1990
The Dutch national carrier, KLM announced in January that they would be operating direct services from the province to Amsterdam. This was a blow to both British Midland and Dan-Air who provided feeder flights into Heathrow and Gatwick with onward connections to Amsterdam. Dan-Air also flew from Belfast to Newcastle where an onward connection to the Dutch city was operated.
A Portuguese Air Traffic Controllers strike saw 187 passengers stuck at Manchester and 140 in Gatwick. Their flights eventually departed 21 hours late. Other Dan-Air flights to the Canary Islands managed to circumnavigate flights into Moroccan airspace before landing. The Moroccan airspace soon became congested and couldn't cope with demand. A second day of strike action resulted in delays of up to 18 hours for 20 Dan-Air flights.
Thousands of holiday-makers faced a £10 per person surcharge on their summer holidays this year, imposed by Tour Operators who blamed the price hike on the soaring cost of aviation fuel. Currency fluctuation and the general increase in flying costs saw more than 40 Tour Operators apply to the Association of British Travel Agents (ABTA) for approval for the increase. The price of fuel had gone up by 30% during January alone. Dan-Air and Air Europe applied to the Civil Aviation Authority (CAA) to increase air-fares. Cut-throat competition saw several firms hold back from price increases in the hope of attracting new business, but the majority of holidays (80%) were taken using the main Tour Operators: Thomson, Intasun, Horizon, Cosmos and Airtours. ABTA said that because charter airlines were fighting for business many of them were expected to try to absorb the losses. A Dan-Air spokesman said: 'A sharp rise in fares looks inevitable, it seems certain that customers will be affected, but it is impossible to say by how much. Several ski customers have had to pay a surcharge after the pound fell against the Swiss Franc.'
Dan-Air announced that a record 6,275,000 were carried in 1989. There had been increases in charter passengers and scheduled service passengers. Peter Clegg said 'Many of our scheduled services have seen the introduction of jet aircraft which have almost double the capacity of the turboprop airliners that were used previously. We have also upgraded other popular scheduled services with larger jets. On top of that we had a very successful summer period. We have some exciting new plans that will hopefully mean lots more people choose to fly with Dan-Air this year.'
Joan Garnett who, at 59 years old, was believed to be Britain's oldest air stewardess retired this year after flying with Dan-Air for thirty years. Her last flight was a return trip to Paris. Kelvin Kellaway who had, for many years, been Managing Director of Prestwick based Caledonian Airmotive left the company to join Dan-air as Managing Director of Dan-Air Engineering at Lasham. He would also join the Board of Directors at Davies and Newman.
There had been two million people who had purchased a 'seat only' ticket on a charter flight in 1989 compared with half a million in 1987 when rules had changed to allow more 'seat only' passengers on charter flights. the bulk of them had been bought by people who were taking a villa or apartment rental overseas, although there had been an increase in the amount of people who had either purchased outright, or owned a property overseas for a couple of weeks a year as Timeshare owners. This fast expanding category of independent travellers were looking for the lowest priced fare available and didn't care, a survey revealed, whether the flight was a charter or scheduled service. Charter airlines' biggest source was from direct sales from Tour Operators. They were not permitted to sell seats direct to the public. strictly speaking, the flights must only be sold as part of a package holiday. But ways had been found to circumnavigate the rules, such as offering 'basic accommodation' into the price. Typically, this would be a dormitory or shared accommodation with no facilities and at a great distance from the airport, with no transfer offered. Tour Operators had, at the start of the season, booked out blocks of seats on charter flights, with the hope of selling them all as part of a full package holiday. Then, as the departure date comes nearer with holidays still unsold, the Tour Operator becomes nervous about the empty seats that still have to be paid for. Hence the dumping of seats onto the flight only market. The tickets are sold through Travel Agents, or onto 'Bucket Shops' who will sell them via adverts in newspapers. The end result was, that in the end, the charter flight takes-off with all the seats full. Prices got lower at the departure date looms with the last few seats sold at rock bottom prices. ina more orderly fashion, brochures were now being made by Intasun, Monarch Air, Thomson, Airtours, Skyworld, Unijet, Travjet, and Flairfares. Prices were usually the same, with all of the companies saying they would not be beaten on price by a named competitor. the main advantage of booking early was that you had a firm reservation and could go-ahead with making your own 'ground arrangements' - if any! A new halfway house series of flights would commence this year. Mid-way between a charter and scheduled flight. Pilgrim Air would operated regular, year round flights to popular destinations. Some of these 'open jaw' flights would see passengers depart from one UK airport and land in another. A second company - Skybus - would join the market this year, with a third GFT Tours following close behind. They promised that they would undercut legacy airlines by using charter seats on Dan-Air charter aircraft to West Germany and Vienna. Falcon would soon join the market using Dan-Air charter flights to Zurich and Geneva. the fares were so much lower that many business travellers purchased tickets. Scheduled airlines were now having to actively compete against the charter airlines who were being accused of 'creaming off' holiday business. British Airways through Poundstretcher and Air Europe were now offering scheduled flights at almost the same fares as charter carriers. Aircraft capacity had expanded way beyond the number of people who could afford to pay full fares such as business men or the wealthy. Airlines had to turn a blind eye to agencies that sold seats at unofficial prices. Full fare ticket holders enjoyed the luxury of a free bar and the ability to cancel or change dates without penalty, but passengers could save hundreds of pounds if they were willing to buy their own drinks take their own newspaper on board - and accept the date was fixed.
British Island Airways sensationally went bust on February 1st with losses reported to be in excess of £10 million. In a dramatic statement, BIA said that they had instructed their bank, Lloyds to appoint Touche Ross as the official receiver. Lloyds were also the bankers for Dan-Air and Air Europe. The airline's 400 employees were effectively unemployed and passengers overseas would be flown home by another airline. This brought to an end three months of trying to save BIA from a heavy slump in the holiday charter market and high interest rates. In December of 1989 it was believed that BIA had been saved after the promise of a £30 million cash injection from banks, but the fate of the rescue money was now unclear. Touche Ross had arrived at BIA that afternoon and were said to be 'assessing the situation' No further information was given and their shares were suspended. BIA's chairman Peter Villa said he had hopes of a 'strong partner' but that alliance had never materialised. The airline had been used by Prime Minister Margaret Thatcher for two election campaigns
A rescue operation was mounted the following day. A desk was set up at Gatwick airport to assist passengers who were booked on a string of flights to Continental destinations and transfer them onto other flights. Charter passengers who had their flights already paid for by Tour Operators were transferred onto Air Europe and Dan-Air aircraft at no cost. Scheduled passengers were left high and dry and only those who had paid by credit card stood any chance of being reimbursed. Gatwick Handling, the airline's agent posted a sign which read 'Passenger Information Only'. A spokesman for Gatwick Handling said ; 'Everybody seems satisfied with arrangements, we have managed to get everyone away. It was just a matter of giving everyone the information that they needed.'
Lloyds Bank called in receivers when the airline crashed. Christopher Morris, was appointed as the accountant to investigate the airline's affairs he told us:
'Hundreds of passengers who were booked on their scheduled flights were stranded with no hope of financial assistance. Thousands more had their holiday plans thrown into chaos. ABTA said they would have to make their own arrangements. The airline had it's own Tour operator,Island Sun and they were bonded, so they would get home, and those yet to travel would get a refund. the airline had been bought by Pilots and Stewardesses who wanted to break away from Air UK, whom they had merged with in 1980. The carrier had made a profit since year one, £50,000 the first year and more than £2 million in 1987. The airlines had carried 853,000 passengers, which was impressive for a company with four 99 seat BAC 1-11, four 119 seat 1-11 500 series and four MD83 with 155 seats.'
British Island airways had found a niche with their smaller aircraft in a market dominated by larger Boeing 737 jets. These smaller, second-hand BAC 1-11s had much lower acquisition costs (compared with the competition's bigger and newer 737-200s) but they enabled BIA to offer tour operators lower capacity aircraft at keener rates, giving them a competitive advantage on less dense routes. The One-Eleven 400's ability to match the 737-200's range, as well as both One-Eleven variants' ability to match the 737's fuel consumption and to comply with stricter, post-1985 noise abatement rules (as a result of having hush kits fitted to their engines), further enhanced BIA's competitiveness vis-à-vis its rivals. This helped attract business from the big tour operators that owned its rivals, especially to secondary European ski destinations served in winter where the lower trip costs of BIA's older planes outweighed the seat-mile cost advantage of the in-house airlines' technologically more advanced equipment. This in turn helped minimise the tour operators' risk, thereby representing a 'win-win' situation for both parties.
It was later revealed that the company had been in talks with Air Europe parent company International Leisure Group (ILG) for several weeks. ILG had been one of BIA's major contractors for their charter flights. Furthermore, ILG's ownership of BIA would have given the ILG-owned package tour operators, notably Intasun, a greater degree of control over their charter airline seat inventory. In addition, BIA's scheduled route licences to serve Sicily and other niche market destinations in Southern Italy from Gatwick could have potentially aided Air Europe's efforts to further expand the reach of its scheduled route network. However, both parties were unable to reach a firm deal. Ultimately, British Island Airway's inability to become part of a bigger, financially stronger organisation, amid a deep recession in the UK, plus the escalating jet fuel price, and the collapse of the package tour market in the run-up to the Gulf War of 1990, resulted in a 38% reduction in its passengers were the main factors that forced BIA to cease all operations.
Thirty six stranded golfers who were stuck in a plush hotel outside Lisbon as a result of the British Island Airways crash were rescued by Dan-Air who agreed to carry them at a reduced rate. The kindness resulted in a problem of its own, when the aircraft was stuck on the ground for thirty minutes while the golfer's clubs had to be found. Captain Bernard Hicks explained the they clubs would not go into the back of a car: 'We eventually bribed a builder who agreed to take them to the airport in the back of his van. There were 28 sets of clubs - enough to fill a mini bus.'
Throughout February rumours persisted that Air Europe's parent company were about to buy Dan-Air. Company Chairman Fred Newman once again denied that there was any truth in the gossip. Despite this, shares in Davies and Newman soared 20 pence to 225 pence on February 23rd. Two days later sources close to the company leaked a story that Harry Goodman's ILG were actively pursuing Dan-Air, which was the main profit earner for Davies and Newman. The difficult trading conditions for 1989 had seen Dan-Air cut its 4,000 seat charter capacity by 4% for 1990. Analysts had valued Dan-Air at £50 million and claimed most of its turnover came from their charter business. The analysts said that Dan-Air had valuable slots at Gatwick and an excellent scheduled service network. It was claimed that Air Europe wanted to turn its back on charter flights and concentrate on inter-European scheduled flights, which it believed would be the growth area of the nineties. Acquiring Dan-Air would help establish his airline as a major world player. One newspaper claimed that its source had told them that Dan-Air was losing money 'hand over fist'. Interim results had shown a loss of £7.6 million. The sale of the two Airbus A300 had given them a profit over book value, providing them, what the source said, with the only bright spot. Meanwhile, ILG had been a PLC from 1982 until a £150 million management buy out in 1987. The company, made up of Air Europe, Intasun, Lancaster and Global was believed to be worth £220 million.
* Editors notes - The analysts, press and industry players had all been fooled into believing that ILG was an asset rich company. In fact, all but three of their aircraft were not owned by the company. All of the company real estate was rented. Apart from office equipment and runway slots, the organisation was without any assets.
Dan-Air had successfully applied to provide scheduled services between Gatwick and Berlin with flights commencing in March this year. The daily flight would soon become a three times daily return service using Boeing 737 aircraft.
Rumours persisted that Dan-Air's parent company Davies and Newman planned to sell the airline to Air Europe, despite this uncertainty shares rose to 225 on February 21st. sources close to both companies said that Harry Goodman was about to make an offer for the airline. The previous year had seen Dan-Air's 4,000 seat charter capacity cut by 4% following a drop in 1989's package holiday bookings. Analysts had valued Dan-Air at £50,000,000 and they claimed that the majority of revenue came from charter flights. But scheduled traffic had increased and now more that 45 cities were served in eleven countries. The airline had more slot times than any carrier at Gatwick as well. It was speculated that Goodman was turning away from charter flights and wanted to concentrate more on inter-European scheduled flights, which he believed would be the growth market for the 1990s. A source said: 'Last year's bookings were a disaster and shows no signs of improving. D & N must be losing money hand over fist' Interim results showed a loss of £7.6 million in November, but the sale of two Airbus A300 gave Davies & Newman a profit over book value, adding a bright spot to what was expected to be a depressing full year result in April this year. The same analysts valued Air Europe at £220 million. ILG had been taken private in 1987 following am management buy-out of £150 million. (The analysis about Air Europe was wildly incorrect)
Two golfers were found guilty of endangering an aircraft after they placed fireworks inside luggage which went into the hold of a company Boeing 727. Some of the fireworks went off as baggage handlers removed the luggage at Gatwick. The men appeared at Chichester Crown Court and were fined £500 each after endangering an aircraft. Eight more of the fireworks, known as bangers, which exploded upon impact, were found on another Dan-Air flight from Majorca. Dan-Air warned passengers against taking fireworks on board an aircraft.
Australian pop-star Kylie Minogue flew with Dan-Air in March, the airline told the press that they had offered her additional security, and gave her the option of avoiding crowds at either end of her journey, but Kylie turned the offer down. She insisted on stopping to meet fans who had been waiting all day and to sign autographs for fans at Manchester.
It was announced that Dan-Air was withdrawing from the Dublin-London route, citing over capacity from several carriers as the reason. Dan-Air were also under pressure to increase services on other, less populated routes where they could maximise revenue. Five staff at the Dublin office would be offered jobs elsewhere withing the company of made redundant and the office would also close in March. But there would be expansion in the other direction as new shceduled services would commence to Vienna and Berlin. to coincide with the launch of the Berlin service a special offer was introduced which would give you the flight to Berlin on at lunchtime, arriving at 3:30 pm and one nights accommodation at the Berlin Hotel, just ten minutes walk from the Berlin Wall. You would then depart Berlin at 4:40 pm arriving back at Gatwick at 8:15 pm - all for the Princely sum of £79.
The expansion of the scheduled services was nowhere more evident than in Scotland. A second company BAC 1-11 was named 'Scottish Connection' in February at a special ceremony. The other BAC 1-11 based at Inverness was to be called 'Highlander'.
Dan-Air BAC 1-11 fleet stood at eighteen. One travel travel industry journalist bemoaned that airlines were still using what they dubbed as 'geriatric jets' like the One Eleven. Captain Alan Selby gave us a rough guide to fuel costs of several aircraft that were used on European flights.
'The One-Eleven, in a nut-shell was cheap to purchase and worked well on lower density routes. It could also do well with a business cabin with passengers paying almost twice as much. Scheduled services were also permitted to carry cargo. So, on that basis a One Eleven used in this way could be far more profitable than a Boeing 737 on a charter flight of equal distance. We, as an airline knew that even greater results would be the result if we used an airliner such as the British Aerospace 146. But the purchase of those was a lot more expensive than a One Eleven. The One Eleven could not be the solution in the long term, and the conclusion was that we would have a gradual phasing out of One Elevens to be replaced by BAe 146 and the Boeing 727 fleet would be replaced with Boeing 737 - which in the fast paced world of aviation, had seen the 200 model become less desirable with the newer series having significant fuel savings. As ever, the problem for us would be how to get hold of them without financially draining the airline.'
To put this in context: Below is a list of how much fuel (in kilograms) was consumed per hour and the seating capacity on each type.
