BA100: 25. The Special Relationship

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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.

Whilst the first long haul routes of BA’s predecessor airlines focused on the British Empire in Africa, the Middle East and Asia, ever since advances in aircraft allowed non-stop flights to the US, it has been a very important market for BOAC and is now the single most important market for BA.

However, it has taken a long time for BA to fully exploit this market and secure a transatlantic joint business partner.

BA’s US Route Network In The 1970s

When BA was formed from the merger of BEA and BOAC in 1974, the airline inherited a US route network to Anchorage, Boston, Chicago, Detroit, Los Angeles, Miami, New York, Philadelphia and Washington.

On 2 May 1978, BA reinstated flights to San Francisco, previously served by BOAC until 1969. A new route to Seattle followed in 1980.

In 1985, BA added services to Orlando, Pittsburgh and Tampa.

Through the acquisition of British Caledonian in 1988 BA inherited routes to Atlanta, Dallas / Fort Worth and Houston. For regulatory reasons these had to stay at Gatwick.

In the 1990s, more routes followed with BA serving Newark from March 1990 as international airlines began to add services at the airport. Phoenix and Denver followed in 1996 and 1998 – both initially from Gatwick.

Today, it is the most important market for BA. Aside from economic and cultural links between the UK and the US, BA has geography on its side as Heathrow is positioned to pick up connecting traffic from mainland Europe.

However, it took BA a long time to secure a US transatlantic partner which is vital for offering connections and assisting with the distribution of flights in the local US markets.

Growth in US had been stymied by bilateral agreements between the UK and the US. In spite of the US’s self-styled image as the land of the free market, international involvement in the US domestic aviation market is limited due to foreign ownership restrictions on US airlines.

US Deregulation & Business Class

Until 1978 the US aviation market was highly regulated with the federal government specifying which routes airlines could operate.

Deregulation allowed hitherto domestic airlines to expand into international markets. A string of US airlines launched services from London Gatwick, some more successful than others:

• 1 May 1978: Braniff International launches Boeing 747 service to Dallas / Fort Worth

• 1 May 1978: Delta launches a daily non-stop flight to Atlanta (and on to New Orleans) operated by Lockheed L-1011 TriStar aircraft
  
• 1 June 1980: World Airways launches transatlantic flights using DC-10 aircraft
  
• 4 April 1981: Air Florida launches a service to Miami operated with a DC-10 aircraft
  
• May 1982: American Airlines launches Boeing 747 service to Dallas / Fort Worth
  
• 1983: Arrow Air operates non-stop flights to Denver and Tampa
  
• 27 May 1983: People Express launches low cost Boeing 747 flights to Newark
  
• 29 April 1985: Continental Airlines launches non-stop flights to Houston
  
• July 1985: Eastern launches its first London route to Miami

The introduction of the Boeing 747 allowed airlines to introduce additional cabins on transatlantic routes. This started with dedicated sections for full fare economy passengers.

In 1978 Pan Am introduced “Clipper Class” with the promise of access to dedicated check-in desks, First Class lounges and the next seat free, where possible.

BA soon followed with Club Class which was to later evolve into Super Club.

United Airlines Worldwide Marketing Agreement

On December 1987, BA announced a worldwide marketing agreement with United Airlines.

BA co-located flights from Chicago O’Hare, Seattle and Washington Dulles with United. In turn, United Airlines moved into New York JFK Terminal 7.

Pan Am & TWA Exit London

A bilateral agreement between the UK and the US meant that only two US airlines could operate from Heathrow: Pan Am and TWA.

Both were heavily indebted and reeling from the collapse of international travel following the Gulf War, rising oil prices and, in the case of Pan Am, the aftermath of the Lockerbie disaster.

Pan Am entered Chapter 11 bankruptcy protection in early 1991. It sought to raise around $290 million by selling its London routes to United Airlines. American Airlines purchased TWA’s London routes for $440 million.

London was for Pan Am a major hub with it flying onwards not only to mainland Europe, but also as far afield as Bangkok, Beirut, Istanbul and Tokyo.

