British Airways plc (BA) is the flag carrier airline of the United Kingdom, based in London, England. It is headquartered at the Waterside building, adjacent to its main hub at Heathrow Airport.
The airline is the second largest UK-based carrier, based on fleet size and passengers carried, behind easyJet. In January 2011, BA merged with Iberia, creating the International Airlines Group (IAG), a holding company registered in Madrid, Spain. British Airways was the first passenger airline to generate more than US$1 billion on a single air route in a year.
In 1972 a British Airways Board was established by the Government of the United Kingdom to manage the two nationalised airline corporations, British Overseas Airways Corporation and British European Airways, and two regional airlines, Cambrian Airways and Northeast Airlines. On 31 March 1974, all four companies were merged to form British Airways. BA was privatised in February 1987 as part of a wider privatisation plan by the Thatcher government. The carrier expanded with the acquisition of British Caledonian in 1987, Dan-Air in 1992, TAT European Airlines in 1993 and British Midland International in 2012.
The company has received public support, including a bailout equivalent to £300 million during the COVID-19 crisis. After the bailout, the company was a recipient of funding through the UK's furlough scheme, as well as receiving an additional £2 billion in a state backed loan in 2021.
History
The corporate lineage of British Airways goes back to five airlines established in the United Kingdom between 1916 and 1922. The first of these, Aircraft Transport & Travel (AT&T), began the world's first daily international commercial air service from London to Paris on 25 August 1919. The five airlines merged in 1924 and several other airlines were established and merged during the 1930s and 1940s. The mergers and acquisitions resulted in two state-owned airlines, the British Overseas Airways Corporation (BOAC), formed in 1939, and British European Airways (BEA), formed in 1947.
Proposals to establish a single British airline, combining the assets of the BOAC and BEA, were first raised in 1953 as a result of difficulties in attempts by BOAC and BEA to negotiate air rights through the British colony of Cyprus. Increasingly BOAC was protesting that BEA was using its subsidiary Cyprus Airways to circumvent an agreement that BEA would not fly routes further east than Cyprus, particularly to the increasingly important oil regions in the Middle East. The chairman of BOAC, Miles Thomas, was in favour of a merger as a potential solution to this disagreement and had backing for the idea from the Chancellor of the Exchequer at the time, Rab Butler. However, opposition from the Treasury blocked the proposal.Robin Higham, Speedbird: The Complete History of BOAC (London: IB Tauris, 2013) p.117
Consequently, it was only following the recommendations of the 1969 Edwards Report that a new British Airways Board, managing both BEA and BOAC, and the two regional British airlines Cambrian Airways based at Cardiff, and Northeast Airlines based at Newcastle upon Tyne, was constituted on 1 April 1972.Cambrian Airways – The Welsh Dragon: New routes and turboprops Airliner World September 2012 page 71 Although each airline's branding was maintained initially, two years later the British Airways Board unified its branding, effectively establishing British Airways as an airline on 31 March 1974.
Following two years of fierce competition with British Caledonian, the second-largest airline in the United Kingdom at the time, the Government changed its aviation policy in 1976 so that the two carriers would no longer compete on long-haul routes.
British Airways and Air France operated the Concorde, the world's first supersonic aircraft that first carried passengers on 21 January 1976 from London Heathrow to Bahrain. Services to the United States began on 24 May 1976 with a flight to Washington Dulles, and flights to New York JFK followed on 22 September 1977. Service to Singapore was established in co-operation with Singapore Airlines as a continuation of the flight to Bahrain. Following the crash of Air France Flight 4590 and the 11 September attacks, British Airways decided to cease Concorde operations in 2003 after 27 years of service. The final commercial Concorde flight was BA002 from New York-JFK to London-Heathrow on 24 October 2003.
In 1981 the airline was instructed to prepare for privatisation by the Thatcher government. Sir John King, later Lord King, was appointed chairman, charged with bringing the airline back into profitability. While many other large airlines struggled, King was credited with transforming British Airways into one of the most profitable air carriers in the world. In December 1983, British Airways plc was formed with the government holding all of the shares.British Airways plc takes off Australian Aviation issue 23 June 1984 page 53 BA was privatised and was floated on the London Stock Exchange in February 1987. British Airways effected the takeover of the UK's "second" airline, British Caledonian, in July of that same year.
The formation of Richard Branson's Virgin Atlantic in 1984 created a competitor for BA. The intense rivalry between British Airways and Virgin Atlantic culminated in the former being sued for libel in 1993, arising from claims and counterclaims over a dirty tricks campaign against Virgin. This campaign included allegations of poaching Virgin Atlantic customers, tampering with private files belonging to Virgin, and undermining Virgin's financial reputation in the city. As a result of the case BA management apologised "unreservedly", and the company agreed to pay £110,000 in damages to Virgin, £500,000 to Branson personally and £3 million legal costs. Lord King stepped down as chairman in 1993 and was replaced by his deputy, Colin Marshall, while Bob Ayling took over as CEO. Virgin filed a separate action in the U.S. that same year regarding BA's domination of the trans-Atlantic routes, but it was thrown out in 1999.