BAC 1-11 500 - Fuel Consumption 2,800 kg/h (119 passengers - Dan-Air Scheduled 40 Elass Elite - 54 economy)
Boeing 737 200 - Fuel Consumption 2,800 kg/h (130 passengers - charter config)
Boeing 737 300 - Fuel Consumption 2,400 kg/h (149 passengers) (Dan-Air Scheduled 30 Class Elite - 40 Economy - Charter config 161)
Boeing 737 400 - Fuel Consumption 2,600 kg/h (156 Passengers) (Dan-Air Scheduled 30 Class Elite - 66 Economy - Charter config 169)
BAe 146 100 - Fuel Consumption 1,700 kg/h (88 Passengers) (Dan-Air 12-40 Class Elite - 20-62 Economy)
BAe 146 300 - Fuel Consumption 1,920 kg/h (96 Passengers) (Dan-Air 16-40 Class Elite - 46-82 Economy)
Boeing 727 100 - Fuel Consumption 4,140 kg/h (141 Passengers)
Boeing 727 200 - Fuel Consumption 4,500 kg/h (189 Passengers)
Boeing 757 200 - Fuel Consumption 3,320 kg/h (231 Passengers)
Boeing 767 200 - Fuel Consumption 4,500 kg/h (276 Passengers)
Airbus A300 - Fuel Consumption 5,000 kg/h (336 Passengers)
Tristar - Fuel Consumption 5,000 kg/h (350 Passengers)
TU 134 - Fuel Consumption 2,500 kg/h (85 Passengers)
TU154B - Fuel Consumption 6,200 kg/h (135 Passengers)
TU154M - Fuel Consumption 5,100 kg/h (152 Passengers)
As you can see, the Boeing 727 compares quite badly. There was a belief from some pilots that the 727 would have performed better in a scheduled services role, also carrying cargo, with a reduced capacity, two class layout. The Boeing 727 100 series used more than a thousand kilogram of fuel an hour than the Boeing 737 200. There seemed little logic in using a Boeing 727 200 carrying 189 people, when a Boeing 767 could carry 276 people for the same amount of fuel. The Airbus A300 that Dan-Air used only slightly more fuel than the 727 200, but carried 74 more passengers than the Boeing 767. Yet still, Dan-Air chose to reduce the Airbus fleet, in an effort to raise cash. Britannia, Air Europe and all the other charter carriers leased their aircraft; resulting in substantial monthly lease payments to the lessor or manufacturer. Whether the balance sheet tipped in favour of the fully owned aircraft was up for debate. One thing is for sure, if a would be Tour Operator came to Dan-Air requiring an aircraft, to match the competitor's price, Dan-Air would be operating on a vastly reduced profit margin. If there was a profit at all. Airlines from former soviet satellite states such as Bulgaria and Romania benefited from lower fuel prices at home, subsidies from Governments and insisting that their airlines be used on charter flights into their nations. One by one these nations threw off the shackles of Communist domination in the late eighties and in 1990 the last dictatorship in Romania fell. Those countries would now have to compete in the European skies with carriers with great reputations and good profits. Within months of democracy being introduced each national airline purchased western built aircraft.
Helmshore based Airtours had been forced to pay thousands of pounds in compensation to delayed passengers in 1989 were hit by a fresh set of claims after a chartered Dan-Air Boeing 727 200 with 187 passengers on board developed technical issues. DA 1614 to Monastir in Tunisia was delayed for eighteen hours. Passengers were given food and put up in a hotel overnight before the aircraft was given the all clear. Airtours' problems were heightened when other aircraft they had chartered all developed faults. The passengers boarded the aircraft with all but one couple, who had decided to go home. In 1989 Airtours had paid thousands in compensation because an Orionair Boeing 747 aircraft Airtours had chartered repeatedly broke down. That aircraft had been given the unfortunate nick-name 'The Flying Pig'. Jane Shaw of Airtours said: 'There were some hitches but there will not be a knock-on effect which causes more delays. We are not going to have the same problems as last year. We are sorry that the Monastir passengers had a delay with their flight.'
The British Airports Authority introduced major changes this year which saw wide ranging price increases, some as high as 45%. This led to Dan-Air announcing fare increases of up to 7% on scheduled services. A spokesman said: 'It's a sad fact of life that we have had to make these increases, but we reckon seven per cent isn't that bad when you consider some of the charges we have to pay. Fuel charges at over 35% and the interest rate increases haven't helped either. '
Further Stories about a merger between Air Europe and Dan-Air resurfaced in March. Goodman was sourced as saying; acquiring Dan-Air would set him on the right path alongside his Air Europe. The source said that there appeared to be no sign that 1989's down-turn had been reversed and that Dan-Air was losing money. A few days later on March 6th, Dan-Air described the rumours as 'Codswallop' George Yeoman of Dan-Air said 'There is no truth in these rumours whatsoever. All airlines have been hit by the recent down-turn on holiday bookings. There is no reason why we should be taken over.'
In 1990, the worldwide recession started to bite in the UK. One of the first things that people forgo, when times are hard, is their overseas holiday. Holiday bookings were down 40% on the previous year, at the time of the BIA collapse. Press reports said that 'Even industry giant ILG who own Air Europe were feeling the pinch.' It was announced that Air Europe would be using the facilities of Caledonian Airmotive in Prestwick for Maintenance of MD 11 aircraft, It remained to be seen if the airline would continue to use Dan-Air Engineering for work on their Boeing fleet.
Inspectors were put on alert when a company Boeing 737 from Las Palmas landed at Gatwick with a cat loose among baby buggies. Dan-Air were prosecuted by West Sussex Country Trading Standards at Crawley Magistrates for failing to ensure that the cat was secure. Bridgid Dunn, prosecuting, said that the Captain had radioed ahead and David Chappell an animal inspector was called out to meet the flight. He found the cat in a plastic container which had not been secured, surrounded by baby buggies and other types of luggage in the rear of the aircraft hold. the court heard that Dan-Air had allowed a dog to be flown from France in a cage that was too small for it, and three others amongst loose baggage in the hold. Mrs. Dunn said a cross-breed dog was brought from Nice in a cage that was 18 inches too small for it. She said it was carried with a Golden Retriever and a Labrador and that none of the cages were strapped down, nor nose and paw proofed. This meant that the crates would be able to move around the hold and that the ventilation holes were too big allowing the dog to put its nose and paw through them. Mrs. Dunn said that the airline had two previous convictions for illegal landings with animals. Dan-Air pleaded guilty to five charges of failing to ensure that animal containers were safe, and four of failing to ensure that they were sufficiently ventilated. Angus Kilbride, defending, said the airline relied on local agents in Majorca and France to follow safety procedures. Magistrates fined Dan-Air £3,200 and ordered the airline to pay £100 towards prosecution costs.
Air Europe signed a contract 'of substantial value' with Dan-Air on April 30th. The contract was to carry out the maintenance of Air Europe's Boeing 757 fleet. The contract was to last three and a half years. This followed the contract signed the previous year for Dan-Air to maintain Air Europe's Boeing 737 400 series fleet. This was in contrast to earlier press reports that the airline was about to fold. Peter Clegg, an airline spokesman said: 'There is absolutely no truth in the rumour that we are going under, we are the second largest scheduled airline in the country, and we are expanding. This contract is good news for Dan-Air Engineering as it will mean new jobs. So it is good news for Crawley too as the bulk of the work on Air Europe's twelve string fleet would be carried out at our new hanger at Gatwick. It is too early to say how many jobs this will create, but the department will be responsible for ten Boeing 757 aircraft in the Air Europe fleet and their associate airlines in Spain and Italy. Our engineering base at Lasham would also be involved.' Mike Ellis associate Director of Dan-Air Engineering said; 'This is the first major contract where the majority of the work will be predominantly performed out of the new Dan-Air hanger complex at Gatwick Airport.' The engineering division was already involved in the maintenance of more than 100 aircraft of other carrier's fleets as well as the 51 aircraft in their own fleet. This was indeed good news as the company had experienced a difficult year and staff had been told to 'tighten their belts.' Mr. Clegg said it was sad that British Island Airways and Novair had gone under, but that it had been of benefit to Dan-Air in that they had seen an increase in charters far bigger than they had hoped for, and that the company was 'very healthy'. He concluded by saying: 'We are very concerned about rumours about Dan-Air's closure, we fear that they may be being spread by someone who has a grudge against the airline. We are trying very hard to trace the source of these damaging rumours.'
At the end of April, Dan-Air announced their year end financial results; for only the second time in their history the airline reported a loss. The company reported losses of £3.3 million compared to a profit of £9.9 million the previous year. Davies and Newman Chairman Fred Newman blamed high interest rates, curbed travel overseas and an exceptionally hot summer of 1989. He said that over-capacity on some services had not helped either, as this meant they were unable to increase fares. Their charter division was down 7%. Despite this, overall, Dan-Air had maintained their share of the charter market of between 15 and 20%. Turnover was up 11% at £376 million. The sale of two Airbus aircraft had raised £5.1 million and the company sold more than £1 million in surplus spare parts. Share prices tumbled 50 pence to 355 pence (compared to 1989's all time high of 910 pence) Fred Newman said that despite carrying 4.5 million passengers on the charter division, which was only 1% lower than last year. The airline was not able to increase revenue from those charter flights . the reason for this was because they were operating on the same margins as the previous year. This operation was carried out amidst much higher fuel costs. Scheduled services had performed well in spite of increased competition, including having to operate head to head with other British Airlines on some routes had certainly not helped. The cost of launching the new business class cabin, Class Elite had been costly, but worth it as it had been a tremendous success. Almost two million passengers had flown on Dan-Air's scheduled network, an increase of 40%, making the figure the highest ever in the company history. It was also the highest number of scheduled passengers that had ever been carried by a British independent airline.
Terrified holiday-makers fled their holiday jet on May 1st after a fire broke out on take-off. Passengers had to use the emergency chutes to evacuate the jet after the fire forced the jet to return to Gatwick. the flight from Gatwick to Minorca had to make a U-turn after the pilots noticed an acrid smell in the flight deck. Captain Paul Fasani told the passengers to keep calm as he turned the plane back only fifteen minutes after taking off. As smoke filled the BAC 1-11 passengers were given instructions about what to do, and made preparations for evacuation. When the plane touched down all 125 passengers (six were children under two not occupying a seat of their own) evacuated the aircraft in just 55 seconds from exits at the front and rear of the airliner. Dan-Air's head of public relations, George Yeomans said; 'No-one was injured in the evacuation, which was carried out in an excellent manner by our two pilots and four cabin crew. It was a very slick operation and credit must go to the safety drilling that brought everyone to safety in under a minute.' The fire on flight DA 2652 to Mahon was later found to be an electrical fault in one of the generators. all of the passengers were put on another Dan-Air aircraft while a full investigation was carried out. Despite the loss, shareholders were to be paid a dividend of 15 pence per share. A company spokesman said they were aware that they needed new business and that there were negotiations taking place which might take Dan-Air into the long-haul market.
May 1st would see the opening of the new daily (except Saturday) Gatwick-Vienna service. The route was destined to be a great success as it was the only flight between the Austrian capital and Gatwick. Class Elite would feature on all flights. A new innovation - 'Space Generator' seats had now been installed on all aircraft with the 'Class Elite' cabin. Vienna was rapidly growing in importance as a commercial centre especially given its close location to eastern Europe. Flights would depart daily at 0800 am and arrive in Vienna at 11:10 am. the return was 1205 arriving in Gatwick at 1315.
Details of secret talks which had taken place with several airlines were leaked to the press in May. The talks had been between Dan-Air and interested parties, the details of which appeared to be about a take-over or investment opportunity with Dan-Air. the leak resulted in a dramatic increase in the Davies and Newman share price, rising from 150 pence to settle at 575 pence. This increased the value of Davies and Newman on the Stock Exchange from £10 million to £40.3 million. Exactly who was involved in the takeover talks was initially unclear. It was rumoured that both British Midland Airways and British Airways were not involved as they knew any such merger would be referred to the monopolies and mergers commission. Aviation insiders believed that a European or American airline would be most likely to buy Dan-Air, as it was the easiest way to get into the already congested airports of Gatwick and Heathrow. These carriers would also be aware that Dan-Air had massive hanger space at both Gatwick and Manchester. Dan-Air went to great lengths to reassure would be holiday-makers with a spokesman saying: 'The current talks will in no way jeopardise any contractual arrangements we have with our customers. We are a controlled company, in other words, we have various family trusts and directors who together hold a majority shareholding in excess of 60% so we are in control of our destiny.'
Captain Bob Dearling saved hiss passengers lives when he put his HS 748 prop-liner in a nose-dive to avoid a mid-air collision with two American fighter jets. The near miss had occurred over Germany on 2nd May and Dan-Air announced to the press on May 24th that they had made a formal complaint to the West German and American Authorities. Captain Dearling landed the aircraft safely with passengers lining up to shake his hand. Captain Dearling and his First Officer, Miles Harrison had started their descent into Saarbrucken when he was forced to take the evasive action to avoid a crash after the jet came within 50 feet of his aircraft. Several passengers including one child and a crew member out of their seats. One of the 16 passengers on board, a German business man was concussed as he was thrown forward. The incident occurred over Saarbrucken which was the destination of the airliner which had departed on a scheduled flight from Berlin. An investigation was launched by the West German authorities. A Dan-Air spokesman said Captain Dearling was under radar control of the US Air Force at the Ramstein Air Base. Two F-15 jets were in the same airspace as the Dan-Air aircraft. The military aircraft were later identified as being from the 36 Tactical Fighter Wing based in Bitburg, West Germany. A Dan-Air spokesman said: 'Captain Dearling acted coolly and courageously in avoiding a tragedy.'
Captain Dearling said 'We were on a radar heading from them. We had been cleared to descend from 10,000 to 8,000 feet. Radar control came on the radio and said they had radar contact in a ten o''clock position. The First Officer and I looked and we saw two fighter jets flying as a pair, and they appeared to be at our level, at ten o'clock, heading directly towards us. I took a decision that I had to avoid them - quickly. when we first saw them we were quite close, so I felt that I had to make an abrupt descent. I pushed forward on the control column, a lot faster than we would normally do. I wouldn't describe it as a nose-dive, but a rapid drop of some 400 feet in total. Between two and five seconds into the manoeuvre the two jets went by, the leader passed over the top of us. It was very close, we couldn't see their faces, but we could see the cockpits. we could see that they were twin-tailed fighters basically in a grey colour. There was no time for any emotion to go through my mind, it all happened so quickly. There wasn't any time for reflection either, as I was flying the same route the next day. I only returned home from duty three days later. I phoned my wife, Abigail, to tell her what happened afterwards. As there was an investigation to be carried out, I was not permitted to talk about the rights and wrongs, but my only concern was that the incident had caused two of the passengers to bump their heads on the aircraft ceiling. but I had no way of giving them any warning. But passengers should always have their seat belt fastened in case of any turbulence or sudden incident. when I went into the cabin afterwards to explain what had happened I was met with a cheer. The passengers were lining up to shake our hands in thanks.'
*Editor's Note. The following year Captain Dearling was awarded a gold medal the following year for his bravery. The Prime Minister Margaret Thatcher attended the ceremony. Dan-Air's Peter Clegg said that Captain Dearling was such a modest man, he hadn't reported the matter to staff other than the normal regulatory notifications. Reports followed that the American Air Force had not revealed who in their force was to blame. Captain Dearling received the Daily Star Gold Medal in the presence of Ernie Wise, Sir Alistair Burnett , Barry McGuigan and others.
Above: Captain Dearling is awarded the medal from Mrs. Thatcher.
Dan-Air announced that they would be withdrawing from the Inverness-Manchester-Gatwick service, that had been in operation for only fourteen months. Instead, they would be concentrating on the Gatwick-Manchester route which had far better yields. The successful Inverness-Heathrow and the Aberdeen-Gatwick services would increase frequencies. Dan-Air revealed that only 7% of passengers at Inverness had opted for the Gatwick service over Heathrow. The Inverness-Heathrow route had been so successful, that not only had frequencies increased they were now increasing capacity on all flights.
A raft of new route licences were sought in May, with applications for Manchester, Tees-Side and Newcastle to Berlin. Tegal Airport in West Berlin had long been established as a charter base for Dan-Air who supplied flights for the majority of West German Tour Operators and the The GTF (German Tourist Facility.) Dan-Air executives thought it was a good idea to expand scheduled services out of West Berlin beyond the Saarbrucken, Amsterdam and London services. Applications were therefore submitted for licences from Berlin to Moscow, Budapest, Prague, Warsaw and Bucharest. The former Communist states had opened up to the west and Dan-Air was ideally placed to become a major airline in the region. George Yeomans, Dan-Air's Public Relations chief said: 'It is our intention to capitalise on our Berlin Tegal base.' - Ultimately the applications were rejected.
