BA100: 72. Privatisation And The “Wall Street” Era

100 Years Of British Airways: 1987, the year of Big Bang, “Greed is good” and BA’s privatisation.

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British Airways, "The World's Favourite Airline", 1983.
British Airways, “The World’s Favourite Airline”, 1983.

1987, the year of “Big Bang”, “Wall Street” and BA’s privatisation.

Nearly ten years after the UK Government first officially announced plans to sell a stake in BA in 1979, the airline was fully privatised on 11 February 1987.

This was the result of a huge turnaround in both financial performance and public perception.

In 1982, the Financial Times quipped that privatisation of BA might lure some investors, but only because “every market sports a few masochists.”

BA was of course a number of state industries to be privatised at the time. Whilst the British Gas privatisation was infamous for the “Tell Sid” adverts on UK television, BA’s was supported a huge marketing campaign around the world in the US, Canada, Japan and Switzerland. The initial share offering was 11 times over-subscribed. 94% of BA employees bought shares in the airline.

“Britain’s Highest Flying Company”

Here is a rather self-congratulatory advert “Monument” from 1987, highlighting BA’s superior financial performance at the time.

More people choose to fly British Airways to more places than ever before. That’s why all around the world it’s saluted as the world’s favourite airline.

In fact, it’s been turned into one of the world’s most profitable airlines.

Even here in Britain one does detect a certain sense of pride in the fact that British Airways is now bringing in a gross revenue of over 300,000 pounds every hour. That’s the kind of success you have to take your hat off to.

The world’s favourite airline is Britain’s highest flying company.

Shareholders have certainly had mixed fortunes since privatisation. BA went for a very long period at the start of this century without paying any dividends as it sought to shore-up its balance sheet. Though many private shareholders did very well out of a discount on flights.

BA remained a publicly listed company until it merged with Iberia in 2011 under the umbrella of International Airlines Group, a company that is resolutely committed to regular returns to shareholders.

1987 was also the year of “Big Bang” when the City Of London was deregulated. Restrictive practices in the City and rules on foreign ownership of stock brokers were abolished. This helped develop London into a major financial centre to rival New York.

It was also that year the film “Wall Street” was released starring Michael Douglas as Gordon Gekko who made the now infamous “Greed is good” speech. “Greed, for lack of a better word, is good. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.”

Pleasant Trip?

You can certainly see the “Wall Street” era influence in a number of BA adverts at the time.

In an advert from 1988 for BA’s new Club World brand, a reflection of the dog-eat-dog culture, a group of colleagues think they have set up a colleague from New York to fail by despatching him on a Red Eye flight to London “Like a lamb to the slaughter, gentleman”.

So, two years in New York and he thinks he can tell us how to run things. Well, we won’t have it.

It’s alright. I’ve fixed things. He’s travelling overnight on the red eye. He had no choice.

Not First Class.

Course not. Company policy.

By the time he gets in, he’ll be exhausted. And he won’t have had time to incorporate those new figures I sent him in his report.

He will be hungry and tired.

I’ve arranged for the chauffeur to bring him straight here, not to the hotel.

Like lamb to the slaughter, gentlemen.

Morning!

New Club World delivers the business man ready to do business.

Pleasant trip?

Yes, thank you.

In another advert a year later, Wall Street imagery features prominently as two businessmen complete a deal in BA’s Club World cabin, away from prying eyes in Manhattan and London.

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