Grounded: British Island Airways

00:24:46
https://www.youtube.com/watch?v=6zJqCbLRSGE

概要

TLDRIn this episode of "Grounded," Phil narrates the story of British Island Airways (BIA), born out of a management buy-out in 1982. Initially successful, BIA operated BAC One-Elevens and catered to European tour operators, thriving in the charter market with a unique position against larger Boeing 737s. Despite early profitability and strategic partnerships with airlines like Virgin Atlantic, various factors such as UK's recession, competition from newly formed in-house airlines, a significant operational loss in 1988, and mishaps including a landing incident drastically undermined its stability. BIA attempts to diversify its operations through new scheduled routes and acquisitions but ultimately faced financial collapse on February 1, 1990, succumbing to the intense market pressures and reduced consumer travel confidence during the Gulf crisis.

収穫

  • ✈️ BIA was formed in 1982 after acquiring Air UK's charter operations.
  • 📉 Economic challenges impacted BIA's performance significantly.
  • 🔄 Partnership with Virgin Atlantic expanded BIA's operational routes.
  • 🚫 Competition from in-house airlines affected BIA's client base.
  • 🔧 Investment in new aircraft led to unplanned expenses for BIA.
  • 🛬 April 12, 1988, saw a serious incident involving the aircraft landing mishap.
  • 📊 BIA faced difficulties transitioning from charter to scheduled flights successfully.
  • ❌ BIA ceased operations on February 1, 1990, due to financial instability.

タイムライン

  • 00:00:00 - 00:05:00

    Phil introduces the series 'Grounded', focusing on British Island Airways (BIA) and its history post-merger with Air UK. Following the merger, BIA was spun off under Peter Villa's management in 1982, acquiring Air UK's charter operations to offer a unique alternative in the increasingly saturated charter market dominated by Boeing 737s.

  • 00:05:00 - 00:10:00

    After establishing its charter services, BIA saw initial success, transporting over 184,000 passengers in its first year. The airline partnered with Air Florida and later Virgin Atlantic, expanding its flights across Europe. In the following years, BIA grew its fleet by acquiring more BAC One-Elevens and venturing into collaborations with other airlines.

  • 00:10:00 - 00:15:00

    By 1986, BIA's fleet expanded significantly, even acquiring Sicilian Sun, a struggling tour operator, for strategic reasons. The airline launched new scheduled flights to Sicily in 1987, despite facing competitive challenges from rival charter airlines like Air 2000. Meanwhile, they successfully floated on the stock market and maintained profitability in their charter operations, although competition from in-house carriers posed a threat.

  • 00:15:00 - 00:24:46

    As the late 1980s approached, BIA faced economic downturns with the Gulf crisis impacting travel plans. A combination of mismanagement of debts, expensive new aircraft acquisitions, and losses from its own tour operator Island Sun led to financial struggles. BIA ceased operations in 1990 after a rapid downfall despite previously solid management, reflecting the delicate nature of small independent airlines amid industry changes.

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ビデオQ&A

  • What led to the formation of British Island Airways (BIA)?

    BIA was formed in 1982 after a management buy-out from Air UK, focusing on charter operations from the inherited operations of the original British Island Airways.

  • What challenges did BIA face during its operation?

    BIA faced financial difficulties due to economic downturns, competition from in-house airlines of major tour operators, and complications from European Air Traffic Control issues.

  • How did BIA differentiate itself in the charter market?

    BIA operated BAC One-Elevens, offering a smaller and potentially more appealing option for independent tour operators compared to popular larger aircraft like the Boeing 737.

  • What was the impact of the Gulf crisis on BIA?

    The Gulf crisis diminished consumer confidence in travel, contributing to a decline in the inclusive tour market and further affecting BIA's customer base.

  • What ultimately caused BIA to cease operations?

    BIA ceased operations in 1990 due to a combination of increased competition, economic factors, and heavy financial liabilities accumulating from new aircraft and operational costs.