Britannia Airways announced that there would be 250 redundancies this year after a difficult twelve months trading for the entire industry. Dan-Air, keen to shake off rumours that they were about to go bankrupt, issued a statement saying; 'Consideration is being given to the possibility of greater co-operation between Dan-Air and other airlines. As part of this process the company is in discussion with a number of interested parties and those discussions may or may not lead to an offer being made for the company. It is emphasised that such an offer is only one of several possible outcomes from such discussions.' The rumours saw Davies and Newman's share price soar by 100 pence to 525 pence per share. Later that week there was a further surge with the share price reaching 575 pence. Thomson Holidays had been the main sufferers in the economic downturn. More than half a million holidays had been axed by the company.
The press speculation rumbled on, with Dan-Air refusing to disclose which companies they were in talks with. Late in May another leak revealed that British Midland had been in talks with Davies And Newman. when asked for a response, British Midland admitted they had been in talks, but stressed that they were 'inconclusive at the present time'. The press were unclear about why British Midland were in talks with Dan-Air, which, it said, was foundering because of the collapse in the package holiday market. Captain Alan Selby told us:
'Well they would say that wouldn't they? Dan-Air was a much larger airline than BMA. While the press were going on about them not being able to expand at Heathrow, they neglected to say that we had some very good routes out of Manchester, Newcastle and Gatwick. Our fleet was considerably bigger than theirs and our network dwarfed theirs. We carried six million passengers that year, two million of them on largely profitable scheduled routes. That was double those on BMA. So, from my point of view it was obvious why they wanted us. If we had been making any mistakes in the late 1980s I believe that it was because we were diversifying into too many areas, we were also in the habit of keeping unprofitable routes going for far too long. Instead of just axing them. We did have profitable parts of the business, the engineering was profitable for most of its existence and so was Gatwick Handling until this year. I also believe that a lot of the charter stuff should have been thrown out. It's perfectly acceptable to have a modern, efficient airliner flying good business, but I, and many others knew that operating the 727 came at a heavy price. I don't think they were making any money at all, and if they were not - then get rid of the jets and either replace them or operate the profitable ones only - using the most modern aircraft. I can't say for sure, but I believe that there might have been a bit of egomania in play. I think Dan-Air enjoyed being known as the second largest airline in the UK. But the bottom line was that anyone can have a shop selling ten pence apples at nine pence each. You can't do it for very long though. The charter scene had so much over capacity with new airlines springing up all over the place. It was harder to get the contracts, you had to match all the new carriers' rates, and if you are doing that with a 727 and your competitor is using a 757, and you are using so much more resources on the same route - you will lose money.'
Gatwick Handling had felt the pinch of the downturn in holiday traffic. They announced that they would be making 30 people redundant. The job losses would mainly be at middle management level. There would be fewer temporary jobs available for 1990 too. Most of those affected would be redeployed within the company and given a reduction in salary, although there would be job losses. A Gatwick Handling spokesman said that they believed the company would weather the storm, but they were aware that there had been a depression in the industry.
The press was full of stories in late May about how Dan-Air was about to be taken over by Air Europe, American Airlines or Lufthansa. Dan-Air were anxious to re-assure holiday-makers and the travelling public that it was 'business as usual'. Telling journalists that any talks they were involved in 'would in no-way jeopardise any contractual arrangements we have with any of our customers. We are a controlled company, in other words we have various family trusts and directors, who together, hold a majority shareholding in excess of 60%, so we are in control of our destiny.' It was rumoured that the airline was up for sale at £45 million. One of the senior management team told us, on condition of anonymity:
'Obviously, I was not involved in the actual discussions, but I was involved from the sidelines. The whole industry was in a pretty desperate state. The International Leisure Group and their airline, Air Europe, in public at least, did a good job of appearing to be able to withstand the economic forces that was exceptionally hostile to our business. During the year there had been war in the Gulf, involving two oil producing nations. This was bound to have an effect on fuel prices. It would also mean that travellers were anxious about flying in general. It didn't matter that the Gulf was a long way away, it did unsettle the travelling public. It is never good with a backdrop like that to have constant speculation that your company is about to be swallowed up. I can assure you that we were not, as it were, on the phone calling every airline in town and saying 'Will you buy us please?' Airlines do work together more than you would imagine and believe it or not, contacts are maintained. In this sort of scenario, there are discussions with banks, that are ongoing through the year. Several airlines may use the same banks. There are all sorts of formal and semi formal dialogues between these institutions. It was not as if we couldn't pay the electricity bills. Things at this time went on as usual. You cannot be perceived as cutting corners with standards as that leaves you open to other sets of accusations. The board were not sat there with their heads in their hands night and day. There was the business of running an airline and that is what we did. You never knew - maybe a huge contract was just around the corner and if it was, then you had to be seen to be professional and ready to meet the challenges. Some of the changes that were about to come, I was enthusiastic about - some not so much. Some of the things that new people did, I thought were the right call - and some were, frankly terrible decisions.'
A vital radio link broke down at Manchester on May 24th as a packed Boeing 727 was racing down the runway. The aircraft was about to take off when an indicator in the flight deck alerted Captain Charles Nash that there was a fire in the jet's engines. The highly experienced pilot brought the aircraft with 187 passengers on board to a screeching halt on the runway, whilst at the same time issuing a 'Mayday' call to the tower. The aircraft stopped on the runway and Captain Nash was heard on radio saying 'I thought you had learned the lessons from the 1985 disaster.'
Captain Nash did not know if there was a fire because the engines are at the back of the aircraft and he couldn't see them. Manchester Airport Operations said that the CAA had been asked to launch an investigation and that to comment would prejudice the inquiry. The tower stated that they could not see flames, only smoke and that fire services were on their way. The Captain was given a radio frequency to speak to the fire teams. Communications were lost and the Captain forced to re-tune to the tower. The next day Emergency services at Newcastle were on full alert after a company BAe146 with 72 passengers aboard burst a tyre on take-off from Gatwick. After lowering the undercarriage, the aircraft flew past the control tower to assess any damage. It was confirmed that an inner starboard tyre had burst and emergency vehicles were placed in position. The Captain landed the aircraft without incident.
On May 25th, an elderly woman was hurt when she fell from the wing of a stationary BAC 1-11 charter flight from Ibiza to East Midlands. The woman, aged 70, and an elderly man did not follow cabin crew instructions to leave the aircraft from the front exit door after a stewardess spotted smoke from coming from a rear engine. the elderly couple instead opened an over wing emergency exit and clamoured onto the wing before she slipped and fell several feet onto the tarmac. The woman suffered a leg injury and was treated by a nurse at East Midland Airport. Afterwards she was admitted to hospital at Chesterfield, where it was disclosed she had broken her ankle. The couple were among 70 passengers on the flight from Ibiza which had landed at 1 pm. The aircraft had come to a halt and passengers had begun to de-plane via both exits when a stewardess noticed smoke coming from the engine. The stewardess closed the door and instructed passengers to use the front door instead. The Captain had alerted fire crews who arrived after the last of the passengers had disembarked. In the change of exit, cabin crew had not noticed the elderly couple take matters into their own hands. A Dan-Air spokesman said:
'Passengers were told to leave the aircraft by the front exit. Those about to leave by the back door were told to turn around, it was all very orderly. But it appears that this couple wanted to get out rather more hastily and used an exit over the wing. We regret that she was injured, but it is important that passengers always follow any instructions given to them by cabin crew. This was not an emergency evacuation. There was no intention to do anything other than orderly de-plane. There was no fire. We checked the engine and there was no fault. We believe it was just a case of some oil dropping onto the hot engine cowelling which caused some smoking. The wind must have been blowing in the wrong direction and took the smoke into the rear of the aircraft. So our crew very properly made the right decision in closing the door and instructing passengers to use the front door.'
Newspapers carried reports on May 26th that Dan-Air looked 'certain to be taken over by Lufthansa' A claim that was dismissed by Dan-Air with a spokesman saying: 'I don't know how many times we have to repeat this, but it is business as usual. There have been talks with other airlines about forming closer ties, this does not mean a take-over. We can't have a situation where every day the press announce another new airline is being lined up to take us over. Passengers have absolutely nothing to worry about.' British Midland Airways' Chairman Michael Bishop declined to comment on the rumours claiming they were about to make a take-over bid for Dan-Air on May 30th. analysts were now saying that Dan-Air had a value of £30 million. British Midland had recently seen Scandinavian Airlines becoming a minority share holder.
Talking about Scandinavia....
An baffled elderly couple arrived back in Britain on June 1st after jetting off for a holiday in Norway and landing in Greece. Retired pit official John Matthews aged 83 and his wife Jane aged 82 were looking forward to their usual holiday in Oslo. But while their baggage was loaded onto the Oslo bound aircraft, the couple were ushered onto a flight heading to Lesbos, and five hours later, instead of gazing at the snow-capped mountains, the couple found themselves in a Greek hot-spot. Mr. Matthews of Sheffield said: 'We saw two Dan-Air aircraft side-by-side and got on the first one. The clanger came to light only after the Greek flight took off. Cabin crew on the Oslo flight were puzzled as to why they only had 29 passengers on the aircraft instead of the 31 who had checked-in. The puzzled Captain of the Greek bound jet radioed to say he had two extra passengers on board, but by then it was too late to return. The couple stayed in a hotel in Lesbos as guests of Dan-Air before flying back to Manchester. After another night at the airport hotel they flew onto Oslo. Said Mr. Matthews 'We're not annoyed, because everyone has been so nice to us. Greece looked so nice, we're thinking of going there again later in the year.'
*Editor's note. Having checked through the archive we can see a major problem. Who was to blame - we don't know. But, here are the facts. DA 4118 to Mitilini at Lesbos was a Boeing 727 charter flight, timed to leave at 1035. DA 842 was a scheduled BAe 146 carrying a departure time of 1055. It was more likely that the Boeing 727 would be carrying a slight delay as there would be more passengers boarding. The scheduled 146 to Oslo only had 31 passengers checked in, and airlines made an effort to ensure scheduled flights departed on time. Manchester Airport's Pier B made no distinction between charter and scheduled flights. Pier A was used for domestic flights and Pier C traditionally for intercontinetal services. What is odd is that all of the gates on each pier had a separate desk where passports and boarding cards were inspected. The couple almost certainly would have used the correct gate for their flight and be cleared to proceed DOWNSTAIRS to the actual gate. In 1990 passengers then walked the short distance from the gate to their aircraft - which would be parked nose in at the relevant gate. It is a fair assumption that once the couple went through the door, they would have seen several aircraft all parked in a similar way. I don't have the gate numbers but if their aircraft was parked directly in front of them, they might not have seen the airline titles. Looking left or right - they could identify a Dan-Air aircraft. It is fair to say that there would be a train of people boarding the Boeing 727, and the couple were likely to have followed them.
Inspirations East - a small Tour Operator chose to charter Dan-Air Boeing 737 400 series jets for a series of holiday flights from Gatwick to Goa in India. The flights would operate in 170 seat configuration and would be the first charter flights to India that Dan-Air had undertaken. There would be a refuelling stop at Sharjah in the United Arab Emirates, a free bar and in flight catering. For an additional £95 passengers would enjoy extra leg-room seats and upgraded catering. The Sunday evening flights would operate from October through to March 1991.
Harry Goodman gave an interview to TV which was displayed a lot of his ambition.
'When we started as a small Tour Operator we soon realised we needed an airline, all the airline charter companies were owned by our rivals. So that was a necessity, after that, it became a fun business, it's very fun, very profitable. We like to win. We don't take great risks with the company, we take calculated risks, we like to be winners. You know it's fun to take on your rivals, and Governments and bureaucracies, and it's even more fun when you're winning.'
But winning hadn't come easy, Air Europe had started out as a charter company, carrying passengers for other Tour Operators and its sister company, Intasun. Not all of the charter airlines were owned by rival Tour Operators - Dan-Air for instance. It was only five years prior to this interview that Air Europe had entered scheduled services, challenging the larger airlines head to head. Goodman continued;
'What you have got is a series of not likeable, fat cat European scheduled airlines. They have never had to face competition, their costs are sky high, and in a competitive environment they are finding it difficult. Now the only way that they can compete is by blocking facilities. Refusing to accept our tickets, refusing to inter-line, refusing to enable us to use facilities at airports, but we're cracking all of those.'
He claimed that the strategy was simple, that Air Europe were using brand new aeroplanes and offering an excellent on-board service for a much lower price. Goodman said that established airlines fought tooth and nail to block the new upstart and Air Europe found themselves handicapped at every turn. Including denying them access to the European computer reservation system. Charles Powell, Air Europe's Scheduled Services Director said:
'We still have an outstanding issue with Alitalia who have been editing data that we want to put into those reservations systems. They refuse to show our fares for example. They pretend that we charged the same fares as Alitalia, all that kind of nonsense. All of that can be very damaging and it has the effect of reducing the consumer's choice in what is, otherwise, a developing market.'
Most airlines airlines had traditionally expanded cautiously, but Air Europe had a different approach. In 1989 they began to form partnerships with smaller airlines all over the continent, establishing a pan European network of scheduled routes, calling the concept 'Airlines of Europe'. This bold step saw the entire European airline industry watching their every move, but Air Europe were absolutely convinced that the next decade would be theirs for the taking, with Rod Lynch, Air Europe's Managing Director going on to say;
'The biggest barriers are the barriers in people's minds, about those people who see France as a totally foreign country, as opposed to somewhere that is around one hours flying time away. I think this country, which is very insular, is going to go through something of a revolution. The sheer access into Europe, and vice versa, is going to generate masses of traffic, and I fully intend that we are going to take advantage of those.'
But as the market changes, so do the airlines. The next few years would see partnerships from some of the largest airlines in the world, with huge resources. Was Air Europe not worried that they might simply squeeze them to death Goodman said;
'Well they will try, but one thing is for sure, you don't gain anything by putting a series of inefficient companies together. You know, if you look at our costs compared to Air France, Lufthansa, Iberia even British Airways, our costs are 40% less. To get low fares, you have to have low costs, and all the cosmetics of putting all the monolithic giants together without addressing the basic problem of getting the cost base down will do them absolutely no good whatsoever. We compete every day of the week. If you look at how scheduled airlines have grown up, they have grown for instance, between British Airways and Air France with an agreed affair between London and Paris. There was no competition, the fare was agreed at which was the least efficient of those two carriers, so you didn't have to worry about costs, you know, if Air France had a strike and the unions wanted 30%, it was like 'no problem give them 30%' because who pays? You and I, the poor old passenger. But now that's gone out of the window, so they've gotta look at costs. But they've got a cost structure that's built up over twenty years as a monopoly. Very difficult to get rid of.'
Air Europe had made their mark at Gatwick. They were the second largest airline at the airport, behind Dan-Air, both were ahead of British Airways. In 1989 Air Europe had carried more than three and a half million passengers. Their business class and executive lounge, 'Premier Class' had been a hit with business commuters. Rod Lynch said;
'The airline business is absolutely infectious, once you've been bitten, it's completely incurable, I couldn't consider working anywhere else personally. I don't know any of my co-directors who would give tuppence to work in any other industry. Once you are in aviation it tends to stick permanently.'
Harry Goodman closed by saying;
'If you're asking me do I like flying? No, I hate flying, but that's a personal thing, I just hate getting on aeroplanes, on saying that, I do 200,000 miles a year, so I have to. But it's certainly not in my blood, you know, I don't fall in love with an aeroplane sitting there on the tarmac. I like to be successful, I like to take on challenges, I like to win, and here you see an opportunity, which is very rare a man gets. I was told at first, you will never get a scheduled service licence, and if I did I would't get the landing slots, and if you did, you would never get lower fares - we got all three. We run at satisfactory load slots, and if I look at our major competitors, they are more frightened of us than I am of them.'
Sir Colin Marshall Chief Executive of British Airways said in response to Goodman;
'Well I think he will have another thought in due course. I saw him on the video, and there was, of course, a sprinkling of disinformation and half truths. It's hard to conceive that Harry's costs would be 40% lower than those of British Airways, after all, we buy our aircraft at the best possible prices on a high volume basis, we borrow money at a fine interest rate. We pay our pilots and engineers at a proper rate and I very much doubt that Harry is paying his pilots and engineers at 40% less than British Airways. I doubt that his insurance is less, and I know that his air traffic control and landing charges certainly won't be less than ours, so I think that Harry and we are going to be very strong competitors for the future, and that's a good thing.'
