|Quoting TYCOON (Reply 39):|
The UK and France favoured one airline: BA (BOAC) and AF. It is risible that people think Virgin is a real competitor to BA... they only serve a handful of destinations with no European/Regional feed.
I have read an analyzed the Merger and Monopolies Commission on the merger of BA and BCal... it is obvious the government was doing everything to favour a stronger BA to face the other European carries on the eve of European wide deregulation.
I cannot agree with this analysis. When British United Airways merged with British Aviation Services (Silver City Airways and Britavia) in 1962 it became the world's largest airline outside of the USA that was not subsidised by its government. It became instantly larger when it bought Jersey Airlines just four months later.
Major further growth was experienced in November 1964 when BUA took over all the routes of STATE OWNED BOAC to Argentina, Brazil, Chile and Uruguay. This was the first practical move in what I see as the UK governments long standing policy of supporting a duopoly of British airlines.
I see the next step along this route as being in January 1966. That was when BUA commenced domestic services to destinations served by state owned BEA from LON to Glasgow, Edinburgh and Belfast. Although BUA was not granted access to LHR
it is clear these flights were in direct competition with the BEA flights to the same destinations from LHR
. This is because at the time of their launch they did not result in a market that had never existed before.
By the time BUA was sold to Caledonian Airways BUA had extensive networks serving the UK, Europe, Africa and South America. Each of the routes it served required the authorisation of the UK government. Indeed it could only operate under international bilateral service agreements negotiated by the British government. I cannot believe that the British government would have allowed BUA to develop in this way if it really 'was doing everything to favour a stronger BA
' or, indeed, a stronger BEA and BOAC.
Indeed in the late 1960s a parliamentary committee, the Edwards Committee, had made a prime recommendation that what it called a 'Second Force' airline should be allowed to compete with the two state owned airlines on selected routes. While the implementation of this recommendation cannot be described as allowing full, direct competition neither can I see it as 'doing everything to favour a stronger BA
Around 1970 BUA began to experience financial troubles. It entered negotiations with first BEA and then BOAC with a view to a merger before the final deal with Caledonian Airways was achieved. I cannot believe the government would have allowed the talks with BEA or BOAC to fail if they were doing everything possible to favour the state owned airlines particularly allowing a larger competitor to enter the market through the merger of BUA and Caledonian.
The merger between BUA and Caledonian Airways resulted in the formation of British Caledonian Airways in November 1970. This was almost contemporary with the Act of Parliament passed in 1971 that resulted in the merger of BEA and BOAC to form British Airways. BA
operationally came into being on 1 October 1973 under the auspices of the already active British Airways Board.
In 1976 the British government's policy changed from one supporting competition with a duopoly of airlines to that of a duopoly with each airline having its own sphere of influence.
This change in policy required, for example, BCal to withdraw from its routes to East Africa where it was flying in competition with BA
. It also had to cease its LON-JFK
amongst several other services.
BCal's 'sphere of influence' included Africa (excluding East Africa) and all of South America. So BA
had to hand over its services to Lusaka as well as all their routes to Columbia, Peru and Venezuela. Again I cannot see that the government requiring BA
to hand over these routes to BCal can be in anyway compatible with a policy of doing everything possible to favour a stronger BA
resulted in BCAL being designated as the only British airline allowed to operate LGW
, two USA destinations that the agreement did not permit to be served from LHR
. Again giving BCal exclusive rights to operate to these two destinations is. I believe, flying in the face of the assumed policy of doing everything in favour of a stronger BA
came into force in 1979 and named the airlines that were allowed to operate between LHR
and named USA cities (not airports). This effectively excluded VS
from operating LHR
-USA after the formation of the airline in June 1984. Nevertheless when the USA needed to renegotiate Bermuda II
with the demise of the two nominated US airlines, PA and TW
, the British government, despite its alleged policy of doing everything to favour a stronger BA
only agreed to the request by the USA to allow AA
to operate LHR
-USA if the UK were allowed to add a second British airline, VS
, to the permitted list. Adding a second British airline to thos allowed to operate to the US from LHR
is clearly not doing everything in favour of a strong BA
The perception that VS
is not a competitor to BA
is clearly mistaken, In the main that is exactly what it is. Has it ever launched a new service from LHR
to any destination not already served by BA
? I do not think so. Has it tried short-haul routes in competition with BA
like those to ABZ
? Yes. Does it fly between LHR
and long-haul destinations already served by multiple BA
flights. Yes. Has its founder. Richard Branson attacked BA
verbally at virtually every possible occasion? Probably. Indeed, although it may be a little exaggerated it could be said that the base VS
business plan, at least until Kreeger was appointed CEO, was to compete with BAfrom LHR