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  • 00:00:04
    Hi folks, my name is Phil and welcome to  Grounded, the series which looks at airlines
  • 00:00:08
    of yesteryear. This episode will take a look at  the second incarnation of British Island Airways.
  • 00:00:14
    The original British Island Airways had  been merged with Air Anglia, Air Westward
  • 00:00:19
    and Air Wales to form Air UK, which  was covered in an earlier episode.
  • 00:00:23
    Shortly after the formation of Air UK in 1980,  the United Kingdom itself was hit by a recession
  • 00:00:28
    forcing Air UK to make cuts across the board,  with the charter division one such area facing
  • 00:00:33
    the chop. Air UKs charter division had been  inherited from the original British Island
  • 00:00:38
    Airways, after they had themselves added  charter flying to their repertoire in 1979.
  • 00:00:44
    The charter fleet consisted of four BAC One-Eleven  jet aircraft, which following the merger had
  • 00:00:49
    quickly been repainted in the new Air UK livery. Air UK were keen to offload the division with one
  • 00:00:55
    major benefit being the removal of a fairly  expensive aircraft type and allowing the
  • 00:00:59
    standardisation of its already eclectic fleet. By  disposing of the charter business Air UK would be
  • 00:01:05
    able to focus entirely on their scheduled flight  operations and hopefully weather the storm.
  • 00:01:10
    In December 1981 Peter Villa, the Managing  Director of Air UK and former MD of the
  • 00:01:15
    original BIA, agreed in principle to acquire Air  UKs charter operations from their parent company,
  • 00:01:20
    British & Commonwealth. B&C had already placed  the charter division into a holding company,
  • 00:01:25
    BIA Ltd ahead of any potential sale. With the  help of a loan from B&C, Villa would lead the
  • 00:01:31
    management buy out and British Island Airways  MkII would begin operations on April 1st, 1982.
  • 00:01:37
    The four BAC One-Elevens were quickly repainted  into the British Island Airways livery,
  • 00:01:42
    the same livery that they had worn under  the original BIA barely 3 years earlier.
  • 00:01:47
    The 89 seat 400 series One-Elevens were, according  to Villa, valuable in securing business for the
  • 00:01:53
    airline as he believed that, “there are already  too many 737s in the UK Inclusive Tour market”.
  • 00:01:58
    He wasn’t wrong, by 1982 there were 32 Boeing  737s being used by the main UK charter Airlines
  • 00:02:05
    with nearly 20 more to follow over the next two  years. It was believed that the smaller One-Eleven
  • 00:02:10
    would be more attractive to the independent tour  operators as the aircraft would be easier to fill
  • 00:02:15
    up and therefore require less of a commitment for  these smaller firms. It was also hoped that the
  • 00:02:20
    One-Eleven would also be attractive to larger Tour  companies who wanted to serve new destinations and
  • 00:02:25
    the smaller One-Eleven would be easier to  fill when trying out these new routes...
  • 00:02:30
    BIA would operate Air UKs existing  charter programme for 1982,
  • 00:02:34
    giving the new airline time to find new  customers and secure contracts for itself.
  • 00:02:38
    The airline had got off to a fairly good start and  carried over 184,000 passengers in its first year.
  • 00:02:44
    BIA would of course operate charter flights  for tour operators but also operated flights
  • 00:02:49
    on behalf of other carriers. 1983 would see BIA  operate some flights on behalf of Air Florida
  • 00:02:55
    who despite being in a spot of financial  bother wanted to keep a European network.
  • 00:03:00
    Air Florida's financial woes meant that the  airline was forced to reduce its long haul DC-10
  • 00:03:05
    fleet from four aircraft to one, after finding a  partner in BIA they would still be able to serve
  • 00:03:10
    several European destinations. BIA would operate  a BAC-1-11 from London Gatwick to Amsterdam,
  • 00:03:17
    Brussels, Dusseldorf and Frankfurt with the  flights connecting to Air Florida’s Miami flight.
  • 00:03:22