Marshall denied that there was any attempt by British Airways to squeeze smaller airlines out of business by pointing out that Air Europe had more slots at Gatwick than British Airways and their charter carrier Caledonian combined. He neglected to say that Air Europe had no slots at Heathrow.
Further leaks to the press on June 2nd revealed that there had been ongoing talks with Dan-Air and British Midland Airways. Expert opinion had previously claimed Dan-Air had a value of £30 million and were now placing a £45 million price tag on the airline's value. Both airlines refused to comment as to whether a take-over was imminent, but British Midland's Robert Nadin confirmed 'We have been in initial negotiations.' A Dan-Air spokesman said 'Quite a number of airlines have contacted us, but we cannot confirm if British Midland is one of them.'
The previous month Davies and Newman confirmed that talks were taking place and that one of them could lead to a sale of the airline. Chairman Fred Newman said that talks were part of an ongoing process as part of a possible link between Dan-Air and another airline or airlines. the press speculated that further details could emerge at a Dan-Air shareholders meeting on June 6th.
The day after the meeting it was disclosed that 'We are planning ahead for the Winter, for 1991 and beyond - This process has not been helped with speculation from the press. The Board are concerned that it could undermine confidence in the company. It has therefore advised staff that we are taking all the necessary steps to strengthen Dan-Air and that they should inform passengers, customers and suppliers that it is business as usual. We would therefore advise, strongly to repeat this today and urges staff, shareholders, employees customers and suppliers to await authoritative statements from the company. We issued a statement to shareholders in May that we were informing them of possible greater co-operation between us an other airlines was being considered. I can only confirm that active discussions are on-going with a number of interested parties with the objective of creating a stronger airline - we will of course always advise shareholders of any major developments.'
In June, a Tour Operator conference spoke about how 1991 would see fewer holidays available. Prices would be fixed through a background of heavy losses, reduced demand a fewer aircraft. A total of 25 aircraft had been lost following the collapse of British Island Airways, Paramount Airways and the closure of Novair.
Air investigators began a probe on June 22nd into an air-miss involving a Dan-Air BAC 1-11 and a British Airways Boeing 747 over Sussex. A Dan-Air spokesman said 'Both aircraft were under the control of London Air Traffic Control and our pilot had been instructed to descend immediately to avoid collision with the British Airways aircraft.' The CAA said they had referred the matter to the Independent Join Air-miss Group.
On June 24th another air miss was reported over Wales. The incident involved a company Boeing 727 with 170 passengers on board flying from Ibiza to Manchester and a Dublin bound British Midland Boeing 737 from Heathrow. The two aircraft narrowly avoided disaster at 28,000 feet over mid-Wales. The Dan-Air 727 DA 2375, took a dramatic dive to avoid a catastrophe. The two Captains prepared reports which would prove vital for the investigation. The CAA said radar tapes would be studied to help find a solution. The two incidents came only days after a new computerised system had been installed to help cope with the increased Transatlantic flights. One of the major corridors was north of Swansea where up to 250 flights a day passed. British Midland Airways demanded to know why the two jets had been allowed to occupy the same airspace. The two aircraft should have been horizontally separated by at least 1000 feet, but were both at 28,000 feet. Dan-Air said: 'We were both in radar controlled airspace, so somebody will have to explain why they put us on the same level. Our pilot had been ordered to descend to avoid hitting the British Midland jet.' The CAA defended their operation saying: 'Our computerised system is not to blame. It is Captains, on the advise of controllers that control aircraft, not computers.'
The next day, the CAA confirmed that two air traffic controllers had been suspended until a written report had been compiled, saying: 'This is standard procedure, in no-way does in apportion any blame.' The Dan-Air pilot, Captain Simon Spence had reacted immediately, A Dan-Air spokesman said, 'It was pretty hair-raising. The 'planes were less than half a mile apart and were flying at 500 mph. after he received an emergency warning, he pushed his control column forward to dive under the British Midland Airways aircraft, by the time he did this he was in visual contact with the other aircraft. There were no injuries, but the dive was rapid enough for the pilot then to inform passengers what had happened.'
An alcoholic publican, terrified of flying, refused to fasten his seat belt unless he was served a drink with his meal, a court was told on June 26th. Anthony Munden, a Landlord from Bristol was allegedly already drunk when he boarded the aircraft Crawley Magistrates were told. Elaine McGloin, prosecuting said: 'On the flight from Faro in Portugal to London Gatwick, Mr. Munden fell asleep before take-off. He was woken up by an air stewardess who served him his meal. He then demanded a drink with his meal, but was refused. He continued to demand one, and when asked to fasten his seat-belt for landing, he refused to do so unless he was given a drink. He was given the Captain's orders to belt-up but he still refused and the 'plane eventually landed with him insecure.'
Keith Goatcher, defending, said that Munden was afraid of flying and had purposely got drunk to face the journey back home. 'He has a drink problem and had been to Portugal to try and straighten things out. He has a fear of flying and was relying on tablets to get him through the journey. He managed to stay off drink for the first ten days of the holiday before he was mugged and lost his tablets. He spent the rest of the holiday terrified of the flight back home and stayed up drinking late, in the hope that he would sleep through the flight. He accepts that it was a stupid act on his part, and now accepts that he has a drinking problem, and is attending Alcoholics Anonymous.' Magistrates fined Munden £500 and ordered him to pay £35 costs. He pleaded guilty to failing to obey the lawful order of the commander of the aircraft.
The airline said they would 'look again' at their decision to scrap the mid-morning flight from Inverness to Gatwick from October. Company Chairman Fred Newman promised to 'carefully reconsider' the move after pressure from Inverness M.P. Sir. Russell Johnston. The 1105 flight is one of only five daily air-links to London and is used mainly by businessmen from the north. Sir Russell said losing the flight could potentially cause damage to businesses and tourist prospects. Sir Russell said he very much welcomed the 'constructive approach' of Mr. Newman.
A furious row between a man and his wife sparked a mid-air alert on July 3rd. The couple started feuding shortly after take-off and five miles in the air, senior stewardess Annie Ball tried in vain to calm the couple down. But their noisy bickering carried on over Spain, France and across the English Channel. Passengers complained that the arguing was louder than the engines. As fellow travellers watched on anxiously the Captain, Graham Harradine vainly appealed for a truce. Then Captain Harradine radioed ahead asking for police to deal with the matter after landing the BAC 1-11 at Manchester. But just before touch-down the insults suddenly stopped flying. The row was over and the two police officers who went on board the aircraft to speak to the couple took no further action. The Airport Police Liaison Officer Ken Bettanay said: 'Holidays can be a testing time for couples.'
The incident was reported as a 'domestic situation on board'. The plane, from Alicante had 119 other passengers on board, including two infants.An airline spokesman said: 'In cases like this, the normal procedure is for the senior stewardess to try and calm things down, and if that fails the pilot is normally asked to talk to the passengers concerned.'
On July 11th an investigation was launched after a man travelling to Athens from Manchester Airport boarded a Dan-Air flight destined for the Canary Islands. It was the third time that a Manchester passenger had ended up on the wrong plane at the airport in six weeks. The man was put up in a hotel and boarded a scheduled services flight to Tenerife the next day, all at the airline's expense. The man had been flown back to Manchester on the return flight of the one he had boarded, he then had a night at the airport hotel and flew to Tenerife the next morning. Britannia Airways had a similar mishap when a passenger boarded a Boeing 767 which was parked next to a Britannia 737. Monarch Airlines had an extra passenger to Turkey who should have been travelling to Ibiza, British Airways had a Milan passenger end up in Dublin and perhaps the worst example was when an Arab business man who should have boarded a KLM flight to Amsterdam, ended up on an Air Malta flight to the island. Dan-Air said: 'It appears there has been a mix up on two occasions when gate staff have not supervised boarding adequately. But our cabin crew are instructed to check all boarding passes, as well as more than one crew member carrying out a head count before push-back. We will be fully investigating this matter.' Meanwhile, airport official at Ringway said: 'The problem of passengers getting on the wrong aircraft unfortunately does happen from time to time.'
Gatwick Airport upheld a ban on extra late night flights which had been imposed in 1988, following complaints by local residents and local environmental groups. The Government ruled out additional flights for the foreseeable future. But the decision was condemned by airlines who used quieter aircraft types, who's noise levels, they said, were well below maximum noise thresholds. The restrictions had been imposed by the Department of Transport with a promise to review the situation after two years. Minister Patrick McLoughlan said that noise levels in the area had been greatly reduced since the introduction of the restrictions, and that the latest category of quiet aircraft show that the overall night noise climate can be improved. But he still refused to lift the restrictions and ordered a two year research programme into how people's sleep was affected by aircraft noise at Heathrow, Gatwick and Stansted. Representatives from the three Airports would sit on the committee. Gatwick Airport Consultative Committee agreed that it was not the right time to review the night quotas. The members suggestion of a survey of local residents be carried out was taken up by the Minister. McLoughlan said that an integrated noise and track system would be in place at Gatwick by 1992. As older, noisier aircraft are phased out, to make way for newer, quieter models, the amount of disturbance from aircraft noise should be reduced he said. But Air Europe acted angrily at the decision, saying: 'At Air Europe we feel that those airlines like Dan-Air who operate noisy old aeroplanes should be penalised rather than companies like ours who have invested in new, quieter aircraft.'
A Dan-Air spokesman said: 'We are disappointed at the news, but not dismayed. We are buying quieter aircraft.'
A substantial portion of an unused hanger at Manchester was taken over by Dan-Air in July for their servicing and inspection crew. Local electricity firm Norweb had installed new state-of-the-art quartz ray heaters for what was the largest heated area of its kind in the UK. The installation,although costly vastly improved the electricity efficiency in the company with 50% of capital costs recouped within 15 months.
Above: The Quartz Ray Heaters at Manchester
A leading Labour Party MP slammed security at Gatwick for allegedly impersonating him and stealing his luggage. Tony Banks told the House of Commons that he had been separated from his luggage at Paris Charles De Gaulle Airport. Dan-Air told him that they would forward his luggage directly to the Palace of Westminster after he was forced to take the train. But the luggage never arrived. Instead he found that and impostor had intercepted it and collected it from Gatwick without his permission. The furious MP said: 'They've got no idea who this person is. Whether they signed for it, or what kind of authorisation they used. What kind of a system is this? If someone can just go up to them at Gatwick and apparently satisfy the authorities that they are an MP and walk off with his luggage. That demonstrates that there is something wrong with security.' Dan-Air and their agents Gatwick Handling denied there was a security breach, but promised a full investigation.
There would be an increase in the number of flights between Aberdeen to Manchester and Gatwick, and an upgrade in the number of seats on the Inverness-Heathrow service. From Autumn this year there would be four daily return flights from Aberdeen, increasing the frequency to 24 return flights a week. There would be an additional each way daily flight to Manchester. There would be 600 extra seats a week on the Inverness service when the 104 seat BAC 1-11 500 would be introduced on all flights. Replacing the 79 seat 400 series which had operated on some of the flights. Flights from Inverness via Aberdeen and Manchester would be suspended during the expected quieter months of the winter. Dan-Air had issued a statement: 'The Inverness Member of Parliament Sir Russell Johnston had asked us to look again at the services, and we have. At present, only 7% of our Inverness passengers have opted for Gatwick. It was felt that the service could not go into profit if we took into account the very high landing and parking charges at Inverness. There isn't enough business to justify the service without landing at Aberdeen and Manchester, and the figures there are not high enough to sustain the service through the winter months. We will look once more at the service in the spring.'
But Inverness Airport bosses disagreed. Hugh Lawson denied that the airport fees played any part in the shutdown. 'Fees at Inverness are substantially lower than at Aberdeen or Gatwick.'
A near-miss involving a Dan-Air BAC 1-11 and a NATO F111 over Inverness in November 1989 had been kept hidden from the public a Scottish newspaper revealed. The bomber was carrying out a 'mock bombing attack' over Inverness Airport. The incident caused so much concern that the US Air Force was now questioning whether these tests should be carried out over civilian airports. Several F111 pilots had refused to carry out the practice that day, but the leading F111, travelling at 417 mph, and whose 'target' was on the periphery of the airfield, passed the Dan-Air BAC 1-11 on final approach, at a speed of just 108 mph, just yards apart. The Dan-Air pilot complained on the radio, saying: 'Not impressed with that fighter.' That jet went right over the top of us as we were just rounding out there. Are they supposed to do that sort of thing?' The controller replied in the negative. The pilot was of the intention that the move was carried out intentionally so as to give a close miss. This was backed up by the controller who thought the pilot of the F111 had 'aimed straight at him'. The pilot estimated that the F111 had come within 250 feet, but the controller said the distance was just 33 feet. The investigation by the Civil Aviation Authority air-miss working group said the discrepancy was 'hard to explain'. The report went on to claim that if the BAC 1-11 had been later in landing because of any hold-up the outcome could well have been very serious. Although the report had great sympathy with the controller, it say the final clearance given to the F111 to approach the airport, given that they were just two minutes away, put them into conflict with the Dan-Air flight. The controller had apparently thought the BAC 1-11 would be on the ground by the time the US war planes arrived. The report recommended that 'the undesirability of practice attacks in UK civilian airfields without proper clearance should be brought to the attention of NATO Taceval (Tactical Evaluation)' But it also notes that US Air Force opinion that 'the use of civilian airfields for practice aircraft should be discontinued.' The Captain noted that: 'It is not for us to say whether these flights should be carried out within civilian airspace or at civilian airfields, but they should never be carried out without the express knowledge and consent of pilot of the civilian aircraft. We in the flight-deck had absolutely no warning. We were unaware that such practice flights were being carried out in the area. We were not told anything at all during our approach. As far as we were concerned, we were on a standard approach, which requires a great deal of concentration at such a critical time. To look up and see a military jet heading directly towards us was terrifying. Our passengers had no knowledge of this and had certainly not agreed to take part in such tests. Who would have been to blame if we in the flight deck had reacted differently and made a catastrophic error? Members of the public who are ordinary fare-paying passengers should never be exposed to this sort of testing. Thank goodness we in the flight-deck were the only ones who saw what happened.'
A report issued several weeks later decided against stopping practice sorties at civilian airports but agreed that none would take place without the written consent of an airport manager. Sir Russell Johnston, the local M.P said he thought the report to be unsatisfactory. He said as far as he was aware these sort of missions were only to be carried out if six weeks notice had been given. He also called for the NATO pilots to face disciplinary proceedings.
A bereaved man told of his disgust at a major airline for losing the body of his 21-year-old brother, who had been killed in a checkpoint accident in Ulster. The family of Scots Guardsman Paul Brown went to Inverness Airport, Dalcross, on Saturday August 4th to receive his body off a Dan-Air flight. But they learned the coffin had been lost because of a blunder by cargo handlers. Paul’s brother, Allan, said: 'We just couldn’t believe it was happening. One of the Dan Air staff at the airport told us that he didn’t have a clue where Paul was, but that he would phone round a few place to see what he could find out. It was horrible. They seemed to be treating it as just another piece of lost luggage, not the body of a 21-year-old soldier.' After making inquiries, Dan-Air told the family the body was still in Ireland. But when the Browns contacted the Army for more information, they were told the coffin had definitely been put on a Dan-Air flight and they had the documentation to prove it. After a tense hour of waiting, the family learned Paul’s body had been found stranded at Gatwick Airport. Allan said Dan-Air told them the body would have to stay there until arrangements could be made to fly him to Inverness on Monday. 'My Father was furious - disgusted at the idea that his son would have to lie alone in a cargo hold for two days.' He said. But Dan-Air decided that they would fly the body to Glasgow that day and transfer the coffin by hearse to Inverness. Allan said: 'As a mark of respect, and to make sure no more blunders took place, Paul's Uncle, who lives in Glasgow, met the plane and carried the coffin off themselves. The airline's handling of this was totally insensitive, they just didn't seem to care.'
