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Hi folks, my name is Phil and welcome to
Grounded, the series which looks at airlines
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of yesteryear. This episode will take a look at
the second incarnation of British Island Airways.
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The original British Island Airways had
been merged with Air Anglia, Air Westward
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and Air Wales to form Air UK, which
was covered in an earlier episode.
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Shortly after the formation of Air UK in 1980,
the United Kingdom itself was hit by a recession
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forcing Air UK to make cuts across the board,
with the charter division one such area facing
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the chop. Air UKs charter division had been
inherited from the original British Island
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Airways, after they had themselves added
charter flying to their repertoire in 1979.
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The charter fleet consisted of four BAC One-Eleven
jet aircraft, which following the merger had
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quickly been repainted in the new Air UK livery.
Air UK were keen to offload the division with one
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major benefit being the removal of a fairly
expensive aircraft type and allowing the
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standardisation of its already eclectic fleet. By
disposing of the charter business Air UK would be
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able to focus entirely on their scheduled flight
operations and hopefully weather the storm.
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In December 1981 Peter Villa, the Managing
Director of Air UK and former MD of the
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original BIA, agreed in principle to acquire Air
UKs charter operations from their parent company,
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British & Commonwealth. B&C had already placed
the charter division into a holding company,
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BIA Ltd ahead of any potential sale. With the
help of a loan from B&C, Villa would lead the
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management buy out and British Island Airways
MkII would begin operations on April 1st, 1982.
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The four BAC One-Elevens were quickly repainted
into the British Island Airways livery,
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the same livery that they had worn under
the original BIA barely 3 years earlier.
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The 89 seat 400 series One-Elevens were, according
to Villa, valuable in securing business for the
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airline as he believed that, “there are already
too many 737s in the UK Inclusive Tour market”.
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He wasn’t wrong, by 1982 there were 32 Boeing
737s being used by the main UK charter Airlines
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with nearly 20 more to follow over the next two
years. It was believed that the smaller One-Eleven
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would be more attractive to the independent tour
operators as the aircraft would be easier to fill
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up and therefore require less of a commitment for
these smaller firms. It was also hoped that the
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One-Eleven would also be attractive to larger Tour
companies who wanted to serve new destinations and
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the smaller One-Eleven would be easier to
fill when trying out these new routes...
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BIA would operate Air UKs existing
charter programme for 1982,
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giving the new airline time to find new
customers and secure contracts for itself.
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The airline had got off to a fairly good start and
carried over 184,000 passengers in its first year.
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BIA would of course operate charter flights
for tour operators but also operated flights
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on behalf of other carriers. 1983 would see BIA
operate some flights on behalf of Air Florida
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who despite being in a spot of financial
bother wanted to keep a European network.
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Air Florida's financial woes meant that the
airline was forced to reduce its long haul DC-10
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fleet from four aircraft to one, after finding a
partner in BIA they would still be able to serve
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several European destinations. BIA would operate
a BAC-1-11 from London Gatwick to Amsterdam,
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Brussels, Dusseldorf and Frankfurt with the
flights connecting to Air Florida’s Miami flight.
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This arrangement continued into 1984 however
ended when Air Florida collapsed later that year.
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BIA soon found a new partner however, operating
european flights on behalf of a new airline,
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Virgin Atlantic from that November. These
flights would see service to Maastricht,
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in The Netherlands acting as a feeder to
their Gatwick based long haul operation.
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The Virgin One-Eleven would also visit
Basel and Salzburg before being returned
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to BIA in April 1985. Another One-Eleven was
leased out to Airways International Cymru,
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operating from April until November.
The story of the Welsh based charter
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airline is riddled with twists and turns
and best saved for another day however...
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One might think that BIA was spreading themselves
very thin, however the airline acquired two more
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One-Elevens, these were the larger 119 seat 500
series variant. 1985 would see the airline acquire
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two more of these One-Elevens with one arriving
in May and the second in October. The October
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arrival would be sent out on duty with British
Caledonian where it would operate a weekday
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service until the end of May 1986. The aircraft
would however, be used by BIA on weekends.
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By 1986 British Island Airways was
operating eight BAC One-Eleven aircraft,
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four 89 seat 400 models and four of the larger 500
models. These aircraft had all come from various
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other operators including Bahamasair, Quebecair,
Laker and Court Line, those last two airlines are
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going to be covered soon by the way so subscribe
if you want to catch those episodes as they land.
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1986 would also see an additional One-Eleven
come in from the Romanian flag carrier Tarom,
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this was a Rombac One-Eleven however, built
under license in Romania and was with BIA from
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June until the summer season ended in November.