    This arrangement continued into 1984 however  ended when Air Florida collapsed later that year.
  • 00:03:28
    BIA soon found a new partner however, operating  european flights on behalf of a new airline,
  • 00:03:33
    Virgin Atlantic from that November. These  flights would see service to Maastricht,
  • 00:03:38
    in The Netherlands acting as a feeder to  their Gatwick based long haul operation.
  • 00:03:42
    The Virgin One-Eleven would also visit  Basel and Salzburg before being returned
  • 00:03:46
    to BIA in April 1985. Another One-Eleven was  leased out to Airways International Cymru,
  • 00:03:52
    operating from April until November.  The story of the Welsh based charter
  • 00:03:56
    airline is riddled with twists and turns  and best saved for another day however...
  • 00:04:00
    One might think that BIA was spreading themselves  very thin, however the airline acquired two more
  • 00:04:05
    One-Elevens, these were the larger 119 seat 500  series variant. 1985 would see the airline acquire
  • 00:04:12
    two more of these One-Elevens with one arriving  in May and the second in October. The October
  • 00:04:17
    arrival would be sent out on duty with British  Caledonian where it would operate a weekday
  • 00:04:21
    service until the end of May 1986. The aircraft  would however, be used by BIA on weekends.
  • 00:04:28
    By 1986 British Island Airways was  operating eight BAC One-Eleven aircraft,
  • 00:04:33
    four 89 seat 400 models and four of the larger 500  models. These aircraft had all come from various
  • 00:04:40
    other operators including Bahamasair, Quebecair,  Laker and Court Line, those last two airlines are
  • 00:04:46
    going to be covered soon by the way so subscribe  if you want to catch those episodes as they land.
  • 00:04:51
    1986 would also see an additional One-Eleven  come in from the Romanian flag carrier Tarom,
  • 00:04:56
    this was a Rombac One-Eleven however, built  under license in Romania and was with BIA from
  • 00:05:01
    June until the summer season ended in November. A year earlier, in 1985, BIA acquired Sicilian Sun
  • 00:05:08
    Limited, trading as Island Sun. The tour operator  specialised in package holidays to Corsica,
  • 00:05:13
    Sardinia and of course Sicily as well  as other Mediterranean destinations.
  • 00:05:18
    They had been experiencing some financial problems  and was acquired by BIA for just two Pounds,
  • 00:05:23
    it was a move similar to that done by Court Line  over a decade earlier where the airline steps in
  • 00:05:27
    and acquires it’s principal tour operator  in order to save them. Unlike Court Line
  • 00:05:32
    and Clarksons Holidays however, Sicilian Sun  was not a complete basket case that would drag
  • 00:05:36
    the airline down. Sicilian Sun accounted for just  4.5% of the BIA flight programme and it was hoped
  • 00:05:43
    that by acquiring the company, BIA could turn  it around into a valuable part of the group.
  • 00:05:48
    BIA was an independent airline, supplying charter  seats to various tour operators, by acquiring one
  • 00:05:53
    for themselves and bringing it in house they  were reducing their dependency on contracts
  • 00:05:57
    with third party companies and reducing their  exposure should they lose any of these contracts,
  • 00:06:02
    something which was looking increasingly  likely, though through no fault of their own.
  • 00:06:07
    In 1986 BIA’s four largest customers were  International Leisure Group, Owners Abroad,
  • 00:06:13
    Pegasus and Viking International. ILG already  had its own in-house airline, Air Europe,
  • 00:06:18
    however still used British Island Airways  quite a lot. It was Owners Abroad and Viking
  • 00:06:22
    which were about to go their separate ways. Viking International, as mentioned in the Air UK
  • 00:06:28
    episode, were primarily a seat broker who also had  their own tour operator, Unijet. Viking through
  • 00:06:33
    a partnership with Air UK established Air UK  Leisure, this new airline, founded in 1987 would
  • 00:06:40
    begin operations in 1988 from London Stansted. The Owners Abroad Group, established in 1973 as
  • 00:06:46