The sale of the routes required a renegotiation between the US and UK governments to allow American and United to fly from London Heathrow. This would otherwise render the sale of Pan Am and TWA’s route authorities worthless and cause the two airlines to collapse. 

The UK government felt it had the upper hand given the pressing need for a deal. In theory, the UK was the winner as the US gave UK airlines the right to fly to the US from a limited number of countries in mainland Europe (subject to agreement from these countries), not that this is ever came to fruition until the EU-US Open Skies treaty in 2008. UK airlines also gained greater rights to to fly onwards from the US to Canada, Latin America and Asia.

An agreement to resume talks in a few months’ time to open up the US domestic market to UK airlines unsurprisingly came to nothing.

On 5 April 1991, United began flying from London Heathrow to Miami, New York JFK, San Francisco and Washington. In July 1991, American Airlines followed launching flights from London Heathrow to Boston, Chicago, Los Angeles, Miami, Newark and New York JFK.

Virgin Atlantic also started flying from London Heathrow to New York JFK and Los Angeles from July. Sir Richard Branson dressed up as a pirate, covered a model BA Concorde at Heathrow with a Virgin logo and declared the airport “Virgin Territory”.

BA bristled at Pan Am and TWA being replaced by financially stronger US airlines with larger domestic route networks and Virgin Atlantic gaining access to Heathrow. It prompted the airline to launch its own mileage based frequent flyer programme, having previously been a partner of American and United’s own programmes. 

There had already been tensions between BA and Virgin Atlantic after it gained some of BA’s weekly flights to Tokyo. The relationship soured further with allegations of “Dirty Tricks” by BA against Virgin.

“The Pittsburgh Connection”

In 1993, BA acquired a share in what was then USAir and the two airlines formed a joint-venture.

BA launched daily flights between London Gatwick and Pittsburgh using a USAir Boeing 767 in BA livery and staffed by USAir cabin crew in BA uniforms to connect to over 70 USAir destinations in Pittsburgh. Further services were launched to Baltimore in October 1993 and Charlotte in January 1994.

However, the joint-venture proved to be short-lived with USAir considering it to be unfairly favourable towards BA. After BA declined to renegotiate the terms of the joint-venture, it ended in 1997 with BA disposing of its interest in USAir.

“No Way BA/AA”

After the failure of the USAir partnership, BA turned again to its larger US rival American Airlines.

It took a long time for BA and American to secure regulatory approval for a joint-venture.

In 1999, a three year long effort by BA and American to secure regulatory approval for a joint-venture proved futile. In 2002, BA and American balked at US regulator demands to hand-over 224 weekly take off and landing slots to new competitors. 

In 2010, in spite of vociferous protests from Virgin Atlantic, which once again emblazoned its aircraft with the slogan “No Way BA/AA”, BA and American finally secured regulatory approval with relatively modest concessions.

This was due to the liberalisation of the EU-US transatlantic market in 2008 and the rescinding of the Bermuda II treaty which restricted access to Heathrow to American, BA, United Airlines and Virgin Atlantic. This also allowed BA to move services to Atlanta, Dallas / Fort Worth and Houston from Gatwick to Heathrow.

After the launch of the joint-venture, BA has progressively launched / relaunched new services from London Heathrow to San Diego, Austin, New Orleans, Nashville and Pittsburgh.

Although many BA frequent flyers questioned the merits of the airline partnering with an airline that did used to have a significantly inferior in-flight product to BA, American has made significant investments to renew its fleet and upgrade its aircraft, particularly in business class and with the introduction of premium economy.

Today, the joint-venture has given American Airlines and BA a strong position in the transatlantic market. The combined scheduling strength on major routes from London such as Los Angeles and Miami has undoubtedly had an adverse effect on Virgin Atlantic.

Further developments are expected with American Airlines and BA co-locating at New York JFK Terminal 8 from December 2022.

You can continue reading our 100 part series on the history of British Airways and its predecessor airlines Imperial Airways, BOAC and BEA in numerical order, by theme or by decade.

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