A year earlier, in 1985, BIA acquired Sicilian Sun
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Limited, trading as Island Sun. The tour operator
specialised in package holidays to Corsica,
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Sardinia and of course Sicily as well
as other Mediterranean destinations.
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They had been experiencing some financial problems
and was acquired by BIA for just two Pounds,
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it was a move similar to that done by Court Line
over a decade earlier where the airline steps in
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and acquires it’s principal tour operator
in order to save them. Unlike Court Line
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and Clarksons Holidays however, Sicilian Sun
was not a complete basket case that would drag
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the airline down. Sicilian Sun accounted for just
4.5% of the BIA flight programme and it was hoped
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that by acquiring the company, BIA could turn
it around into a valuable part of the group.
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BIA was an independent airline, supplying charter
seats to various tour operators, by acquiring one
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for themselves and bringing it in house they
were reducing their dependency on contracts
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with third party companies and reducing their
exposure should they lose any of these contracts,
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something which was looking increasingly
likely, though through no fault of their own.
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In 1986 BIA’s four largest customers were
International Leisure Group, Owners Abroad,
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Pegasus and Viking International. ILG already
had its own in-house airline, Air Europe,
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however still used British Island Airways
quite a lot. It was Owners Abroad and Viking
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which were about to go their separate ways.
Viking International, as mentioned in the Air UK
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episode, were primarily a seat broker who also had
their own tour operator, Unijet. Viking through
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a partnership with Air UK established Air UK
Leisure, this new airline, founded in 1987 would
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begin operations in 1988 from London Stansted.
The Owners Abroad Group, established in 1973 as
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a seat broker had through various acquisitions
become a fairly sizable tour operator by 1986.
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Taking a similar route to Viking, Owners
Abroad established its own in-house charter
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airline with Air 2000 taking to the skies in
1987. I wonder what ever happened to them?
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While the formation of these two airlines was a
bit of a blow to BIA they weren’t really directly
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competing with them, Air 2000 was focused on
Manchester and AirUK Leisure was at Stansted.
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Both Owners Abroad and Viking would continue
to use BIA where necessary for the time being.
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It wasn’t all doom and gloom however, BIA had
successfully floated on the stock market giving
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the company a nice cash infusion. BIA had
been profitable throughout its existence,
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with a steady increase in profits year
on year thanks to careful expansion.
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At the time, the core of BIA’s business was
chartering aircraft for tour operators, the tour
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operators would pay BIA to operate the flight, for
BIA it was a fairly risk free way of doing things.
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If they didn’t get paid, then the flight wouldn’t
operate, they would also be paid the same fee
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regardless of how many seats had been sold.
The big risk was of course if the tour operator
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decided to cancel contracts and move to other
carriers, or in the case of Viking and Owners
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Abroad, launch their own. The UK charter market is
seasonal, the summer is very busy but in winter it
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is considerably quieter, an airline needs to
ensure its aircraft are being fully utilised
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or else the cash stops coming in. BIA wanted to
reduce its dependency on seasonal flying so in
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April 1987 gained approval for its first scheduled
routes with flights from Gatwick to Palermo and
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Catania, these were at the time, the only direct
flights to Sicily from the United Kingdom.
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1987 would also see the nation's flag carrier
British Airways acquire British Caledonian,
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the country's second largest airline. A result
of this was that BA was forced to relinquish
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a number of routes for competition reasons
and this gave BIA an opportunity to expand
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further into the scheduled market. BIA applied
to the UK Civil Aviation Authority for route
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licenses on five routes from Gatwick, these were
Glasgow, Edinburgh, Manchester, Jersey and Nice.
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If granted, the BIA scheduled route network would
keep three of their BAC 1-11s fully occupied.
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With this in mind, BIA decided to invest
in some new aircraft. In February 1987,
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BIA penned a deal with ILFC for two brand
new McDonnell Douglas MD-83s, unlike the
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rest of the BIA fleet these aircraft would be
leased with delivery scheduled for early 1988.
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At the time, there wasn’t a UK operator of the
type, BIA would be beaten to the punch however
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with the infamous Paramount Airways becoming the
type's first UK operator. The “Mad Dog” has always
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been the less popular choice for UK airlines,
aside from BIA and Paramount, Airtours would
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be the only other operator of the type. British
Jet doesn’t count as they were Maltese and didn’t
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operate the aircraft themselves, the same applies
to Air Scandic, well, except the Maltese bit...
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British Island Airways was also the airline of
choice for the Prime Minister, Margaret Thatcher.
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In fact, she would travel BIA on her tour of the
UK in the run up to the 1987 General Election.