    a seat broker had through various acquisitions  become a fairly sizable tour operator by 1986.
  • 00:06:52
    Taking a similar route to Viking, Owners  Abroad established its own in-house charter
  • 00:06:56
    airline with Air 2000 taking to the skies in  1987. I wonder what ever happened to them?
  • 00:07:03
    While the formation of these two airlines was a  bit of a blow to BIA they weren’t really directly
  • 00:07:08
    competing with them, Air 2000 was focused on  Manchester and AirUK Leisure was at Stansted.
  • 00:07:13
    Both Owners Abroad and Viking would continue  to use BIA where necessary for the time being.
  • 00:07:19
    It wasn’t all doom and gloom however, BIA had  successfully floated on the stock market giving
  • 00:07:24
    the company a nice cash infusion. BIA had  been profitable throughout its existence,
  • 00:07:29
    with a steady increase in profits year  on year thanks to careful expansion.
  • 00:07:33
    At the time, the core of BIA’s business was  chartering aircraft for tour operators, the tour
  • 00:07:38
    operators would pay BIA to operate the flight, for  BIA it was a fairly risk free way of doing things.
  • 00:07:45
    If they didn’t get paid, then the flight wouldn’t  operate, they would also be paid the same fee
  • 00:07:49
    regardless of how many seats had been sold.  The big risk was of course if the tour operator
  • 00:07:54
    decided to cancel contracts and move to other  carriers, or in the case of Viking and Owners
  • 00:07:59
    Abroad, launch their own. The UK charter market is  seasonal, the summer is very busy but in winter it
  • 00:08:04
    is considerably quieter, an airline needs to  ensure its aircraft are being fully utilised
  • 00:08:09
    or else the cash stops coming in. BIA wanted to  reduce its dependency on seasonal flying so in
  • 00:08:15
    April 1987 gained approval for its first scheduled  routes with flights from Gatwick to Palermo and
  • 00:08:20
    Catania, these were at the time, the only direct  flights to Sicily from the United Kingdom.
  • 00:08:27
    1987 would also see the nation's flag carrier  British Airways acquire British Caledonian,
  • 00:08:32
    the country's second largest airline. A result  of this was that BA was forced to relinquish
  • 00:08:37
    a number of routes for competition reasons  and this gave BIA an opportunity to expand
  • 00:08:41
    further into the scheduled market. BIA applied  to the UK Civil Aviation Authority for route
  • 00:08:47
    licenses on five routes from Gatwick, these were  Glasgow, Edinburgh, Manchester, Jersey and Nice.
  • 00:08:53
    If granted, the BIA scheduled route network would  keep three of their BAC 1-11s fully occupied.
  • 00:08:59
    With this in mind, BIA decided to invest  in some new aircraft. In February 1987,
  • 00:09:04
    BIA penned a deal with ILFC for two brand  new McDonnell Douglas MD-83s, unlike the
  • 00:09:10
    rest of the BIA fleet these aircraft would be  leased with delivery scheduled for early 1988.
  • 00:09:16
    At the time, there wasn’t a UK operator of the  type, BIA would be beaten to the punch however
  • 00:09:21
    with the infamous Paramount Airways becoming the  type's first UK operator. The “Mad Dog” has always
  • 00:09:26
    been the less popular choice for UK airlines,  aside from BIA and Paramount, Airtours would
  • 00:09:32
    be the only other operator of the type. British  Jet doesn’t count as they were Maltese and didn’t
  • 00:09:36
    operate the aircraft themselves, the same applies  to Air Scandic, well, except the Maltese bit...
  • 00:09:42
    British Island Airways was also the airline of  choice for the Prime Minister, Margaret Thatcher.
  • 00:09:47
    In fact, she would travel BIA on her tour of the  UK in the run up to the 1987 General Election.
  • 00:09:53
    She had previously used the original British  Island Airways in 1979 making use of their
  • 00:09:58
    Handley Page Dart Heralds, 1987 however would see  her use the BAC One-Eleven seen here arriving at
  • 00:10:04
    Newcastle and here arriving at Cardiff… Despite being Thatcher’s airlie of choice,
  • 00:10:09
    the PM didn’t do BIA any favours as the  Civil Aviation Authority rejected all
