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British Caledonian was an airline formed from the merger in 1970 of British United Airways and Caledonian Airways. It was formed to compete on international routes against the state monopoly carriers BEA and BOAC. The airline's base was Gatwick Airport, and as an inheritance of the Caledonian Airways roots, there was also an extensive hub operated from Prestwick Airport.

In 1975, when BEA and BOAC were merged into British Airways, BCal found itself under intense monopolistic pressure (see also Laker Airways). Despite this pressure it carried on flying, but never got the government protection or financial support that British Airways received.

British Caledonian created two subsidiary companies to expand into different market segments without diluting its core Scheduled International Airline brand. These were a charter subsidiary and a commuter subsidiary. This was typical in the '70s and '80s when the expanding British charter market was seen as lower class and the scheduled international market was seen as upper class and jetset.

The charter subsidiary was successful, and because it (almost uniquely at the time (for a UK charter airline) operated widebody DC-10s, allowed the airline to economically open the Caribbean and Florida holiday markets to UK package holiday customers. Before its demise, the airline was the 2nd largest international carrier of UK, operating to a number of destinations in Africa, South America, USA and Far East, such as Los Angeles, Houston, Dubai and Hong Kong, using DC-10 and 747-200 aircraft.

In the 1980s, BCal became a major launch company for the Airbus A310 and ordered Airbus A320, the A310 was flown successfully during the mid-1980s, but before the delivery of A320 (first delivery to launch customer Air France March 1988). In 1986-87, the company entered a severe financial crisis with much of its cash locked in the African states (such as Nigeria) that has become the airline's major market. Negotiations took place with SAS to form an alliance. British Airways took advantage of the situation to expand the airline by buying the airline (legally merging the two airlines and the British Airways charter operation British Airtours which was based at Gatwick). The tight control of Heathrow landing slots and government restrictions on the charter operation had hampered growth and a full schedule operation at Gatwick was seen as a solution to all these issues. British Caledonian continued to operate throughout the period, surviving financially by selling and leasing back many of their assets.

British Caledonian charter operation was not bought by BA; it continued to operate as a separate organisation as did the flight training school also based at Gatwick Airport. The management of BA had decided at that time to pull out of the charter market which was highly competitive and not sustainable given BA's staff costs.

The A320s on order were delivered to British Airways after the merger took effect in April 1988. Acquisition by British Airways caused some amusement in the aviation industry as BA had resolutely avoided buying Airbus aircraft (often creating rumours of significant sweeteners from Boeing to keep BA as a Boeing jet only company.)

British Airways then absorbed the international scheduled part of BCal into BA. Challenges to the acquisition of routes by other British airlines diluted the advantages of the merger when the government of the day ruled that many of the routes (particularly the feeder European routes into Gatwick) had to be handed over to competitors.

Inside joke

Former employees of British Caledonian, who are now in employment with British Airways, when asked about the take over often curtly reply - "That it was not a take over, it was a merger they took British from Caledonian and the Airways from British Airways to form British Airways."

External link

• History of Caledonian Airways

• Defunct airlines of the United Kingdom
• Airlines of the United Kingdom