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She had previously used the original British
Island Airways in 1979 making use of their
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Handley Page Dart Heralds, 1987 however would see
her use the BAC One-Eleven seen here arriving at
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Newcastle and here arriving at Cardiff…
Despite being Thatcher’s airlie of choice,
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the PM didn’t do BIA any favours as the
Civil Aviation Authority rejected all
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of the former BCAL scheduled routes that
BIA had applied for. Despite that setback,
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the airline was awarded rights to offer scheduled
flights to Malta from both Manchester and Gatwick
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with services to begin the following April.
1988 was a very tough year for BIA, with the
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airline making its first loss since the management
buy-out from AirUK back in 1982. BIA made a pre
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tax loss just shy of £2.9 million, compared to a
profit of nearly £2 million the year before. There
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were many factors for this with the most damaging
one being the near total meltdown of Europe’s
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Air Traffic Control network which was buckling
under the increasing number of flights. This was
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further compounded with the night time closure of
Gatwick’s primary runway for resurfacing works.
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The night time closure of that runway
and generally odd layout of it,
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it’s parallel runway and further parallel taxiway
nearly spelled disaster on the night of April 12th
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1988. With the primary runway, 08
Right closed, what was often called
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the “Emergency Runway” 08 Left was in use.
Zero Eight Left was generally used as a taxiway,
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only being brought into operation when it’s Right
hand sibling was out of action. To be honest,
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during my time as Gatwick based crew, I can’t
recall ever using it as it is used so little.
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Eight Left sits, in close proximity to Eight
Right, with a taxiway running parallel to Eight
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Left, the runways are so close that they cannot
be used for simultaneous operation and in fact,
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the two runways and taxiway are all
squeezed into an area just 290 metres wide.
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Eight Left was similar in size to Eight Right,
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it also had runway lighting approved
for visual approaches but no ILS.
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At just before twenty five minutes past ten on
the night of Tuesday 12th April, a BIA BAC-One
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Eleven inbound from Venice was cleared for
a visual approach and landing on Eight Left.
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In the left-hand seat was a first officer
undergoing captain conversion training with
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a training captain on the right, neither pilot
had previous experience landing on Eight Left.
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The aircraft approach was normal until around
750 feet when the aircraft’s track was adjusted
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to the left, towards the green lights believed
to be the centreline of the “Emergency Runway”.
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As the aircraft touched down the pilots realised
their mistake, that they had in-fact landed on an
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actual taxiway and tried to bring their aircraft
to a stop. As this was going on, a British Airways
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737 had been turning onto the taxiway, the
737’s commander saw the One-Eleven on approach,
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doubtful of the aircraft’s landing track he slowed
his 737 down and told his co-pilot to be ready to
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get the aircraft off the taxiway. A few seconds
later, when they saw the One-Eleven really was
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coming at them they steered the 737 to the right
and onto the grass. The nose and right main gear
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of the 737 went onto the grass but as soon as the
left main departed the taxiway it got bogged down,
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leaving the left wing and rear fuselage hanging
over the taxiway. The BAC One-Eleven managed to
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stop well short, approximately 190
metres short of the now stuck 737…
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Aside from the Boeing needing towing out of the
grass and replacement underwear for both sets
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of flight crew there were no injuries. While I
could go into great detail about this incident,
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and I may some other time, there were several
factors which led to the dangerous situation.
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One of the biggest was that under normal
operations with Eight Left being used as a
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taxiway, it would have green centreline lights,
this combined with the proper taxiways lights
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and red stop bar placement give a dangerous
impression at night. In these photos from the
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UK AAIB investigation, the aircraft (in this
case a helicopter) is lined up to the taxiway,
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Eight Left visible to the right of it and Eight
Right barely visible to the right of that.
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The lights are from construction works which
were taking place at the time of the incident.
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This was, as far as I am aware the only
serious incident involving the airline.
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Steering this away from Air Crash Investigation
and back to Grounded, this wasn’t the only problem
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for BIA during the year. The introduction
of their shiny new MD-83s were delayed,
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resulting in BIA shelling out on expensive
sub-charters. The first aircraft arrived in
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December 1987 however the second wouldn’t arrive
until May 1988. These were pressed into service
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with flights to new charter destinations
including Cairo, Luxor and Tel Aviv.
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Impressed with these aircraft, a further two
“Mad Dogs” were ordered with one arriving in
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December and the fourth the following April. The
167 seat MD-83 was held in high regard by British
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Island Airways, it was quieter and seen as more
comfortable than their existing One-Eleven fleet,
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it had a larger capacity and a greater range
too. BIA and Island Sun were already scouting out
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locations in East Africa which could potentially
be home to some new exotic destinations.