  • 00:10:14
    of the former BCAL scheduled routes that  BIA had applied for. Despite that setback,
  • 00:10:19
    the airline was awarded rights to offer scheduled  flights to Malta from both Manchester and Gatwick
  • 00:10:24
    with services to begin the following April. 1988 was a very tough year for BIA, with the
  • 00:10:30
    airline making its first loss since the management  buy-out from AirUK back in 1982. BIA made a pre
  • 00:10:37
    tax loss just shy of £2.9 million, compared to a  profit of nearly £2 million the year before. There
  • 00:10:43
    were many factors for this with the most damaging  one being the near total meltdown of Europe’s
  • 00:10:47
    Air Traffic Control network which was buckling  under the increasing number of flights. This was
  • 00:10:52
    further compounded with the night time closure of  Gatwick’s primary runway for resurfacing works.
  • 00:10:57
    The night time closure of that runway  and generally odd layout of it,
  • 00:11:01
    it’s parallel runway and further parallel taxiway  nearly spelled disaster on the night of April 12th
  • 00:11:06
    1988. With the primary runway, 08  Right closed, what was often called
  • 00:11:11
    the “Emergency Runway” 08 Left was in use. Zero Eight Left was generally used as a taxiway,
  • 00:11:18
    only being brought into operation when it’s Right  hand sibling was out of action. To be honest,
  • 00:11:22
    during my time as Gatwick based crew, I can’t  recall ever using it as it is used so little.
  • 00:11:28
    Eight Left sits, in close proximity to Eight  Right, with a taxiway running parallel to Eight
  • 00:11:33
    Left, the runways are so close that they cannot  be used for simultaneous operation and in fact,
  • 00:11:37
    the two runways and taxiway are all  squeezed into an area just 290 metres wide.
  • 00:11:42
    Eight Left was similar in size to Eight Right,
  • 00:11:45
    it also had runway lighting approved  for visual approaches but no ILS.
  • 00:11:50
    At just before twenty five minutes past ten on  the night of Tuesday 12th April, a BIA BAC-One
  • 00:11:57
    Eleven inbound from Venice was cleared for  a visual approach and landing on Eight Left.
  • 00:12:01
    In the left-hand seat was a first officer  undergoing captain conversion training with
  • 00:12:06
    a training captain on the right, neither pilot  had previous experience landing on Eight Left.
  • 00:12:11
    The aircraft approach was normal until around  750 feet when the aircraft’s track was adjusted
  • 00:12:17
    to the left, towards the green lights believed  to be the centreline of the “Emergency Runway”.
  • 00:12:22
    As the aircraft touched down the pilots realised  their mistake, that they had in-fact landed on an
  • 00:12:26
    actual taxiway and tried to bring their aircraft  to a stop. As this was going on, a British Airways
  • 00:12:31
    737 had been turning onto the taxiway, the  737’s commander saw the One-Eleven on approach,
  • 00:12:37
    doubtful of the aircraft’s landing track he slowed  his 737 down and told his co-pilot to be ready to
  • 00:12:43
    get the aircraft off the taxiway. A few seconds  later, when they saw the One-Eleven really was
  • 00:12:48
    coming at them they steered the 737 to the right  and onto the grass. The nose and right main gear
  • 00:12:53
    of the 737 went onto the grass but as soon as the  left main departed the taxiway it got bogged down,
  • 00:12:59
    leaving the left wing and rear fuselage hanging  over the taxiway. The BAC One-Eleven managed to
  • 00:13:03
    stop well short, approximately 190  metres short of the now stuck 737…
  • 00:13:09
    Aside from the Boeing needing towing out of the  grass and replacement underwear for both sets
  • 00:13:14
    of flight crew there were no injuries. While I  could go into great detail about this incident,
  • 00:13:18
    and I may some other time, there were several  factors which led to the dangerous situation.
  • 00:13:24
    One of the biggest was that under normal  operations with Eight Left being used as a
  • 00:13:28
    taxiway, it would have green centreline lights,  this combined with the proper taxiways lights