In 1992 British Airways expanded through the acquisition of the financially troubled Dan-Air, giving BA a much larger presence at Gatwick Airport.BA takes over Dan-Air Australian Aviation issue 83 December 1992 page 21 In January 1993 it purchased a 49% shareholding in TAT European Airlines.BA extends further Australian Aviation issue 82 November 1992 page 18
British Asia Airways was formed in March 1993 to operate between London and Taipei.BA to Taiwan Australian Aviation issue 85 April 1993 page 23 That same month BA purchased a 25% stake in Qantas and, with the acquisition of Brymon Airways in May, formed British Airways Citiexpress (later BA Connect).
In 1996 BA took up an option to purchase the remaining 51% in TAT European Airlines and acquired a $67 stake in Air Liberte.BA buys out TAT Australian Aviation issue 121 September 1996 page 21British Airways acquires Air Liberte Australian Aviation issue 124 December 1996 page 24
In September 1998, British Airways, along with American Airlines, Canadian Airlines, Cathay Pacific and Qantas, formed the Oneworld airline alliance. Oneworld began operations on 1 February 1999, and is the third-largest airline alliance in the world, behind SkyTeam and Star Alliance.
Bob Ayling's leadership led to a cost savings of £750 million and the establishment of a budget airline, Go, in 1998. The next year, however, British Airways reported an 84% drop in profits in its first quarter alone, its worst in seven years. In March 2000, Ayling was removed from his position and British Airways announced Rod Eddington as his successor. That year, British Airways and KLM conducted talks on a potential merger, reaching a decision in July to file an official merger plan with the European Commission. The plan fell through in September 2000. British Asia Airways ceased operations in 2001 after BA suspended flights to Taipei. Go was sold to a management buyout backed by 3i in June 2001. Eddington would make further workforce cuts due to reduced demand following 11 September attacks in 2001, and BA sold its stake in Qantas in September 2004.BA sells Qantas stake Australian Aviation issue 211 November 2004 page 18 In 2005 Willie Walsh, managing director of Aer Lingus and a former pilot, became the chief executive officer of British Airways. BA unveiled its new subsidiary OpenSkies in January 2008, taking advantage of the liberalisation of transatlantic traffic rights between Europe and the United States. OpenSkies flies non-stop from Paris to New York's JFK and Newark airports.
In July 2008, British Airways announced a merger plan with Iberia, another flag carrier airline in the Oneworld alliance, wherein each airline would retain its original brand. The agreement was confirmed in April 2010, and in July the European Commission and United States Department of Transportation permitted the merger and began to co-ordinate transatlantic routes with American Airlines. On 6 October 2010 the alliance between British Airways, American Airlines and Iberia formally began operations. The alliance generates an estimated £230 million in annual cost-saving for BA, in addition to the £330 million which would be saved by the merger with Iberia. This merger was finalised on 21 January 2011, resulting in the establishment of International Airlines Group (IAG), the world's third-largest airline in terms of annual revenue and the second-largest airline group in Europe. Prior to merging, British Airways owned a 13.5% stake in Iberia, and thus received ownership of 55% of the combined International Airlines Group; Iberia's other shareholders received the remaining 45%. As a part of the merger, British Airways ceased trading independently on the London Stock Exchange after 23 years as a constituent of the FTSE 100 Index.
In September 2010 Willie Walsh, now CEO of IAG, announced that the group was considering acquiring other airlines and had drawn up a shortlist of twelve possible acquisitions. In November 2011 IAG announced an agreement in principle to purchase British Midland International from Lufthansa. A contract to purchase the airline was agreed the next month, and the sale was completed for £172.5 million on 30 March 2012. The airline established a new subsidiary based at London City Airport operating Airbus A318s.
British Airways was the official airline partner of the 2012 Summer Olympics. On 18 May 2012 it flew the Olympic flame from Athens International Airport to RNAS Culdrose while carrying various dignitaries.
On 27 May 2017, British Airways suffered a computer power failure. All flights were cancelled and thousands of passengers were affected. By the following day, the company had not succeeded in reestablishing the normal function of its computer systems. When asked by reporters for more information on the ongoing problems, British Airways stated "The root cause was a power supply issue which our affected our IT systems – we continue to investigate this" and declined to comment further. Willie Walsh later attributed the crash to an electrical engineer disconnecting the UPS and said there would be an independent investigation.
Amidst the decline in the value of Iranian currency due to the reintroduction of U.S. sanctions on Iran, BA announced that the Iranian route was "not commercially viable" and ended services to Iran on 22 September 2018.
In 2018, British Airways partnered with British tailor and designer Ozwald Boateng to redesign the company's historic uniforms, in honour of its approaching centenary, creating a new look for BA, while adhering to its traditional style. The new collection "A British Original" was launched in 2023.