Dan-Air were the recipient of the Tea Council's 'Best Airline Tea' in the world on August 15th. They were chosen with a combination of presentation and leaf blend. The council flew 300,000 miles over 504 hours sampling the tea of airlines all around the world. Eventually a short list of thirty airlines were chosen, this was narrowed down to Austrian Airlines, British Airways, American Airlines and Dan-Air. Two professional tea tasters then selected the winner. Dan-Air said 'Of course we are delighted to have won this award and that our passengers can enjoy the brew, from the judges point of view, Dan-Air is obviously their cup of tea.'
the winning brew had been served on the Inverness-Heathrow service but Dan-Air were keeping the blend a secret, but it was believed to be a blend of Indian tea. The judges also felt that Dan-Air crew serving the tea with milk from a jug was also a factor int he taste, with the Dan-Air spokesman saying: 'I think they were impressed that we serve milk that way, not from a carton or a plastic jug and certainly not the little packs of UHT milk. Perhaps it was also the tasty Highland water.' Inverness base stewardess Mo Perera had served the winning brew, and she, along with senior stewardess Emma Sheffield joined Dan-Air's catering manager Michael Whiffin and cabin staff manager David Hughes attended the ceremony at London.
One of the tasters, Jenny Wright who had travelled 80,000 miles tasting tea was also impressed with the enthusiasm of the Dan-Air cabin crews. She said 'Tea is undoubtedly my favourite drink, and whilst I am no expert, I know what I like.' The tasters had looked at hygiene, cabin service and crockery as well water and the actual tea, and Dan-Air had out-brewed the rest by miles.
Press speculation continued to surround the airline, with one newspaper claiming Dan-Air was 'struggling and troubled'. As Gatwick Airport celebrated its 60th year, Dan-Air announced a series of charter flights to Goa in India. Fred Newman, the airline's Chairman blamed last year's poor figures on a general slump in the UK charter holiday market. A spokesman said 'The Chairman is determined that the Dan-Air name should continue, and so we are still talking with various groups to find ways of injecting cash into the airline.' The newspaper said Our decision to expand outside of Europe was their response to the demand for new and exotic destinations. They claimed Dan-Air's last long-haul flights had been twelve years prior to the India flights. An airline spokesman said 'Our Boeing 737 400 series aircraft will make the trip on what will hopefully be the first of many long-haul destinations.'
One of our contributors told us:
'Utter crap to be honest. I have a good idea where all the briefing came from, but some of the people I would accuse are still around, so it would be unwise to mention them. We were told to be as cost effective as we could be. But that was the case when we were profitable. On a day to day basis nothing changed. It's not the same as your normal bank account with wages coming in. There's operating losses at the end of the financial year, but it's not like there was an empty bank account with nothing going into it. We had to release our accounts every year because we were a public limited company. Some other firms were not PLC's but still released their figures when they didn't have to, and some did not. In the case of Air Europe and ILG - no one knew what their situation was. But people within their organisation must have known. Certainly their banks should have been aware. Lloyds were bankers to Air Europe and ourselves. They were also the bank for British Island Airways who had gone bust early in 1990. I don't imagine that they wanted to get their fingers burned again. From a purely public relations point of view Air Europe were excellent. They were boastful about their product, which is fine, but they did tend to put the shoe into other companies. Both in print and in operating services between the same airports as other airlines. I raised my own eyebrows at their high-risk activities.'
Whilst the public were being fed pieces of information via the press. What wasn't known at the time that Davies and Newman's bankers - Lloyds had naturally been concerned about the company's losses. Their teams and Davies and Newman had been having regular meetings. At this time David Jones was introduced to the airline's board and invited to contribute with any possible solutions. David James, as yet, was a totally unknown entity. He was highly regarded in the business world, being referred to as 'The Company Doctor'. His skill set was sought by Lloyds in several instances. Most recently he had been heavily involved with the rescue of The Eagle Trust, a Birmingham based holding company that had recently sold two builders merchants for over £2 million. Their Chairman John Ferriday had fled the UK in January when the company called the police after discovering £13 million had disappeared from the firm. Eagle Trust had been liquidated in May 1989 with debts of more than £2 million. Eagle Trust boss, John Ferriday had previously been the Chairman of now bankrupt Bristol airline Paramount Airways. Eagle Trust's new Chairman, David James, then sold the firm's Staffordshire electrical wholesaler for £2 million, which gave Eagle Trust a net gain which would go towards settling Eagle Trust massive £30 million loss. Eagle Trust went on to sue their stockbroker for £13.5 million following the stockbroker's underwriting of a £51 million offer to purchase a film equipment company. Under James, Eagle Trust, who had losses of £61 million, issued writs to seven companies. Eagle Trust itself was being investigated by the serious fraud squad. Which led to James being employed to find a solution. James said that Eagle Trust had made a profit of £9.6 million in 1988 but had lost £56.5 million, mainly on an express parcels business and the Lorenzo car project. The 1988 results had been delayed until March 1990. the mini conglomerate had now sold subsidiary company Turton Safety, netting half a million. In April, James found that dividends amounting to £246,000 payable to Eagle Trust from its investment in the tour operator Owners Abroad could also not be traced.
There was then an investigation after parts of the world's biggest gun were seized by customs officials. Documents, drawings and specifications were also seized from Halesowen firm Walter Somers and its sister company Mitchell Somers, which were now under the umbrella of Eagle Trust. Ferriday denied any involvement in weapon shells. The £1.6 million device was later claimed to be for petrochemical use. Meanwhile, Notts County boss Derek Parvis wanted to buy back his Parvis Group Company for £13.5 million. Eagle Trust had purchased Parvis three years prior. Mr. Peter Ryan was appointed to the Eagle Trust Board along with Mr. Charles Whyte. - All three would later join Davies and Newman.
Ferriday's wife was arrested in June, and John Ferriday flew back into the UK after being missing for ten months. He was questioned regarding the missing £13.5 million. Paramount Airways had gone bust with debts of £11 million. The former airline boss Roger Powderhill issued a writ for £9 million to Ferriday and others. By the end of June Ferriday and Eagle Trust's former Managing Director Richard Smith had been charged. In August David James revealed a £10 million 'Sale Of The Century' selling subsidiary companies to pay off their debts. In 1989 James had turned the company around and posted a £5.5 million profit, but this was wiped out with interest payments to a loss of £7.5 million. James said that 'the core business will now revolve around the Samuelson Film & TV business.' Their unfortunate shareholders shares were presently 'worthless'. They would recover some of their investment from a stake in the new company. Eagle Trust's bankers would swap their £15 million debts for a share of the new company. Eagle Trust would continue with the writs, claiming up to £70 million. James said 'Anyone being pursued by us had better beware. We have the resources and the stamina to see it through.' James said that despite exhaustive searches, £12 million had still not been accounted for. In September James criticised new laws which prohibited banks from taking an active role in the management of companies they had given huge loans to. He asked the Stock Exchange to remove Eagle Trust from their lists. In October Eagle Trust was sold for £3.2 million.
The decision was made at Dan-Air to have a root and branch review of the airline. A full review would be undertaken to find where the company had weaknesses. The review would be carried out discreetly without any notice given to the press. One manager told us that the constant leaking to the press was frustrating as it had a negative effect with public confidence in the airline. Air Europe, as it turned out, were in a far weaker position, and yet any trouble they were experiencing had happened away from any press glare.
On August 24th Davies And Newman share price suddenly fell from 175 pence to 150 pence a fall of 12% knocking £12 million off the value of the company. But a company spokesman said: 'Things are proceeding as normal. Absolutely nothing is happening at all - we are baffled by the speculation.'
Speculation about the airline's performance had been rife with analysts predicting that high fuel costs and the decrease in the number of package holidays being taken were to blame. Dan-Air had been rocked when the fourth largest Tour Operator in the UK, Airtours, announced they were to launch their own in-house airline - Airtours International. The new carrier would certainly have a negative effect on Dan-Air's charter sales. Airtours said that their new airline would operate 60% of their summer 1991 season and 90% of the winter programme. In previous years Airtours had chartered the equivalent of five aircraft from Dan-Air. The top four Tour Operators in the UK now all had their own airline.
A Dan-Air spokesman denied that recent talks with the CAA had been a 'crisis meeting' saying: 'It was a perfectly normal meeting that the CAA have with all airlines every year to keep them informed of their future plans.' This present share price compared with a price of 934 pence for the same time the previous year. The share price eventually recovered to 225 pence per share.
Davies and Newman Chairman Fred Newman said he believed that the fall in share price was a result of press speculation and a result of minimal trading volume. He confirmed that the company was involved in talks with a number of airlines and was in the process of conducting a review of company operations.
The process had begun with the news that the main company office was moving to Gatwick, there would be significant cash savings with the move. The review determined that five aircraft would also be sold. These would be older inefficient aircraft from the charter fleet. It was felt that there was no point in trying to find clients to charter them as many Tour Operators were heavily relying on their own in-house airline fleet. It would be time-consuming and costly finding clients, with the end result being that the flights would not generate revenue to even break even. Scheduled services came under analysis and there would be a determined effort to ditch loss making services and concentrate on routes that were already profitable. The Scottish services were highlighted as being the template for how the airline should move forward. With high density routes with a business cabin, cargo facilities and high passenger demand. Emphasis was to be placed on providing high standards of in-flight service. There was to be a greater focus on inter-linking with other airlines on long-haul flights from Manchester and Gatwick. Finally, although the engineering division was profitable. It was too large for an airline with just 51 aircraft. Third party work from other airlines was carried out at lower rates than competitors charged. Hourly rates that DAE were charging were also lower. In some cases the engineering division was working at 40% under usage. The engineering division employed 1,625 people over three plants. There was also a general feeling that the airline had an in built pride that it was reluctant to change - that of being the second largest scheduled airline, and the largest independent airline that carried the most passengers in the UK. When pressed, the airline was hesitant at abandoning charter flights and being a much smaller carrier - focusing entirely on high-yield scheduled trunk services. The airline baulked at the idea of major investment in purchasing a brand new fleet and did not warm generally to the idea of leasing the majority of such a fleet. Whilst the content of the review was kept away from the press - where the review was being carried out - did leak.
For the first time, media reports claimed that Richard Branson's Virgin Atlantic was interested in Dan-Air. This information had also been leaked to the press.
The review's implementation did see changes. Up to 150 staff would move from London to the Newman House complex in Horley to be nearer Gatwick. The recent fuel price hike would effectively add £1 per passenger, per hour on a Dan-Air flight. The poor efficiency of the BAC 1-11 2/3/400 series and the Boeing 727 had hampered profitability. The base at Stansted looked certain to close as Airtours had made it clear they wished to use their own airline. those fears were realised when Airtours announced their Stansted programme to fifteen destinations would be operated by Airtours International in 1991.
The sale of aircraft would bring in revenue and the newer, replacement aircraft would all be leased and not purchased outright. The UK economy continued to struggle and by September two more airlines had folded, Capital Airlines and Air Dundee both went bankrupt.
August 24th saw the fourth annual Dalcross Air Show. The event at Inverness was attended by 12,000 people. Bristow Helicopters were offering five minute flights in a helicopter for £10 and Dan-Air provided a HS 748 where 30 minute pleasure flights would operate, priced at just £15 for thirty minutes flying. The flights would take in the Great Glen, The Beauty Firth, Black Isle and Comarty Firth. The flights were quickly filled when British Airways added one of their HS 748 with the same number of flights, priced at £25 for the half hour. Cub Scouts in Aberdeen were given a treat from Captain John Smith and Captain Bill Hansen who offered their service for free and Shell Oil paid for fuel so the 33 Scouts could fly on a company HS 748 after they had completed a project about airports. Captain Smith said the boys had 'had a rare old time and only a few of them had their faces in paper bags.' The weather was glorious with clear blue skies, ensuring the children had the best view possible.
Isleworth Crown Court heard on September 1st that a compulsive flier had conned airlines as he flew around the world. The man was given one final chance as his sentence was deferred. Michael Saunders who was 22 already had a suspended sentence for a similar offence admitted eight counts defrauding Dan-Air and British Airways, and asked for 19 others to be taken into consideration. Prosecutor, Allan Goh, said Saunders was only happy when he is on on a 'plane, in the air. Saunders was arrested and bailed after taking a spate of flights bought using dud cheques. he then started using his Father's Barclays Connect card, running up a bill of £13,000. In September 1989 he faced the same Judge who gave him a suspended sentence and ordered him to repay airlines £6,000. Following a dramatic defence plea from defender Francis Sheridan said his client 'Must be mad.' Judge Marcus Edwards agreed to defer sentence for six months. Mr. Sheridan said his client only offended when he was under stress: 'Any man who wants to fly to America only to gt back on the 'plane to fly back again, to arrive at Heathrow and take only a minimum break, to go off again, putting himself through all that jet-lag and misery, must, putting it in lay terms, be mad.' The judge commented that he had to deal with many people living under greater stress than Saunders, but he agreed to defer sentence, on condition the defendant underwent psychiatric treatment, found a job and held it down and didn't buy an airline ticket or fly on any 'plane.
September 15th saw a company BAe 146 en route from Manchester to Gatwick come face to face with a group of hang-gliders. The aircraft had climbed to 4,500 feet over Leek when the Captain noticed several gliders. Although the gliders were well below the height of the gliders, it appeared that the aircraft had flown directly through them. A company spokesman said: 'The pilot did not have to take any evasive action as he had passed through the group. There are no air traffic regulations for hang-gliders, but it is their responsibility to ensure that the area they are flying in is safe. There would considerable turbulence to a hang glider who flew into the trails of a four engine jet aircraft. Not to mention the unthinkable if they were to be in the direct line of an aircraft travelling at more than 400 miles an hour. Leek is quite near to Manchester when one is in an aircraft. Fortunately nothing happened.
The world of aviation is never without a dull moment. Harry Goodman, flamboyant boss of Air Europe hit the headlines in September. The national press said he had 'Booked a ten day package deal of booze, kinky games, cocaine and call girls' - the paper claimed he had booked 12 girls from one of London's most notorious escort agencies, who pleaded with him to be sent home or allowed to sleep because the couldn't keep up with his bizarre fantasies. The paper claimed the three times wed multi millionaire dressed up as woman, wearing high-heeled shoes and a blonde wig. It was said he begged to be humiliated and dominated and blew £30,000. The Daily Mirror said it had evidence he had paid the escort agency £25,000. Goodman, who already had a conviction for cocaine use allegedly moved between three Central London flats with his travelling call-girl circus. Supplying him with cocaine was 55 year old Grandmother Brenda Anderson, known in the trade as Sally. Brenda worked at the 'At Your Service' agency, which specialised in well heeled clients. She swore in a statement that she arrived with the cocaine and saw Goodman dressed as a street walker, surrounded by girls. Brenda's daughter, ex-model Faye said Goodman gave her a £500 tip for a fantasy talk. Goodman was regarded as a special client and was given a special number only available to VIP clients. Brenda's encounter with Goodman, who the paper described as 'paunchy, bespectacled tycoon'. It was claimed that the marathon sex party took place over three days. The escorts were said to be wearing spike heeled boots and leather basques. It was alleged that Goodman used cocaine, hashish and booze. After the session it was claimed Goodman was confused and wore only a jumper. He took more cocaine and begged one of girls who had doused him in water. 'Please mistress, I beg you please don't do that.'- Brenda left the firm after a series of arguments.
When confronted by the Mirror, Goodman said 'This is the only answer I am going to give you and the only contact I will have with you. This is a total tissue of lies. It is a total and utter load of rubbish.' The Mirror stood by its allegations, saying that they had seen further proof, which it with-held on the grounds of taste, and that they had further corroborating evidence.
David James had been involved with Davies and Newman for several weeks, but did not have a formal role. It was revealed on September 18th that the company was planning to sell the Dan Air Engineering division in a deal that was said to be worth £25 million. Parent company Davies and Newman confirmed that they had asked Merchant Bank, Barings Brothers to contact potential buyers. The sale would include the recently opened £10 million hanger at Gatwick, the main Lasham Airfield, the Manchester base and eleven sub station engineering divisions. Dan-Air Engineering and the company had been consistently profitable. Many people could not understand the decision with one former DAE manager telling this site.