  • 00:13:33
    and red stop bar placement give a dangerous  impression at night. In these photos from the
  • 00:13:37
    UK AAIB investigation, the aircraft (in this  case a helicopter) is lined up to the taxiway,
  • 00:13:43
    Eight Left visible to the right of it and Eight  Right barely visible to the right of that.
  • 00:13:48
    The lights are from construction works which  were taking place at the time of the incident.
  • 00:13:53
    This was, as far as I am aware the only  serious incident involving the airline.
  • 00:13:57
    Steering this away from Air Crash Investigation  and back to Grounded, this wasn’t the only problem
  • 00:14:01
    for BIA during the year. The introduction  of their shiny new MD-83s were delayed,
  • 00:14:06
    resulting in BIA shelling out on expensive  sub-charters. The first aircraft arrived in
  • 00:14:12
    December 1987 however the second wouldn’t arrive  until May 1988. These were pressed into service
  • 00:14:18
    with flights to new charter destinations  including Cairo, Luxor and Tel Aviv.
  • 00:14:23
    Impressed with these aircraft, a further two  “Mad Dogs” were ordered with one arriving in
  • 00:14:27
    December and the fourth the following April. The  167 seat MD-83 was held in high regard by British
  • 00:14:33
    Island Airways, it was quieter and seen as more  comfortable than their existing One-Eleven fleet,
  • 00:14:38
    it had a larger capacity and a greater range  too. BIA and Island Sun were already scouting out
  • 00:14:44
    locations in East Africa which could potentially  be home to some new exotic destinations.
  • 00:14:50
    BIA’s management believed that with the growth of  the Inclusive Tour market as a whole that there
  • 00:14:54
    was bound to grow within it, a sector in which  customers are prepared to pay a reasonable amount
  • 00:14:59
    extra for a product of genuine higher quality.  It also felt that this demand was likely in
  • 00:15:04
    the relatively affluent South East of England, in  other words the area around their Gatwick base…
  • 00:15:10
    Island Sun, following a management shake up,  had begun to focus more and more on premium
  • 00:15:14
    packages with their BIA flights having “club” type  catering with free drinks provided to passengers.
  • 00:15:20
    Island Sun also began selling package holidays to  the Caribbean and Mexico under their new “Simply
  • 00:15:26
    Exotic” brand. Naturally BIA couldn’t provide  transatlantic flights and so passengers were
  • 00:15:31
    put onto scheduled US airlines where once in the  States could connect on to their destination.
  • 00:15:36
    As their plans for a large scheduled  route network were now fairly knackered,
  • 00:15:40
    combined with their additional MD-83s BIA found  itself with too many planes and not enough work.
  • 00:15:46
    Two One-Elevens were duly shipped over to France  on a year long lease, a clever move as BIA would
  • 00:15:51
    earn more through that than operating them for  themselves. At the same time the airline reduced
  • 00:15:56
    its nighttime operations, whilst also increasing  their charter fees for those flights. The effect
  • 00:16:01
    was twofold, BIA would make better margins on  these flights but also had more recovery room
  • 00:16:06
    padded into the schedules should there be any  overnight disruption like the year before.
  • 00:16:10
    1989 saw some shakeup in both the  charter and inclusive tour market,
  • 00:16:15
    several companies had merged or gone out of  business. Others, such as Owners Abroad had
  • 00:16:19
    instead directed more holidaymakers onto their own  in-house airline, Air 2000. The BIA management had
  • 00:16:25
    always seemed pretty “on the ball” and began  to offer a consolidation service to various
  • 00:16:30
    tour operators. Basically, instead of relying  on a tour operator to charter a whole aircraft,
  • 00:16:35
    BIA would instead offer small blocks of seats  to tour operators. For just a minor increase in
  • 00:16:40
    administrative effort this move increased BIA’s  aircraft utilisation and also found support from
  • 00:16:46
