British Caledonian in The 1980s - Launching A New Narrowbodied Aircraft

Launching A New Narrowbodied Aircraft

In 1983, BCal became the first non-French airline to order the Airbus A320. BCal placed a firm order for seven A320s and took an option on another three, with deliveries of the aircraft on firm order due to commence during the spring of 1988. The options were subsequently converted into firm orders as well.

Although the A320 was bigger than BCal's actual requirement, it was the technologically most advanced contender with 27% lower seat-mile costs than the BAC One-Eleven. Airbus Industrie had also offered the airline a generous discount to sign up as a launch customer. Having BCal launch a brand-new narrowbodied aircraft, gave the manufacturer added credibility in its global sales campaigns. This was of particular importance in the all-important US market, which Airbus needed to penetrate with its new aircraft if it wanted to break the stranglehold archrival Boeing had enjoyed in this market segment with its venerable 737 for over one-and-a-half decades. Airbus knew that the major US carriers that were prime targets of its North American sales campaign would be suspicious of the new aircraft's commercial credentials if state-owned, foreign flag carriers like Air France and Lufthansa were the only launch customers it had. Therefore, having a wholly private, successful independent airline with a major, worldwide scheduled presence like BCal order a brand-new, technologically advanced aircraft came in handy.

BCal intended to use its A320s to replace the ageing One-Elevens on its short-haul European and medium-haul North African routes.

1983 turned out to be another tough year for BCal. Continuing restrictions on the airline's South American services and other schedule cutbacks in response to the early 80s recession reduced aircraft utilisation. This led to a decision to fill spare long-haul aircraft capacity with third-party work. BCal's third-party business included a twice weekly Gatwick—Luxembourg—Barbados service on behalf of Caribbean Airways, weekly Gatwick—Frankfurt—Mahé services under contract to Air Seychelles and a wet lease agreement with Surinam Airways to operate a weekly Paramaribo—Gatwick—Amsterdam service. The Caribbean Airways and Air Seychelles contracts used spare capacity on BCal's DC-10-30s, while the Surinam Airways wet lease utilised the ex-Laker DC-10-10s operated by British Caledonian Charter. Although BCal's airline operation incurred a loss of £655,000 in the financial year to 31 October 1983, the airline managed to make an overall pre-tax profit of £2.6 million. This translated into a £300,000 retained profit at group level.