British Caledonian in The 1970s - Attaining Success

Attaining Success

By 1978, BCal 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 1970s' oil crisis, the company's core scheduled operation was growing again with new widebodied aircraft and routes being added and schedules being expanded. Business was booming with planes being fuller than at any time in the firm's history. The airline recorded a pre-tax profit of £12.2 million during its 1977/78 financial year to 31 October 1978. This translated into a £10 million retained profit. It was the company's best financial result since its formation back in November 1970. BCal's senior management decided to allocate £644,000 of the retained profit to a new profit-share scheme 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 one of the first of its kind in the UK airline industry.

BCal also became a "scheduled service only" airline during 1978, 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. There were two reasons 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.

• 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.

1978 was also the first year BCal operated the majority of its scheduled services plying the prime long-haul routes to West Africa and South America with 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. During that period, the airline also resumed its Edinburgh—Newcastle—Copenhagen service, which it had abandoned in 1974.

During 1978, Abidjan and Birmingham joined BCal's scheduled route network. At the start of the 1978/79 winter timetable period, Benghazi 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 profitable, oil-related business travel. 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 enabled it to cut out intermediate stops and offer its passengers a more convenient, direct routeing that took less time. BCal moreover replaced two-class One-Elevens operating on the Tripoli route with 707s.

In early 1978, BCal introduced an updated livery.

1978 was furthermore the year Sir Adam held the chairmanship of the Association of European Airlines (AEA).

In addition, the British Airports Authority 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 11 telescopic, widebody-compatible loading bridges. 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.

Besides, the year before, the Government had announced its intention to take pro-active steps to help ensure Gatwick's development as a genuine alternative to Heathrow. 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 in Continental Europe 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.

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 and Genoa. 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 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. The airline had planned to commence new short-haul scheduled services from Gatwick to Copenhagen, Gothenburg, Oslo and Stockholm during summer 1978, using the licences the CAA had awarded it the year before. 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. 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. 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.

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 by 1 April 1979, banning whole-plane charters at Heathrow 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 Traffic Distribution Rules". It came into effect on 1 April 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.

Another pro-active measure the Government took to aid BCal's and Gatwick's development at the time was to grant permission for Airlink, a high-frequency helicopter shuttle service linking both of London's main airports. The new helicopter shuttle service linking London Heathrow and London Gatwick was inaugurated on 9 June 1978.

This service was operating 10 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, provided the cabin crew and was in charge of reservations and ticketing. British Airways Helicopters, the wholly owned helicopter subsidiary of BA whose headquarters were located at Gatwick, provided the flightdeck crew and engineering support.

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.

1978 was also the year BCal set up a task force headed by Gordon Davidson, BA's former Concorde director, 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 two 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 de Janeiro 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.

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 the remaining two "white tail" aircraft. The bid was not successful.

However, BCal eventually arranged for two aircraft to be leased from BA and Aérospatiale respectively and to have them maintained by either BA or Air France. It became necessary to find additional work for BCal's envisaged two-strong Concorde fleet to increase the aircraft's utilisation, thus permitting a cost-effective operation. Therefore, BCal decided to use the second aircraft to launch a supersonic service between Gatwick and Atlanta, with a technical stop at either Gander or Halifax. It also considered using the aircraft to serve Houston and points on its South American network at a later stage.

Both supersonic services were to be launched at the start of the 1980 summer timetable period.

In 1979, the airline took delivery of its delayed third and fourth McDonnell Douglas DC-10-30 widebodied aircraft during the first and third quarter. 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 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. 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 was added to the Newcastle—Amsterdam sector of BCal's Glasgow—Newcastle—Amsterdam regional route.

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

This was also the time BCal came up with a 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. Excluding BCal's existing four European destinations, it envisaged linking Gatwick with 20 additional points on the Continent. These services were to be operated during off-peak times, initially using the airline's existing narrowbodied equipment. BCal was evaluating both the McDonnell Douglas MD-80 narrowbody as well as the Airbus A310 and Boeing 767 widebodies as suitable long-term replacements for its existing narrowbodied aircraft on these routes.

BCal's setbacks during 1979 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 in May that year.

The grounding of the worldwide DC-10 fleet necessitated the short-term lease of a 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. In addition to these aircraft, a 707-120B was leased during that period as well to cover the capacity shortfall.