    the Association of Independent Tour Operators.  It was a popular move, smaller tour operators
  • 00:16:52
    who had been either priced out or declined access  to the in-house airlines of other tour operators,
  • 00:16:56
    unable to afford to charter an entire aircraft  for themselves had to find seats on carriers
  • 00:17:01
    such as Dan-Air, an airline who will be covered  in a future episode but also had the dubious and
  • 00:17:05
    somewhat unfair nickname of “Dan Dare”. Now, these  smaller companies, some of which were little more
  • 00:17:11
    than family run travel agencies could get a fair  price on airline seats and have a chance to grow.
  • 00:17:17
    During the year BIA introduced “Island  Class” on its scheduled routes,
  • 00:17:21
    the service aimed to provide a high quality  service to its business travellers. Island Class
  • 00:17:25
    passengers would receive a glass of champagne to  welcome them onboard along with a complimentary
  • 00:17:29
    newspaper and an enhanced food service  with a hot meal and complimentary drinks.
  • 00:17:34
    In an attempt at keeping their growing capacity  in check, the airline sold two Four Hundred series
  • 00:17:39
    One-Elevens to Okada Air of Nigeria. These  would be balanced out with the return of the two
  • 00:17:44
    aircraft that had been on lease to TAT of France.  The airline’s fourth MD-83 would be delivered in
  • 00:17:50
    March, later one of the fleet would be chartered  by Air Tanzania for a month that December.
  • 00:17:55
    BIA had on several occasions over the years  been approached by various parties regarding
  • 00:18:00
    the takeover of the company, according to  Managing Director, Peter Villa “on average,
  • 00:18:05
    two or three proposals a year, some genuine, some  not so genuine”. International Leisure Group,
  • 00:18:10
    owner of Air Europe and a BIA customer had been  in serious talks with regard to acquiring BIA.
  • 00:18:16
    Air Europe had begun as a charter  airline but had expanded massively,
  • 00:18:20
    expanding into scheduled operations  and even had long-haul ambitions.
  • 00:18:24
    They saw BIA as an ideal takeover target, while  BIA didn’t have much of a scheduled route network
  • 00:18:30
    it was the fourth largest slot holder at an  increasingly congested Gatwick. Acquiring them
  • 00:18:35
    would give them these crucial slots which they  could use to expand their own scheduled services.
  • 00:18:40
    At the time ILG, the UK’s second largest tour  operator was still a fairly big customer of
  • 00:18:45
    BIA despite having its own airline, a secondary  benefit of acquiring BIA would be that ILG could
  • 00:18:51
    have complete control of its charter capacity and  scheduling. Despite protracted talks of nearly a
  • 00:18:56
    year, an agreement just couldn’t be reached and  the two companies went their separate ways.
  • 00:19:01
    As the next decade dawned things started to  look a bit bleak for British Island Airways,
  • 00:19:05
    well the industry in general to be fair. While  the UK hadn’t technically hit the recession yet,
  • 00:19:10
    the economy had begun to slow down. A side effect  of this was that less people could afford to book
  • 00:19:15
    a holiday, leading to a decline in the inclusive  tour market. The ongoing crisis in the Gulf,
  • 00:19:20
    combined with Saddam’s sabre rattling made war  look increasingly likely, further putting people
  • 00:19:25
    off travelling overseas. Oil prices began to rise,  in turn so did the price of jet fuel which further
  • 00:19:31
    put the squeeze on BIA. Having taken a big  hit on finances over the last couple of years,
  • 00:19:36
    combined with some large single time expenses  and losing tour operator customers to their own
  • 00:19:40
    in-house airlines British Island Airways ceased  operations on Thursday 01st February 1990.
  • 00:19:47
    So what went wrong? British Island Airways had been well managed,
  • 00:19:52
    the airline’s expansion had been carefully planned  and the airline was pretty much “living within its
  • 00:19:56
    means”. BIA had been profitable every year since  the 1982 management buy-out until 1988 when it
