that the decision "would be made before the end of the year".[213] "Aviation remains in recession ... We were quick to respond to the crisis by taking out excess capacity and, at the same time, driving down unit costs by 5.2 per cent ... With revenue likely to be £1 billion lower this year, we can't stand still and further cost reduction is essential." [148][ 214] Willie Walsh, CEO of British Airways[148][214]

British Airways and Iberia announced their merger in April 2010, 20 10, creating the International Airlines Group In June 2009, British Airways contacted some 30,000 30,0 00 employees in the United Kingdom, including Walsh, asking them to work without pay over a period of between one week  and one month to save money. [215] British Airways took a significant victory at the High Court against against  union opposition to company restructuring plans, including a reduction in

 

cabin crew,[216] on 5 November 2009. On 6 November 2009 the worst ever half-year loss [217][218] [218] in British Airways' history was reported to the public.[217] On 14 December 2009 200 9 cabin crew at British Airways voted in favour o off strike action over  [219] [219][220] [220] the Christmas period over job cuts and changes to staff contracts. On 17 December  the ballot was ruled invalid by the High Court due to voting irregularities and the strike did not take place.[221] The threat of industrial action and further strikes lingered into early 2010.[222] On 6 March 2010 the Unite union announced rounds of strike action.[223] More than 80 planes were grounded at  at Heathrow Airport  Airport alone on the first day; however, British Airways officials stated with confidence that 65% of flights would be undisturbed.[224] British Airways and Iberia Airlines reached a preliminary agreement to merge in  November 2009.[225] Then on 8 April 2010, it was confirmed the airlines had signed an agreement to merge,[226] making the combined operation the third largest commercial airline in the world by revenue. revenue .[3] The newly merged company will be known as Group,, although both airlines will continue to operate under their  International Airlines Group [226] The merger is believed to be worth approximately £5 billion and the current brands. new group will have over ove r 400 aircraft and fly to over 200 destinations across the world. [227] As part of the deal, British Airways shareholders will take a 55% stake in the new company, which will be headquartered in London, with the remainder being owned by Iberia.[226] Industry analysts believe that the merger makes a three-way tie-in with American Airlines more likely. [228]

[edit] edit] 2010 by adding to it. it. This section is empty. You can help by 

[edit] edit] References 1.

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222.

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[edit] edit] Bibliography Beith, Richard (2004). British South American Airways 1946–1949: A Sourcebook for Aerophilatelists . Richard Beith Associates. ISBN  ISBN 0952067544 0952067544.. Dearlove, John; Saunders, Peter R. (2000). Introduction to British politics . Polity. ISBN 0-7456-2096-5 ISBN  0-7456-2096-5.. http://books.google.com/books? id=CpMwQzKp21IC&lpg=PA532&ots=XGUf2qzx8&dq=&pg=PA532#v=onepage&q=&f=false.. GUf2qzx8&dq=&pg=PA532#v=onepage&q=&f=false Doganis, Rigas (2006). The Airline Business. Routledge. ISBN ISBN  0415346142 0415346142.. Fisher, Colin; Alan Lovell (2008).  Business Ethics and Values: Individual, Corporate and International Perspectives. Pearson Education. ISBN  0273716166.  ISBN 0273716166. Haig, Matt (2005). Brand Failures: The Truth About The 100 Biggest Branding  •









Mistakes of All Time . Kogan Page Publishers.   0749444339. 0749444339 . Publishers. ISBN Hanlon, Pat; James Patrick Hanlon (1999). ISBN  Global Airlines: Competition in a Transnational Industry. Butterworth-Heinemann.  Butterworth-Heinemann. ISBN  ISBN 0750643501 0750643501.. Hayward, Keith (1983). Government and British Civil Aerospace: A Case Study in Post-War Technology Policy . Manchester University Press. ISBN  ISBN 0719008778. 0719008778 . Martyn, Gregory (1996). Dirty tricks: British Airways' Secret War Against Virgin ISBN  0751510637. 0751510637.  Atlantic. Warner. ISBN Millward, Liz (2008). Women in British Imperial Airspace, 1922–1937 . McGillISBN  0773533370. 0773533370. Queen's Press. ISBN  Norris, Guy; Mark Wagner (2005). Airbus A380: Superjumbo of the 21st Century . Zenith Imprint.  Imprint. ISBN  ISBN 076032218X 076032218X.. Owen, Kenneth (2001). Concorde: Story of a Supersonic Pioneer . Science Museum. http://books.google.co.uk/books? •











id=VzNUJlX7CXoC&printsec=frontcover&dq=Concorde: +story+of+a+supersonic+pioneer&source=bl&ots=Huy0WKzJ2z&sig=WSLsp5lmJJ m4wbCcJlNA3B5HoUM&hl=en&ei=nXrHS_OaLqbqmwOl4dXkDA&sa=X&oi=bo ok_result&ct=result&resnum=2&ved=0CA0Q6AEwAQ#v=onepage&q&f=false..  ok_result&ct=result&resnum=2&ved=0CA0Q6AEwAQ#v=onepage&q&f=false Pigott, Peter (2003). Taming the Skies: A Celebration of Canadian Flight . Dundurn Press. ISBN ISBN  1550024698. 1550024698 . Simons, Graham M. (1999).  It Was Nice to Fly with Friends! The Story of Air   Europe. GMS Enterprises. Thomson, Adam (1990). High Risk: The Politics of the Air . Sidgwick and Jackson. Votteler, Thom (1988). International Directory of Company Histories, Volume 43. St. James Press. ISBN ISBN  1558624619 1558624619..  Woodley, Charles (2004). BOAC: An Illustrated History. Tempus. ISBN  0752431617.. ISBN 0752431617 •









 

[edit] edit] Further reading Campbell-Smith, Duncan (1986). The British Airways Story: Struggle for TakeOff . Hodder and Stoughton. ISBN  0340394951.. ISBN 0340394951 Corke, Alison (1986). British Airways: the path to profitability. Pan. ISBN 0330295705 ISBN  0330295705.. •



Bishop, Matthew; John Anderson Kay, Colin P. Mayer (1994). Privatization and  0198773447.. economic performance. Oxford University Press. ISBN  ISBN 0198773447 Donne, Michael (1991). Above us the skies: The story of BAA . Good Books. ISBN  0946555192.. ISBN 0946555192 Marriott, Leo (1998). British Airways. Plymouth Toy & Book. ISBN ISBN  188266339X 188266339X..  Moore, Virginia Marianne (1989). Privatization experiences of Britain and  Canada: the airlines as a case study . University of Warwick. Penrose, Harald (1980). Wings Across the World: An Illustrated History of British 0304306975.  Airways. Cassell. ISBN  ISBN 0304306975. Reed, Arthur (1990). Airline: the inside story of British Airways. BBC Books. ISBN  0563207183.. ISBN 0563207183 British Airways (1974). British Airways annual report and accounts . British •













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