'We never saw it coming. We had just signed a huge maintenance deal with Air Europe, and we had more than 100 aircraft that we maintained, besides our own fleet. We were pretty much fully engaged at all the bases. Besides which, we had recently made a sale of extra spare parts we held and that had raised a few million. If any part of the Dan-Air group was failing to make money, it was the charters. We didn't produce our own figures for the PLC thing, we were just one of the companies within the group, but it was widely known that we were profitable. I read about how much it was going to be sold for in the press and it didn't add up to me. £25 million....When the spares we sill had were worth about £10 million. That hanger at Gatwick was surely worth more or less what it had cost -£10 million! - and we had a fully functioning base at Lasham with its own runway! We had every bit of plant you could ever need. It was a bargain in my opinion. A bit too much of a bargain.'
A Davies and Newman spokesman said of the company: 'As part of our previously announced review of corporate strategy we have decided to seek expressions of interest in all or part of Dan-Air Engineering from parties capable of providing the resources to enable to division to achieve its full growth potential. The division employs a total of 1,625 people. Dan-Air Engineering made a profit last year against a a turnover of £50 million. The division maintains our fleet of 51 aircraft and in the last year alone has serviced aircraft for more than 30 airlines. We plant to retain a 20% stake in the company which will continue to maintain our own fleet of aircraft.'
Analysts were predicting that Dan-Air would make a loss of £30 million this year, amid speculation that airlines were now reviewing their air charter links with the group. By September 18th shares fell 130 pence and stood at 205 pence per share. This bad news came at a time when it was announced that the company had carried a record number of scheduled service passengers during the first six months of the year. The total of 840,000 passengers was 14% higher than the same period in 1989, with the business cabin 'Class Elite' showing the largest growth. This success in the scheduled division contrasts with the slump in charter traffic which was hitting all sectors of the travel industry. Dan-Air had a record turnover in 1990 of £380 million but by August fuel prices had rocketed again.
Charter flights were arranged to Sweden and Finland this year, when a record 17 flights would depart from Manchester on their way to see Santa.Scheduled flights from Newcastle to Amsterdam would be extended through to Berlin from October this year. The flights would be undertaken using BAC 1-11 aircraft.
There would be work for engineers on September 18th when a company Boeing 727 with 187 passengers on board suffered a tail strike on take-off at Manchester Airport on a flight to Tenerife. The aircraft (DA 2726) returned to Manchester where passengers were put up in a hotel. Repairs were carried out at the airport and the aircraft took off for its destination 10 1/2 hours late.
Two passenger jets avoided a disaster over Hertfordshire on September 26th. a Dan-Air BAe146 jet from Gatwick to Newcastle with 74 passengers on board was forced to climb steeply to avoid a collision with a Scandinavian Airlines jet with 105 passengers. SAS said the aircraft were less far apart than the 300 metres safe minimum distance, but denied they were 90 metres apart. A Dan-Air spokesman said Captain Ted Espir was forced to take 'instinctive action' at 15,000 feet. 'He pulled back the stick sharply and went into a steep climb, passing 200-500 feet over the SAS aircraft. The CAA confirmed an air-miss has been reported and that Air Traffic Control had given avoiding instructions and the SAS passed below the BAe146.
Being a Dan-Air pilot was not all about artificial horizons, landing gear and air traffic control. Sometimes they are involved in nicer, more romantic tasks. Such as popping the question for a shy romeo. Trevor Sansome had asked the Captain of his Dan-Air Boeing 727 flight to Greece to propose to Tracey Lennon, which he did, at 29,000 feet, over the aircraft's Public Address System, everyone was delighted when she accepted. Tracey and Trevor were said to be on 'cloud nine'. The other 188 passengers gave the couple a round of applause.
A company pilot flying one of the BAC 1-11 fleet scraped the wing on the runway as he landed the jet at Inverness on October 15th. The un-named pilot was making a blind instrument landing due to low cloud on September 29th. The aircraft was grounded for 48 hours while repairs were carried out. Dan-Air said: 'The pilot was a very experienced pilot with no blemishes on his record. He is back flying again after losing his seniority.' An airport worker who witness the incident said: 'He really was lucky, if the wing tip had hit the soft ground at the side of the runway instead of the tarmac, the aircraft could have quite easily overturned.'
A further incident came occurred in October when two RAF Tornado jets sandwiched a civilian Dan-Air Boeing 737 on a flight to Kos. A Dan-Air spokesman said that both military jets passed within 500 feet of the 737 in a high-risk incident that forced the pilot to bank steeply. The double miss happened on Wednesday October 10th, the day after the Ministry of Defence announced the results of an enquiry into the January collision between RAF Tornado and Jaguar jets near a Northumberland village 12 miles away. The incident occurred minutes after the Boeing, carrying only its crew of seven, took off from Newcastle Airport to fly to the Greek Island of Kos to collect passengers. The spokesman said: 'Pilot, Captain Roger Jackson was climbing through 14,000 feet when Newcastle Air Traffic Control advised him of possible 'pop up traffic' below. At that moment he saw navigation lights of aircraft coming towards him on what he thought was a collision course. So he banked very steeply for an aircraft like a Boeing 737 and switched on all the lights to fully illuminate it. In view of the instructions given by Newcaslte Air Traffic Control, we suspect the RAF pilots were where they ought not to have been.'
Berwick M.P Alan Beith claimed the RAF jets should not have been in the area at all. But the following day a Ministry of Defence spokesman would not comment on whether Tornado jets were allowed in the area. He said the incident would be fully investigated by the independent joint air miss working group.
The very next day a company BAC 1-11 reported an air miss with two gliders in an unrestricted area of air-space over Aviemore. The BAC 1-11 with a crew of six and 68 passengers on board was climbing at an altitude of 10,000 from Inverness to Heathrow when it passed 500 feet over the two gliders. although no evasive action was needed the pilot had reported a small blip on his radar.
The Civil Aviation Authority said it would investigate. At the same time Dan-Air rejected claims that their pilots 'sometimes took unofficial short cuts' on flights between Inverness and Glasgow. Airline spokesman Peter Clegg was responding to allegations made by Cairngorm Gliding Club instructor Alan Mossman who said that Dan-air were well known for diverting from their proper routes.
Mr. Clegg said there were no mandatory air corridors for the Central Highlands for commercial aircraft. 'Although they are not legally restricted, our pilots always follow instructions given to them by Air Traffic Controllers. We don't blame the gliders for this incident, they are as entitled to use the air as much as anyone else. Legally the gliders can fly anywhere they like because it is not controlled air-space, it is in nobody's interest if the situation remains unresolved. Whilst we accept that it is more dangerous for the glider pilots than for our pilots, because in a near-miss the gliders could be in trouble because of the turbulence caused by an airliner, you never can tell. Clipping a glider can have an equally bad effect on a large jet.'
The area concerned was well known by gliders, who crossed the A9 road near Loch Garry. the gliding club the gliding club was at Fishiebridge Airfield near Kincraig where 15 gliders were kept. Mr. Mossman said that Dan-Air jets regularly overflew the airfield, sometimes 'directly'. 'The majority of Dan-Air flights into Inverness take a short-cut through unprotected air-space instead of using the air route provided for commercial aircraft. By flying into uncontrolled airspace where no separation from other aircraft can be guaranteed, they put passengers and other aircraft at risk - all to save a little time and some expensive fuel. Their complaint about gliders being dangerous and difficult to identify is over the top. We really have been slagged off for no reason at all.'
Mr. Clegg said: 'Perhaps some of our pilots are unaware of the location of the gliding club, but I know the manager of our BAC 1-11 fleet is going to discuss matter with Mr. Mossman. It is not in anybody's interest to leave matters as they are. Next time it could be a gliding club from Deeside, or a club from way outside the area that gets involved. Something has to be sorted out. Hopefully the joint air miss working group will consider this when it gets down to examining the detail.'
Two new scheduled services from Manchester were announced on October 18th. There would be daily flights to Gothenburg in Sweden and Innsbruck in Austria. The flights would feature the business class cabin 'Class Elite'. Davies and Newman promised to clear the air over rumours about the company. They said they would issue a statement 'as soon as possible'. Press speculation had reached fever pitch over the last few months. The appointment of David Jame, one of the city's toughest trouble-shooters had been hoped to calm the gossip. His position was part of a two year plan for the airline. He would be at the helm of the airline, with Fred Newman being asked to step aside. Eyebrows were certainly raised within the industry. Newman was highly regarded and his own stewardship had seen the company grow from a single aircraft operation in 1953 to the country's second largest airline. No sooner had the rumours abated about the the future of the airline, before new ones started about bankers insisting on top level management changes in the company as a condition of guaranteed backing. Davies and Newman issued a statement on October 18th which said, they would be 'making a statement concerning the company’s plans and prospects as soon as possible”.
Shares in Davies' and Newman, which had plunged in the wake of previous Dan-Air speculation, were unchanged on October 18th at 140 pence. This compares with a high this year of 760 pence. James' appointment came with a rumoured salary of £30,000 per month, which would guarantee the bank's backing until at least the end of 1991. It was then confirmed that Fred Newman would resign his Chairmanship and his voting rights on the board.
As this website highlighted on this 1990 section, James was Chairman of The Eagle Trust, a position he held when he was brought in as part of a rescue package. He would continue as Chairman and Chief Executive of Eagle Trust. On announcement of James' appointment Davies and Newman shares bounced up 15% ending at 155 pence on the news that James would become Executive Chairman on November 1st. James said:
'Most of the company's employees would keep their jobs. My appointment does not mean a threat to the established regional routes. I have no pre-conceived ideas about closing off any of the routes. One has to look at profits, you cannot go cherry picking and just keep the best routes, you have to look at the total.'
It was also revealed that the company was no longer up for sale. Earlier this year it had been speculated that a merger between Dan-Air and another airline was on the cards. But' Dan-Air Engineering, is still up for sale, with good progress being made with potential buyers.' said James. Aer Lingus was reported to be interested in the engineering division.
Angry passengers on a flight from Gatwick to Aberdeen which was delayed for five hours on October 18th were demanding an explanation for the disruption. The flight had to be aborted when it was two-thirds down the runway on its take-off. Weary travellers, who were due to leave London at 11 am, were asking why the flight was allowed to go ahead initially, when the plane was known to have faulty equipment. Passengers were informed minutes before the plane was due to take-off that the pilot had become aware of a faulty gauge on the plane. But they were left stranded for more than an hour while engineers checked whether to let the flight proceed or to call in a replacement aircraft. When they were eventually given the go-ahead to depart at 12.10 pm, the flight had to be aborted when the fault recurred. However, the problems continued when passengers were transferred to a replacement plane, only to find that one traveller had left, and an hour long baggage search had to be carried out. Exhausted travellers on the packed flight which contained a higher proportion of children than normal eventually made it back to Aberdeen at around 6.15 pm. One Aberdeen passenger, Mr John Marshall, admitted the aborted take-off was 'quite scary' but said most passengers realised what had happened. He said: 'The feeling among most people was that the captain had done the right thing, but he should never bad been put in that position in the first place.' A Dan-Air spokesman apologised for the 'excessive delay', but said it could not have been avoided. He said: 'It is obviously far better to be safe than to fly to Aberdeen and have to shut down one of the engines. It’s just one of those mechanical things—we did our best.' The spokesman said the problem arose when a gauge on one of the plane’s four engines showed it was using an excessive quantity of oil. He said engineers had investigated the problem and decided the plane could depart. But during take-off the gauge was still showing high oil consumption and 'the pilot decided not to risk it any more.' The spokesman said the delay could have been avoided if the passengers had been transferred to another plane when the fault was first noticed, but said that another aircraft and crew may not have been available at that time. He admitted the plane had had the same problem before and said: 'The mechanics thought they had put it right and cleared it for this flight.’
The first half yearly financial report was imminent but before they were released towards the end of October, the company received a profit warning. Results for the first half year to June 30th were expected to show a substantially larger loss than the £7.662 million for the same period in 1989. As part of a package to be arranged by David James, the Davies and Newman family, who owned 62% of the company also agreed to suspend their voting rights while David James was Chairman. James said:
'I am encouraged at Dan-Air's present performance in having acquired 85% of its charter capacity for the 1991 season. The Newcastle - Amsterdam service would be extended at the end of October to include Berlin, the new capital of a re-united Germany. The flights would use a BAC 1-11 jet. There would also be improvements to Dan-Air and Europcar's 'Fly Drive' scheme on all 41 scheduled services.
The innovatory financing package received approval from the Stock Exchange, was finalised just hours before the group was expected to go into administration by its bankers, led by Lloyds. Instead the company had negotiated its existing credit facilities of £40 million, whilst securing new lines worth a further £30 million. The new £70 million total would not need to be re-negotiated until January 1992.
Dan-Air disclosed interim pre-tax losses on October 27th. They showed losses of more than double of those of last year. Losses for the six months to the end of June totalled £18.7 million compared with £7.7 million for the same period last year. Retiring Chairman Frederick Newman blamed rising costs, aircraft over-supply and fewer people taking holidays. At the operating level, Davies and Newman made losses of £2.2 million compared with a profit of £8.7 million the last year. Shares were cut by 35 pence to 115 pence, wiping £2.5 million, or 23% off the company'’s stock market value. On top of the operating losses, the group had to weather aircraft hire charges of £6.7 million, depreciation of £5.6 million, and interest charges of more than £5 million. There is no interim dividend. The company said on October 26th that planned cost-cutting measures include cutting the number of charter aircraft, selling the engineering division and transferring Dan- Air's Headquarters to the parent company’s Horley office. On the positive side, the company says its ship-broking arm has been performing satisfactorily while its travel agency is continuing to maintain improved profits. The deal was seen as crucial to reassure Tour Operators and the four million or so charter passengers expected to fly with Dan-Air during 1991 and the two million plus scheduled service passengers.
James said: 'The fuse was getting quite close to the powder-keg.' There was also to be a cash boost from the sale of the engineering division.
In return for this re-financing, the banks would get a 'success fee' equivalent to a percentage of the company's net asset value on a given date, certified by accountants, Coopers and Lybrand Deloitte. This was believed to be the first time that banks had been offered this kind of incentive to participate in a rescue deal. As well as working with Dan-Air and The Eagle Trust, James had been involved in the rescue of North Sea Assets. David James said the situation at Dan-Air was 'unprecedented' and that the only alternative was administration and the break-up of the company. It was later disclosed that all of the Newman family members had given an undertaking not to block crucial changes to the board except in the case of a contested bid for the company.
The details between the company and its creditors were complex. Davies and Newman agreed to pay interest at 2% above LIBOR and the success fee would be based on the valuation of the company in December 1991. the payment would be one third above the net asset value - between £26.25 million and £45 million and 10% of anything above that. But the minimum was set at £8.75 million. Which would mean Davies and Newman having an NAV of £70 million. The fee was unsecured and subordinated to all other creditors. James said that he hoped that this deal would be a 'frontier breaker' Encouraging other companies to go for a similar deal rather than just go for insolvency.
James' appointment came with the reassurance that Dan-Air were no longer looking at selling the airline or joining up with another carrier. They were looking at returning the airline to profitability. His appointment would take effect on November 1st. One of James' first moves as Chairman, was to replace most of the Board of Directors at Dan-Air with people he had personally chosen. Many had no experience in aviation. He then told the press and the industry that he saw no reason why Dan Air could not be turned around. Dan-Air Engineering (DAE) would remain up for sale. But now James and his team would be giving instructions to Bearings Brothers, who were to oversee the sale should it happen. The price tag of £25 million would give a massive injection of cash to Dan-Air.
Dan-Air Engineering had MADE A PROFIT LAST YEAR. Davies and Newman hoped to retain 20% of the company and use the facilities to maintain their own aircraft. In a not entirely unpredictable response, Air Europe announced they would not be renewing their maintenance contract with Dan-Air Engineering - and would not be chartering ANY of Dan-Air's aircraft this year. Air Europe would also be introducing scheduled flights to Vienna this year in direct competition with Dan-Air. Air Europe had already made the decision to go head to head with Dan-Air on the London Gatwick to Paris and Jersey scheduled services. Air Europe were looking into the possibility of introducing flights from Inverness into London Gatwick with the option of a stop at Manchester.