  • 00:20:03
    made its first loss, and a big one at that, just  shy of £2.9 million. There was a good reason for
  • 00:20:09
    that however, BIA had signed a deal on some new  MD-83s and while they were leased rather than
  • 00:20:14
    owned, they still had to pay deposits on them.  The company also made some big ticket purchases
  • 00:20:19
    which at the time made sense, in January 1988  they spent £2.1 million on a new headquarters.
  • 00:20:26
    The 1.9 acre site, adjacent to Gatwick Airport  would be home to not just the airline but it’s
  • 00:20:30
    tour operator, Island Sun which would move over  from an expensive site in central London. The
  • 00:20:35
    introduction of the MD-83 meant spare parts would  be required, BIA having already spent one million
  • 00:20:41
    Pounds on spares spent a further £1.34 million on  a spare engine. All of these expenses made sense
  • 00:20:47
    and were perfectly justified, unfortunately  they ate into their cash reserves at a time
  • 00:20:51
    when things were starting to go south. Despite the airline’s expenditure, it was
  • 00:20:55
    still expected to have been profitable during the  year however it was hit hard by both the nighttime
  • 00:21:00
    closure of Gatwick’s main runway and subsequent  reduction in capacity, as well as the implosion
  • 00:21:05
    of European ATC which had been struggling to  cope with an ever increasing number of flights.
  • 00:21:10
    There were also problems at McDonnell Douglas  resulting in the late delivery of some of the
  • 00:21:14
    new “Mad Dogs” meaning BIA was forced to  charter aircraft from other operators.
  • 00:21:18
    The biggest issue for the airline was that two  of its main customers formed their own airlines,
  • 00:21:23
    Air UK Leisure and Air 2000. This wasn’t really a  problem at first, however both airlines gradually
  • 00:21:29
    expanded, taking passengers away from BIA.  As the economy began to slide in 1989,
  • 00:21:35
    Viking and Owners Abroad would rely more on  their in-house airlines, reducing costs and
  • 00:21:39
    boosting their own airline businesses. It was a combination of factors all coming
  • 00:21:44
    together at once which led to the demise  of the airline. The airline’s move to new
  • 00:21:48
    headquarters was a sensible one as well as the  investment in new aircraft and associated spares,
  • 00:21:53
    the problem was these huge expenses ate the  companies financial reserves. In theory this
  • 00:21:59
    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.
  • 00:22:09
    Then the IT holiday market imploded thanks in  part to the imminent kicking off of the Gulf War.
  • 00:22:14
    BIA’s main customers shifted more passengers onto  their own in-house airlines, add to that BIA had
  • 00:22:20
    moved away from whole aircraft charters meaning  that the airline was left operating half empty
  • 00:22:25
    aircraft on behalf of other tour operators. It is rather frightening how a well managed
  • 00:22:30
    airline collapsed so quickly, some have speculated  that they would have fared better if they had made
  • 00:22:35
    a deal with the International Leisure Group.  What some seem to forget is that ILG were
  • 00:22:39
    now in their Tony Montana in Act III phase and  would themselves collapse the following year.
  • 00:22:45
    BIA had previously depended too much on contracts  with third party tour operators, they tried to
  • 00:22:50
    correct this by moving away from whole aircraft  charters and instead selling blocks of seats in
  • 00:22:55
    bulk to tour operators. While this opened up the  airline to smaller firms it also increased the
  • 00:23:00
    airline’s exposure to reduced demand, prior to  this change the single tour operator chartering
  • 00:23:05
    the whole aircraft assumed the cost, BIA was paid  the same regardless of if it had one passenger or
  • 00:23:11
    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.
タグ
  • British Island Airways
  • Air UK
  • charter operations
  • BAC One-Eleven
  • Gulf crisis
  • airlines
  • management buy-out
  • 1980s recession
  • tour operators
  • scheduled flying