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BIA’s management believed that with the growth of
the Inclusive Tour market as a whole that there
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was bound to grow within it, a sector in which
customers are prepared to pay a reasonable amount
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extra for a product of genuine higher quality.
It also felt that this demand was likely in
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the relatively affluent South East of England, in
other words the area around their Gatwick base…
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Island Sun, following a management shake up,
had begun to focus more and more on premium
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packages with their BIA flights having “club” type
catering with free drinks provided to passengers.
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Island Sun also began selling package holidays to
the Caribbean and Mexico under their new “Simply
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Exotic” brand. Naturally BIA couldn’t provide
transatlantic flights and so passengers were
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put onto scheduled US airlines where once in the
States could connect on to their destination.
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As their plans for a large scheduled
route network were now fairly knackered,
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combined with their additional MD-83s BIA found
itself with too many planes and not enough work.
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Two One-Elevens were duly shipped over to France
on a year long lease, a clever move as BIA would
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earn more through that than operating them for
themselves. At the same time the airline reduced
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its nighttime operations, whilst also increasing
their charter fees for those flights. The effect
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was twofold, BIA would make better margins on
these flights but also had more recovery room
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padded into the schedules should there be any
overnight disruption like the year before.
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1989 saw some shakeup in both the
charter and inclusive tour market,
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several companies had merged or gone out of
business. Others, such as Owners Abroad had
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instead directed more holidaymakers onto their own
in-house airline, Air 2000. The BIA management had
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always seemed pretty “on the ball” and began
to offer a consolidation service to various
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tour operators. Basically, instead of relying
on a tour operator to charter a whole aircraft,
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BIA would instead offer small blocks of seats
to tour operators. For just a minor increase in
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administrative effort this move increased BIA’s
aircraft utilisation and also found support from
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the Association of Independent Tour Operators.
It was a popular move, smaller tour operators
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who had been either priced out or declined access
to the in-house airlines of other tour operators,
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unable to afford to charter an entire aircraft
for themselves had to find seats on carriers
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such as Dan-Air, an airline who will be covered
in a future episode but also had the dubious and
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somewhat unfair nickname of “Dan Dare”. Now, these
smaller companies, some of which were little more
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than family run travel agencies could get a fair
price on airline seats and have a chance to grow.
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During the year BIA introduced “Island
Class” on its scheduled routes,
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the service aimed to provide a high quality
service to its business travellers. Island Class
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passengers would receive a glass of champagne to
welcome them onboard along with a complimentary
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newspaper and an enhanced food service
with a hot meal and complimentary drinks.
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In an attempt at keeping their growing capacity
in check, the airline sold two Four Hundred series
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One-Elevens to Okada Air of Nigeria. These
would be balanced out with the return of the two
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aircraft that had been on lease to TAT of France.
The airline’s fourth MD-83 would be delivered in
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March, later one of the fleet would be chartered
by Air Tanzania for a month that December.
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BIA had on several occasions over the years
been approached by various parties regarding
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the takeover of the company, according to
Managing Director, Peter Villa “on average,
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two or three proposals a year, some genuine, some
not so genuine”. International Leisure Group,
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owner of Air Europe and a BIA customer had been
in serious talks with regard to acquiring BIA.
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Air Europe had begun as a charter
airline but had expanded massively,
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expanding into scheduled operations
and even had long-haul ambitions.
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They saw BIA as an ideal takeover target, while
BIA didn’t have much of a scheduled route network
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it was the fourth largest slot holder at an
increasingly congested Gatwick. Acquiring them
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would give them these crucial slots which they
could use to expand their own scheduled services.
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At the time ILG, the UK’s second largest tour
operator was still a fairly big customer of
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BIA despite having its own airline, a secondary
benefit of acquiring BIA would be that ILG could
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have complete control of its charter capacity and
scheduling. Despite protracted talks of nearly a
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year, an agreement just couldn’t be reached and
the two companies went their separate ways.
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As the next decade dawned things started to
look a bit bleak for British Island Airways,
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well the industry in general to be fair. While
the UK hadn’t technically hit the recession yet,
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the economy had begun to slow down. A side effect
of this was that less people could afford to book
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a holiday, leading to a decline in the inclusive
tour market. The ongoing crisis in the Gulf,
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combined with Saddam’s sabre rattling made war
look increasingly likely, further putting people
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off travelling overseas. Oil prices began to rise,
in turn so did the price of jet fuel which further
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put the squeeze on BIA. Having taken a big
hit on finances over the last couple of years,
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combined with some large single time expenses
and losing tour operator customers to their own
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in-house airlines British Island Airways ceased
operations on Thursday 01st February 1990.
