This article was published in 2019 in a series on the history of British Airways and its predecessors Imperial Airways, BOAC and BEA. You can browse all 100 stories in number order, by theme or by decade.
Many have been updated since first published.
The deregulation of the aviation market in Europe in the 1990s saw a rise in a number of low cost airlines.
easyJet was founded by Stelios Haji-Ioannou in 1995. Ryanair reinvented itself as a low cost airline. Even Sir Richard Branson got in on the act acquiring EuroBelgian airlines and rebranding it as Virgin Express.
BA, under the leadership of Bob Ayling, decided to join the party. It appointed the highly regarded Barbara Cassini, who had previously held management positions at BA at Gatwick and in North America, to set up a new low cost airline.
Pretty much everyone, inside and outside BA, was against the project from the outset.
BA senior managers feared that it would cannibalise revenue from existing BA operated services. There had already been industrial relations tensions in BA due to cost cutting initiatives and it was feared that unions would regard the airline as a trojan horse and provoke further conflict.
However, when board approval finally came, the name for the airline was chosen as “Go” and its first base was London Stansted.
All of BA’s low cost competitors argued that the airline was simply using Go to undercut rivals and drive them out of business. easyJet tried to obtain a court injunction to stop BA from acting as a guarantor to leases of Boeing 737 aircraft. It also ran a public advertising campaign “Stop BA. Stop Go.” and “Fly the Real Thing. GO Easyjet.” against the airline.
When it launched its inaugural flight from London Stansted to Rome in May 1998 the rivalry between Go and easyJet did not dissipate. easyJet, including Stelios Haji-Ioannou, had block booked ten seats on the inaugural flight and turned up in orange boiler suits, providing a valuable photo opportunity for both airlines.
However, the airline was well received by passengers winning plaudits for its friendly customer service as well as all important details such as coffee offered from a cafetiere and its “one line” travel guides in its in-flight magazine.
In many ways BA got a lot right with Go.
It was not the only legacy airline to set up as a low cost airline. KLM set-up Buzz. Delta launched Song and United launched TED. All were ultimately unsuccessful. Whether by accident or design, Go was given a blank sheet of paper by BA and left to get on with it.
It had its own systems and was completely free of restrictive practices that BA has since spent decades trying to rid itself of. Whilst BA had a strong reputation for customer service, it was not known for flexibility – a legacy from its nationalised era. Go had an “all hands on deck” start-up culture.
In spite of claims by competitors, the only connection with BA was that as Go’s shareholder, it supervised its compliance with safety procedures and its strap line was “The low cost airline from British Airways” – which instilled confidence amongst passengers who were wary about flying on low cost airlines.
Go did many things that low cost airlines at the time didn’t. It offered allocated seating, one of the biggest barriers to using low cost airlines at the time.
Go’s branding was smart, clean, uncluttered and had pan-European appeal. easyJet’s image at the time was cheap and cheerful. Stelios even used to voice his own radio adverts. Low cost airlines have of course since smartened up their image and smoothed the edges of some of the sharper aspects of their customer service.
In spite of everything the airline had going for it following the departure of Bob Ayling and the appointment of Rod Eddington as CEO the decision was made to sell Go. BA did initially hold talks with easyJet but it was sold to 3i in June 2001. Some years later 3i would sell the airline on to easyJet for a very substantial premium.
Looking back in hindsight, it’s hard not to see BA selling Go was one its biggest strategic mistakes.
Of course at the time BA still had a substantial presence at Gatwick with around 40% of slots as well as a large presence at UK regional airports. It also had interests in European airlines Air Liberté and Deutsche BA. However, these were everything that Go wasn’t. They were a complex mesh of airlines acquired over time, with many fleet types and legacy working practices.
What subsequently happened after selling Go was that BA substantially downsized its presence at Gatwick leaving easyJet to go from next to-no presence at Gatwick in 1999 to the dominant airline 20 years later. BA also effectively paid Flybe to take its regional operation off its hands and disposed of interests in Air Liberté and Deutsche BA.
Whilst it is implausible that BA trade unions would have given BA carte blanche to let Go to take over great swathes of BA’s existing operations, had BA retained Go it could have developed into a pan-European low cost airline which IAG has had limited success with Vueling (whose name simply doesn’t work in many territories) and is now trying to achieve with LEVEL.
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