James' idea revolved around Dan-Air securing a re-finance package and concentrating on becomming a stand-alone scheduled airline. He said he wanted to commence a fleet renewal programme. The General Manager - Europe - Vic Sheppard announced that in 1990; 'Dan-Air would be phasing out our smaller aircraft and thinner routes'. Those aircraft would be replaced by newer, quieter and more economical jets on high density routes such as Gatwick-Paris, which would soon be offered up to nine times a day.
Sheppard said;
'I am well aware that people only see Dan-Air as a cheap and cheerful charter airline, and all that goes with that, but when people have tried our scheduled services, in particular the 'Class Elite' they are often pleasantly surprised at the level of service we offer. Our market research shows this, and it shows that they are highly likely to come back for more.'
In 1990, 24% of Dan-Air's scheduled passengers were travelling on business class and 40% of all flights operated flights were done so on the scheduled network. The new company strategy was to take that total to 60% in 1991. The six domestic services into Gatwick already offered interlining with with other airlines or Dan-Air's flights. In particular, American carriers were impressed with Dan-Air's ability to bring passengers into Gatwick to join their flights Stateside. Dan-Air had no ambitions to enter the long haul market themselves, so interlining agreements worked well. *Interlining for those who might know is a system between two different flights. For example; a Dan-Air flight from Newcastle to Gatwick would be timed to land at Gatwick with enough time for the passenger to transit to an American flight with another carrier. The return USA to Gatwick flight would also have a Dan-Air aircraft timed to depart from Gatwick to Newcastle - interlining!
The system worked particularly well for passengers whose regional airport had limited direct destinations. Successive Governments had refused to allow independent airlines access to Heathrow. Air Anglia, the small regional Norwich based carrier had tried in vain to access Heathrow to feed other passengers from several UK airports onto flights to worldwide destinations. Neither British Airways, the British Airport Authority nor the Civil Aviation Authority would permit access other than the most fought after slots. Dan-Air had waited almost thirty years to to gain access with one route and British Midland had less than a handful of services into Heathrow. Other than those two carriers not a single UK independent gained entry to the airport. No charter flights flew out of Heathrow either. Air Anglia were so incensed at being denied entry that they contacted KLM. An Air Anglia manager called David told us.
'I don't believe that people in aviation today could comprehend the regulatory bodies that restricted every part of airline activity. Economics, although sometimes given as a reason for declining an application, didn't really come into play. On paper our proposals would have worked. British Airways did not fly into Heathrow from every UK airport, and they certainly didn't fly from every regional airport to all their international destinations. So, what conceivable reason could anyone have for denying us the opportunity to provide feeder flights for them. I personally gave an example of a person walking into a travel agent in Norwich and wishing to purchase a ticket to fly to New York. The options were London Heathrow with BA and from Gatwick with another airline, or alternatively to fly direct from Manchester. If you look at a map of Britain you can see how remote Norfolk is. Travel by road and rail to London took hours. But the CAA would not hear of a link. So we approached KLM and they were most agreeable. The flying time to Amsterdam was around an hour and passengers could then join a KLM flight to anywhere in the world. So the CAA actually gave us a licence to operate into Amsterdam, knowing full well that we were providing a boost to KLM, Schipol, the Dutch economy and ourselves. We ended up replicating the service from Aberdeen, Newcastle, Tees-Side, Leeds/Bradford and Humberside. It worked incredibly well, KLM added us to their computerised system and we were working flat out providing them with passengers. This continued long after we joined other airlines to form Air UK, where the partnership continued. It took Air Anglia about five years to get into Gatwick, where we could interline with other airlines, but it was nowhere near as fruitful as the KLM set-up. We never could understand who to fully point the finger at, but it was protectionism at its very worst, but who was being protected and from what? I believe that many UK airlines would have grown if they were allowed the same opportunities. When we became Air UK we applied for about five international destinations, we said we would use the F28 jet, which carried about 60 people. we thought it would be easier to fill than the BAC 1-11 that Dan-Air were proposing on the same set of applications. In the end the CAA rejected both our applications and gave the routes to British Airways and British Caledonian, saying we didn't have the expertise to match their operation. I remember Dan-Air being most annoyed at that. They had been operating twenty years before either of the others were created. There is no wonder that there was so much resentment in aviation.'
There would be an second daily return flight between Aberdeen and Manchester added from October 29th. The low price of £69 return was hoped to directly compete with British Rail and a special off-peak fare of £50 return would be offered on the Manchester-Gatwick service through the winter months. The standard fare was £142.
Approval was granted by Horley Council for an expansion of Newman House. the property would undergo marked changes in design. the ground floor which was originally going to be a car park, and would now consist of offices with an underground car park constructed. Councillors had complained about the number of parked cars congesting the town already. Four shops and two maisonettes would also be constructed. It was not revealed at the time what the shops would be used for, but they would be larger than the ones submitted with the original planning application. Approval was only granted on the condition that the existing 124 car-parking spaces were provided elsewhere during the construction period.
Announcing pre tax losses of £18.7 million on October 31st for the last six months trading made grim reading. A further 15 pence fell off the share price of Davies and Newman. Having increased by 20 pence at the time of the announcement of David James' appointment. They now stood at 140 pence per share.
David James gave a press conference on November 1st, saying: 'The airline will continue fly despite selling off the engineering division. the core business Dan-Air is certain to survive in one form or another. The Board's first task is to give priority to addressing the corporate strategy for the future and deciding precisely what parts of the organisation should be developed and which may represent potential for realisation.' he confirmed that talks were taking place with Cathay Pacific and others with regard to the sale of Dan-Air Engineering.
As Europe announced they had prepared for the 'de-regulation of the airways' in 1992. Dan-Air now also found itself having British Airways as a direct threat on its Gatwick-Toulouse route. British Airways wanted to get back onto the Gatwick-Paris service, but was told by the CAA that as Air Europe were already competing with Dan-Air, a third airline on the route could threaten their future. The CAA said: 'Passenger interests are best served by a number of British airlines strong enough to compete with each other. However, the policy has been formulated and adopted against a background where competition does not and cannot take place on equal grounds. On occasion therefore decisions might have to be taken which limit the actions of dominant airlines.'
The CAA's statement can be seen as ironic, when at the same round of applications where British Midland had made a formal complaint to the CAA about British Airways on the Heathrow-Belfast service which British Midland accused BA of flooding the route with unprofitable flights in an attempt to squeeze British Midland out. The CAA said they would not restrict BA's flights as it would be of no benefit to the passengers who wished to fly on the route - 'In this case, the authority found that on the whole, BA were acting in the interests of the passengers. The decisions reflected the commitment that the CAA has to maintaining a multi airline industry.'
British Airway's new service would be flown with Boeing 757 aircraft, whilst Dan-Air would use the BAC 1-11. It was announced that Air Europe were keen to operate flights between Aberdeen and Gatwick. There would be a second return flight on the Aberdeen-London (Gatwick) and would be introducing an off-peak return fare of £69 on the Inverness-London (Heathrow) service. The fares, they said, were hoped to provide an alternative, competitive choice to British Rail.
Gazza is full-bodied, fresh and fruity with alight, easy going style. It was not however, the former England and Newcastle United footballer. It was a wine experts description of a tipple from Chateau Gascogne. Bottles of the top rated vintage were given to passengers on Dan-Air's new Class Elite flights from Newcastle and Tees Side. Dan-Air's assistant wine buyer said 'Gascogne is a light, east drinking wine with a fresh, fruity character. It's dry but not too acidic. It is ideal with poultry, white meat and fish. Gazza said he was sure the wine wads great, but he would rather be down at the boozer, having a few pints! the Class Elite would be available on the New Newcastle and Tees Side to Berlin and Amsterdam flights. Dan-Air's Sales Manager,Tony Mortimer said:
'Travelling Class Elite give business travellers the status that they deserve. So that they can arrive relaxed, refreshed and ready to do business. After departing Newcastle, there is a short stop at Tees-Side on the morning flight when passengers can tuck in to the delicious hot breakfast on the 50 minute flight into Amsterdam on board our Whisper Jet the BAe146. Our Elite passenger get hot towels, a free bar including Champagne, entry to an executive lounge with free snacks and bar. There is dedicated check-in with priority boarding and disembarkation. Extra luggage allowance, bigger seats with extra leg-room and the centre seat has been converted into an extra table. It is what business flying was always meant to be.'
Rumours that Dan-Air were having trouble selling the engineering division set the share-price into a spin with the price settling down to 90 pence at one period the price fell by 10 pence per share. David James said: 'Stuff and nonsense, we have had a number of offers. Scheduled bookings have recovered since the airline was rescued.
Aer Lingus, the Irish national carrier publicly expressed an interest in buying Dan-Air Engineering. The engineering division did not produce trade figures of its own, but was widely believed to be one of the most profitable divisions within the group. David James then said that Cathay Pacific were interested. In the end neither purchased DAE.
Prime Minister John Major made a plea for bosses to limit the pay awarded to top flight managers as part of the battle over inflation. This had apparently fallen on deaf ears at Dan-Air as it was revealed that they had given their new Group Chairman David James a £450,000 contract, while their previous Chairman Fred Newman was on £36,000.
Some of the older BAC 1-11s in the fleet would not meet the new noise reduction targets set by the EU. They were also lacking CAT III technology which prevented the types use in harsh weather. Some had been fitted to CAT I. The lack of CAT III had not been considered to be a problem on many charter routes, because they generally had good weather. When the 1-11s were placed on Northern European Scheduled Services some of them became problematic when weather was bad. The airline decided on a long term strategy of phasing out the BAC 1-11, HS 748, Boeing 727, and Airbus aircraft and consolidating the fleet on just two types. The Boeing 737 and the BAe146.
One the the seventeen charter flights to see Santa ended with tears on 19th December when the flight was cancelled. Cosmos holidays had arranged the flights which cost £229. Thick fog at Manchester meant that the aircraft, a BAC 1-11 could not take-off. The 119 passengers including 50 children had waited three hours to see if the fog would clear but to no avail. Dan-Air said they could provide an aircraft to take the party out, but not until Boxing Day. Parents complained that they had kept on the aircraft for three hours and were not let off to stretch their legs or have a drink. Cosmos' representative said: 'We will have to have a think if we take the Boxing Day flight as it might seem pointless going to see Santa after Christmas. All passengers are entitled to a full refund. We are sorry that the group had to stay on the aircraft, but that was because it was a one-off day trip flight and if the fog had lifted they needed to be able to take-off quickly. The Captain had decided that he was not prepared to risk lives.'
Dan-Air said that their Berlin flights were getting busier all the time. The service had started shortly before the fall of the notorious fall and tourists were keen to see the other side of the city. Flights to Innsbruck had seen an increase of 42% in passenger numbers since the service started.
A Dan-Air Captain Mike Ralph played cupid at 33,000 feet in December when he invited Kay Kay into the flight deck. In the cockpit Captain Ralph presented her with a bouquet of flowers and conveyed the marriage proposal to her from Londoner Richard Brooks, just as the aircraft was flying over Gretna Green. The cost of this? £50 donated to the Children In Need appeal. Captain Ralph pledged a further £50 is she accepted - she did! When passengers and crew on the flight heard about the proposal they raised another £92 for the appeal. The figure was boosted another £20 when cabin crew and passengers decided to 'fine' the pilots for performing a less than 100% smooth landing at Heathrow. Dan-Air staff at Gatwick raised £2,000 towards the appeal.
A company Boeing 737 flew to Moscow on a charity flight in December. Charities had managed to get a plane load of baby food and Dan-Air agreed to fly the food destined for hungry Soviet babies free of charge. The flight brought much needed good news to the company. As did the award 'Airline of the Year' awarded to Dan-Air by ILG. This was ironic as Air Europe were relentless in their campaign to smear Dan-Air;
After declaring that Intasun and the ILG Tour Operators would not be chartering any Dan-Air aircraft in 1991. ILG went on to say that they had no plans to use any Dan-Air aircraft at any time in future. Dan-Air Engineering had lost the contract to service Air Europe's aircraft the previous year.
As a company ILG and Air Europe were giving the impression that everything was going well. Outwardly it was - and yet the board-room had seen changes with dismissals and walk-outs. Air Europe management had complained that ILG was effectively running the airline, giving it little autonomy. One senior manager told this site - 'Frankly things were spiralling out of control.' Behind the scenes the company's cash problems had, on the face of it, been resolved. With backing in place from the Swiss firm Omnicorp and German retail Asko. Unlike Dan-Air, not of these events had reached the public or press.
Dan-Air, unlike Air Europe, was asset rich, with real estate that they owned, several aircraft in the fleet were owned outright and spare parts in store were valued at millions. The landing slots owned by Dan-Air were colossal. The sale of DAE was said to be 'progressing' by David James. The decision to sell off Dan Air Engineering is explained in great detail in the company history section of this site.
1990 had been a record year for the amount of passengers Dan-Air carried 6,276,000 passengers. 4,472,000 on charter flights and 1,804,000 on Scheduled Services. Their aircraft had flown 68,903 flights. Of those 35,560 were charter flights and 34,343 were scheduled flights. In terms of its network, all flights covered 72,666,000 aircraft km. Forty scheduled Service destinations had now been added to the network and in total 220 airports had been visited.
The HS 748 aircraft was seen to have reached the end of its use. They did not have the capacity nor efficiency of most of the jets in the fleet. The oil supply charter flights had dwindled to a mere trickle, and several HS 748 aircraft were sold, leaving the fleet total at just eight.
NEW ROUTES AND ROUTE CHANGES
- Gatwick - Amsterdam feeder route - March (Taken over from British Airways)
- 2 April - Gatwick-Berlin service commenced - April 2nd
- Gatwick-Dublin service discontinued - April 4th
- Gatwick-Vienna service started - May 2nd
- Gatwick - Ibiza - ‘Class Elite' introduced. May
- Connecting flights introduced between Manchester, Newcastle, Tees-side and West Berlin. October 29th
NETWORK & PRESS 1990
1991
New Year brought much needed good cheer when Dan-Air was given the licence to fly Gatwick-Amsterdam after British Airways dropped the service. Dan-Air would commence operations in March. This was a premium route that was almost guaranteed to succeed. However, Dan-Air announced it would be scrapping routes from Newcastle and Tees Side to Norway in March. This was in response to a challenge from Norwegian airline Braathens Safe who announced they would be going head to head with Dan-Air. It was felt by many that they were not in the mood for a price war with another airline after being stung so heavily on the London-Dublin service.
The Inverness-Heathrow service continued to grow a study group were consulted by the airline and was suggested that a larger, more modern aircraft be used. Dan-Air agreed to replace the 104 seat BAC 1-11 500 series with a 124 seat Boeing 737 200.
Emergency services were put on full alert when a BAC 1-11 took off from Gatwick to Zurich on January 7th when the Captain reported a hydraulic leak. The aircraft was forced to turn back where fire crews were on standby, but the aircraft landed safely.
Dan-Air Engineering was sold to the Danish company FLS for £27.5 million, the employment of the 1,500 or so people looked to be secure. The company would now be the largest non airline owned engineering company in the UK. Its largest customer would be Dan-Air. The engineering division had spare parts worth millions of pounds and real estate at Manchester, Lasham and Gatwick. The sale brought a cash injection to the company and on January 10th the share-price climbed 35 pence to 200 pence per share.
Dan-Air Engineering was always a profitable division within Davies and Newman. Incoming Chairman of the group David James said;
'The sale of DAE will bring immediate financial benefits, it will generate a significant cash sum which will be used to reduce our present bank borrowings and strengthen the group balance sheet. Additionally Dan-Air will have the benefit of improvement in its trading performance in 1991 arising from the saving in bank interest and the elimination of the loss previously resulting from the under-utilisation of the engineering facility. Dan-Air will now be able to devote all its energies to the operation of its airline activities involving a current fleet of 40 aircraft.'