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So what went wrong?
British Island Airways had been well managed,
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the airline’s expansion had been carefully planned
and the airline was pretty much “living within its
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means”. BIA had been profitable every year since
the 1982 management buy-out until 1988 when it
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made its first loss, and a big one at that, just
shy of £2.9 million. There was a good reason for
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that however, BIA had signed a deal on some new
MD-83s and while they were leased rather than
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owned, they still had to pay deposits on them.
The company also made some big ticket purchases
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which at the time made sense, in January 1988
they spent £2.1 million on a new headquarters.
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The 1.9 acre site, adjacent to Gatwick Airport
would be home to not just the airline but it’s
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tour operator, Island Sun which would move over
from an expensive site in central London. The
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introduction of the MD-83 meant spare parts would
be required, BIA having already spent one million
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Pounds on spares spent a further £1.34 million on
a spare engine. All of these expenses made sense
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and were perfectly justified, unfortunately
they ate into their cash reserves at a time
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when things were starting to go south.
Despite the airline’s expenditure, it was
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still expected to have been profitable during the
year however it was hit hard by both the nighttime
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closure of Gatwick’s main runway and subsequent
reduction in capacity, as well as the implosion
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of European ATC which had been struggling to
cope with an ever increasing number of flights.
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There were also problems at McDonnell Douglas
resulting in the late delivery of some of the
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new “Mad Dogs” meaning BIA was forced to
charter aircraft from other operators.
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The biggest issue for the airline was that two
of its main customers formed their own airlines,
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Air UK Leisure and Air 2000. This wasn’t really a
problem at first, however both airlines gradually
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expanded, taking passengers away from BIA.
As the economy began to slide in 1989,
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Viking and Owners Abroad would rely more on
their in-house airlines, reducing costs and
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boosting their own airline businesses.
It was a combination of factors all coming
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together at once which led to the demise
of the airline. The airline’s move to new
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headquarters was a sensible one as well as the
investment in new aircraft and associated spares,
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the problem was these huge expenses ate the
companies financial reserves. In theory this
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shouldn’t have been a big issue as the airline
was profitable, unfortunately the ATC problems
00:22:04
and delivery issues meant that BIA struggled to
make the money it needed to top up its finances.
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Then the IT holiday market imploded thanks in
part to the imminent kicking off of the Gulf War.
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BIA’s main customers shifted more passengers onto
their own in-house airlines, add to that BIA had
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moved away from whole aircraft charters meaning
that the airline was left operating half empty
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aircraft on behalf of other tour operators.
It is rather frightening how a well managed
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airline collapsed so quickly, some have speculated
that they would have fared better if they had made
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a deal with the International Leisure Group.
What some seem to forget is that ILG were
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now in their Tony Montana in Act III phase and
would themselves collapse the following year.
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BIA had previously depended too much on contracts
with third party tour operators, they tried to
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correct this by moving away from whole aircraft
charters and instead selling blocks of seats in
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bulk to tour operators. While this opened up the
airline to smaller firms it also increased the
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airline’s exposure to reduced demand, prior to
this change the single tour operator chartering
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the whole aircraft assumed the cost, BIA was paid
the same regardless of if it had one passenger or
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a full load. By moving away from whole aircraft
charters BIA were exposed to a bigger financial
00:23:16
risk, if only one small tour operator picked up,
say, 25% of a flight’s seats then BIA were liable
00:23:23
for the 75% that was unsold. This was a bit of
a gamble but again it made sense at the time,
00:23:28
the problem here was again the reduction in
custom from it’s larger tour operator customers.
00:23:34
BIA could of course use it’s own tour operator to
fill seats too, unfortunately Island Sun was a bit
00:23:39
of a lemon. Nowhere near as bad as Clarksons
which had dragged Court Line down but still
00:23:43
quite a liability. Island Sun struggled
to turn a profit during their existence,
00:23:48
BIA brought in a new management team to try and
turn Island Sun around but it was a slow process
00:23:53
and the group collapsed before we could see if
it was working. Island Sun only accounted for
00:23:57
around 5% of BIA’s charter business however, in
order to have survived the early 90s recession
00:24:03
they needed a much bigger tour operator of
their own, or a collection of smaller ones.
00:24:07
That is the risk assumed with small independent
airlines, unfortunately in 2021 there aren't any
00:24:13
small independent charter airlines in the UK. We
have two large charter carriers, formerly three,
00:24:19
all part of their own large travel companies.
Small independent tour operators are either
00:24:24
forced to pay a premium for seats with them
or instead bring in carriers from overseas,
00:24:28
maybe it’s time we had a new guy on the scene?
Until next time, thank you for watching.