In other words - selling off a profit making division to pay for a loss making one...... That sentiment may not be easy to take, but as one engineer told us;
'We were not happy, we had been loyal, we had been profitable. We never had people coming to us saying that we had to make savings. We were praised for what we did. The vast majority of people loved what they did. We had some pretty impressive clients. There was a war on in the Gulf - yes things needed to change within the airline, things might well have been cut. But we should have been one of the divisions they left alone. Air Europe had signed a big contract for us to look after their 757 fleet. Then they said they weren't going to renew it. That wasn't that down to our work or the prices we were charging - that was down to ILG wanting the airline out of the way. All those new airlines that came out that took Dan-Air business - that had nothing to do with us either. Maybe the airline should have been looking to buy a Tour Operator years before....David James.....saying they would be able to concentrate on running an airline now we were out of the way. That is a laugh, the airline had been doing exactly that for forty years nearly. I think they knew how to do that. They needed to just weather the storm of the war and the recession. We had done all of that before. It's so sad, I can't tell you how much of an inventory of spares we had. I have no-idea who worked out the sale price. I did later find that we had spares that were worth double figures in millions. Jesus, the hanger at Gatwick - you could just go on and on....'
On January 12th British Airways made the decision to scrap their London Gatwick-Amsterdam service in March of this year Dan-Air immediately expressed a desire to replace British Airways on the route, approval was quickly given and flights could start the day after British Airways withdrew.
The travel industry had plenty to worry about in January when military action in Iraq looked inevitable. Tour Operators suspended flights to Tunisia, Cyprus and other Mediterranean areas. Intasun had a regular package holiday to Goa in India and the last flight came back to the UK in January. The Air Europe Boeing 757 which operated the flights changed the refuelling stop from Dubai to Istanbul. All passengers in resort were told their flight home would now be on a scheduled service with another airline. It was estimated that cancelled flights would cost Manchester Airport alone more than £100,000. January had always seen the biggest push from Tour Operators keen to entice the public into booking their summer holiday. Despite the prospect of war being thousands of miles away from most resorts British travellers preferred, bookings were very sluggish.
Dan-Air Director Vic Sheppard flew into Belfast to deliver news to staff that the airline was withdrawing all of their scheduled operation from April this year. He told them: 'We regret that this decision to withdraw from Belfast has been necessary, but at a time of very tough conditions in the airline industry, we must invest our resources into areas where there will produce the best results.'
The flights axed were Belfast - Gatwick, Newcaslte, Bristol and Cardiff. The 23 staff based at the airport would be given priority for vacancies that arose in other parts of the scheduled services division. There would be assistance available for relocation. Vic Sheppard said: 'Those people who do not wish to apply for other positions within our network will be offered severance payments and offered as much assistance as we can offer in finding other employment.'
Dan-Air became the third airline to withdraw from Belfast due to unprofitability with British Caledonian and British Midland being the most recent. Air Europe had submitted plans to operate four return flights a day from Gatwick to Belfast and British Airways announced that they were stopping all services to Ireland as they could not make a profit on any of them. Air Europe said they were confident they would make a profit, using Fokker 100 aircraft.
Air Europe and ILG had been given additional financing late in 1989, their public perception remained intact, while a team had been brought together KPMG Peat Marwick McLintock partner Alan Comber was in charge of the group of people who were to examine in great detail the financial situation of ILG. Privately ILG had approached their principle banker, Lloyds to ask for funding to stay in business. Lloyds had reluctantly agreed to a rescue package to re-structure ILG's finances. This would involve translating ILG's £50 million overdraft into equity through a share rights issue. ILG was no longer a public company, following a management buy back, but individuals and companies had been invited to invest. Lloyds subsequently said 'We saw our investment as us dealing with the ILG' s balance sheet problem, rather than their liquidity problem.'
The first sign that there was any problem at Air Europe came when the airline made 150 people redundant from their head office in Crawley. Part of the blame was laid on the Gulf Crisis which had seen popular resorts in Israel, and Egypt deserted. The Company Secretary later said:
'It was clear from as early as December 1989 that the group had a cash-flow problem. It was also very clear that ILG was under-capitalised to run a major scheduled service airline.'
The liquidity problem had been, on the face of it, sorted out by shareholders in ILG's holding company, including Baltic, the UK Investment company, Legal and General and Swiss financier Werner Rey. All of this was on condition that Harry Goodman step down from his position on January 30th, although he remained as Chairman. None of this had been reported in the press.
Goodman's position as Chief Executive was taken by Robert Mackenzie, who had been appointed by the bank. Mackenzie had been recruited from Stonehouse PLC and he was later reported to have been working under a guaranteed fee. This had echoes of what was happening at Davies and Newman, but without the full glare of the media spotlight.
Air Europe said that their charter business at Gatwick was down 21%. There had been claims that people were reluctant to fly for fear of attacks on aircraft by Iraqi insurgents. Air Europe admitted they had been hit by the double blow of a drop in charter business and the recession,saying: 'There's no one thing particularly to blame, but a number of factors have contributed toward the job losses.'
The consumer magazine Holiday Which delivered their annual report into the state of Britain's airlines and tour firms. The magazine had said that Britain's Tour Operators were sinking into a slough of mediocrity and 'needed to pull thier socks up'. The bottom of the pile was Airtours. No matter which way you looked at it the report had concluded that Airtours were that Basil Fawlty of Tour Operators. Holiday Which said: 'There remains a huge gulf between the top-rated and the bottom-rated operators.' The magazine said that the company provided the worst accommodation, the worst representatives, the worst brochures, its travel arrangements were below standards. An under-cover reporter for the Sunday Express had booked an Airtours holiday and flew with Dan-Air. He described the experience as 'Good old Dan-Air on a good old Boeing 727 which was built like a brick outhouse, solid as a rock, and safe as houses. The flight was a little cramped for a four and a half hour flight but 'the food was really good and the drinks were cheap and plentiful.'
Passengers travelling to London from Newcastle would see more flight services this year. Flights between the two airports were to be increased to three round trips on weekdays from March 3rd, and an executive lounge would be opened at Newcastle Airport before the start of the summer season. To save time, passengers with hand baggage only, who need to make a single day round trip to London Gatwick airport could now choose their return seats and collect their return boarding passes when checking-in for the outbound flight. People holding return boarding passes were asked to report to the airport gate just 15 minutes prior to take-off time to ensure their seats were held, and people travelling from Newcastle to London Gatwick and onwards on a connecting flight by air from Gatwick could pick up onwards boarding passes at Newcastle. Flights from Newcastle to Oslo, Stavanger and Bergen would be suspended due to changing economic conditions. Scheduled Services Director, Vic Sheppard said the Norwegian routes had not shown the growth expected following the imposition of restrictions on foreign workers by Norway and a drop in traffic due to a reduction in Norwegian oil exploration activity. Sheppard said: 'Braathens has said it intends to operate between Norway and Newcastle this year, and we do not believe a two carrier operation will be viable on these high-cost routes. However we will not be surrendering our licenses to Norway and we will keep the economic situation under review with the intention of re-commencing operations as soon as it is economically justified. We remain fully committed to Newcastle Airport, but we will be concentrating our efforts on London Gatwick, where demand is growing strongly.'
Danny Bernstein the Commercial Director of Dan-Air, who was also a director of Davies and Newman Holdings PLC left the company after ten years. Danny, a chartered accountant and a man with cast iron aviation experience was to take up a position as joint Managing Director of Monarch Airlines. His responsibility would be centred on the financial and commercial aspects of Monarch.This came as a second warning from Air Europe came when it was revealed that the company had asked shareholders to stump up a further £40 million on top of £50 million in loans from bankers.
The effects of the Gulf War saw many airlines suffer. In Scotland, the Aberdeen-Gatwick service had seen a down-turn of around 12% in passenger numbers. The prestigious Inverness-Heathrow route saw the first northbound flight cancelled on a Saturday, and the same the following Saturday. A Dan-Air spokesman said this route was also down by 12%, mainly as a result of a drop in the number of Japanese and Asian travellers visiting the Scottish distilleries. He added that the second half of January was traditionally the quietest part of the year and that given the circumstances, traffic was holding up rather well.
A war broke out in the Gulf, Dan-Air Air UK and British Midland heeded the advise given by the Government to conserve fuel. The three airlines would all join forces on routes where they were in direct competition with each other and to reduce the number of services offered in an attempt to save fuel.
Davies and Newman shareholders were warned on February 2nd that a rights issue may be needed to get the troubled company flying high again. David James told a special meeting that the rights issue was one option that had been identified.
Air Europe commenced scheduled flight to Vienna from Gatwick in direct competition with Dan-Air. Their flights would include their business class 'Premier' where centre seats would be unsold. Air Europe used effective promotion to give the impression that they were withstanding any pressure from the struggling economy. It escaped press scrutiny when Intasun had cancelled half a million holidays the year before. Harry Goodman's own interview in 1990 had seen him say how much he liked to win. His claim that Air Europe's operating costs were 40% lower than BA's was never placed under the microscope. He had said that Air Europe's scheduled services were flying with 'satisfactory load factors', with a strategy of low fares and economical aircraft
But amid Air Europe's expansion and boasts of success, at Gatwick, 50 more of the carrier's staff were made redundant citing 'many factors' as the reason. 'We employ more than 2,300 people and the redundancies are mainly administrative. Air Europe has always kept overheads low and all the things came together. Two weeks ago everybody was glued to their televisions wondering if there was going to be a war. Now there are signs that the situation is improving, although there is a down-turn in traffic globally.'
This news gave no indication that the situation at Air Europe was anything more than what the rest of UK airlines were facing. Their aggressive marketing continued, with them declaring themselves as 'The second largest international UK airline'.
Rumours began to circulate that Lloyds Bank, who had a big stake in Air Europe's parent company International Leisure Group (ILG) and in Davies and Newman were planning to intervene and force the two airlines to merge and save themselves. There had been talk within the industry that Lloyds was also considering allowing one of the airlines to go under, in order to save the other. David James said in an interview with Graham Simons:
'At that time, the Dan-Air group of companies owed Lloyds around £35 million. Air Europe and ILG owed something in the order of £110 million. Obviously, Lloyds were facing serious problems whatever happened - they were attempting to manage both our situations from their Eastcheap crisis management centre in the City. It was Robert Mackenzie of ILG, I think, that talked Lloyds into the merger scheme. All sorts of incentives were offered to us - different debt re-structuring - the works. My diaries at the time are littered with mentions of Air Europe and ILG. Both management teams set up joint working parties. Both sides worked hard. I remember one Sunday taking a series of conference calls from Bob and others that lasted twelve hours solid in an attempt to find ways of saving Air Europe - but nothing came of the talks. My last contact with Air Europe was at 8:45 am on March 4th. When I was called into the CAA to satisfy them that Dan-Air could find the funds to survive the crisis brought about by the Gulf War. I discovered that the CAA had called Air Europe in for the same purpose.'
On February 5th Peter Smith who was Managing Director of ILG was reported to have left the company in a major shake up to save the conglomerate from receivership. Smith, who also served as an adviser to the Prince's Trust said 'I will now be able to give several hours to the Prince's Trust, there is no better place.' Price saw no paradox in this, even though ILG's own Chairman Harry Goodman lost his own Chief Executive role to Finance Director Bob Mackenzie. ILG only staved off the receiver with the help of Lloyds Bank. Smith said: 'For some time now I have wanted to be relieved of the job, I shall now take several weeks off and consider things.' Of the financial problems besetting ILG Smith said: 'As customers go out one door, white faced men in grey suits come in the other. But I still have 25% of management shares in the company. I am secure with or without them. Put it this way - I won't be asking the Trust for a grant.
Heavy snow brought chaos to Dan-Air passengers at Inverness and Aberdeen where flights were grounded. Patient travellers waited for several hours in the terminal until runways were cleared of heavy snow drifts.
Dan-Air announced on 13th February that they were withdrawing eight flights a week from the Aberdeen-Manchester-London service citing the Gulf War and recession as the main reasons. The airline said it was holding up well compared to some of the larger airlines, but that they had lost 15% of business passengers. The 10 am DA 133 daily flight from Aberdeen was cut both ways with the exception of Fridays. Other services between Manchester and London would still operate, as would direct flight between Aberdeen and Gatwick. A spokesman said the flights would definitely be back for Summer and possibly before, stating that they were constantly monitoring the situation.
In an effort to get people flying again Dan-Air reduced fares to 21 European destinations by 39%. ABTA said that businessmen and tourists were staying at home amid fears of terrorist attacks. Return flights from Newcastle and Tees Side to Amsterdam would be down 30% to £93 and Berlin was reduced by 27% to £167. The Manchester-Gatwick flights would have a return fare of £50 return. The off-peak fare had been introduced last autumn as the airline predicted a fall in passenger numbers. But the flights were so successful that it was decided to keep the fares year-round. There would be an additional return flight daily, bringing the total to six flights each way. Vic Sheppard, Dan-Air's Scheduled Services Director said: 'We were the first airline to reduce fares last October to help maintain our market share, despite the forecasts. The recession and Gulf crisis have combined to cut back on business travel and these restrictions on excursion fares are aimed at filling otherwise empty seats. This is a fantastic one-off opportunity to fly on prime European scheduled routes at some of the lowest fares in years.'
The Newcastle Evening Chronicle carried a story about the catering on flights between the city and London in March. The article slammed British Airways, reporting BA stood for 'Bloody Awful' - 'For some time now, their breakfast has consisted of fruit juice, fruit salad and some plasticky cheese and cold meat. Dan-Air they said came close to providing 'a perfect traditional English breakfast' with hot food, tea, coffee and rolls with jam and marmalade. Because of Dan-Air's food on a flight roughly the same distance to London, British Airways hadn't really got an argument for serving such unappetising fare. And it didn't stop at breakfast. On a recent flight to Tees Side the tester was served a delicious jam doughnut with fresh cream. Meanwhile on British Airways all the reported received was a cup of tea and a pack of peanuts!
What had been unknown to most people, was the seriousness of Air Europe's financial position. Both Air Europe and Dan-Air used the same bank; Lloyds. It had largely gone unreported that the International Leisure Group (ILG) had received a rescue package earlier in the year. Lloyds Bank, and major creditor had agreed to swap the £50 million ILG owed into shareholdings. But the implementation of the deal depended on ILG putting together other elements of a package which involved Swiss financier Werner Rey. Mr. Rey's Omni Holdings owned a 49% share in ILG, and planned to inject £40 million into ILG. But serious doubts had been cast on the move since Omni had sought receivership from the Swiss courts while its own financial position was clarified. Air Europe carried on with business as usual in the short term.
Several members of the ILG Board departed and Robert Mackenzie was at loggerheads with board members. In a reflection of what was happening at Davies and Newman again - replacement board members had been replaced with those lacking any airline or Tour Operator knowledge. David James and Robert Mackenzie had been seen by some as saviours on white chargers - in fact neither knew the business they were supposed to be managing. In both cases the city men were on huge salaries and people inside both airlines were questioning whether these men wanted to save their respective airlines or to get their bankers their money back.
David James had stated that whilst his relationship with the Civil Aviation Authority had improved, when he first joined Dan-Air he felt them to be 'sticky'. He knew that both Dan-Air and Air Europe were having considerable difficulties, but felt that the CAA did not perceive the problems Air Europe had, when at the same time, they were very aware of the ones Dan-Air had. He felt that he was getting a raw deal from the CAA, feeling that the pressure that was being applied to him was not being applied to Air Europe. James felt that the CAA were very hard to deal with during the early part of 1991, feeling that not only were the CAA considering withdrawing licences that Dan-Air held, but that the CAA did not expect Dan-Air to be able to succeed with re-financing. James said;
'I was not in the least bit surprised when their problems surfaced, and it became clear that they had a far greater terminal risk of collapse than we did.'
For six weeks of the Gulf War Dan-Air suffered an outflow of funds amounting to £28 million. By Friday 8th March 1991 the amount of money that James had available to draw on was just £920,000.
What was not known to the general public was that the banks had to decide which airline they were going to offer the rescue package to. Dan-Air's strategic advantages included its 11 domestic routes and 36 European routes. James said flights on some of these routes had 'Been curtailed to save fuel and maximise payloads. Partly to offset the five fold increase in fuel costs since the Gulf War.'
Air Europe, and ILG had also been seeking assistance from banks and backers. In terms of product, the carrier was strong. It had a good brand image and their standards of service were highly regarded. In terms of assets, the company, as it happened, had very little. Office space had been rented, and the smart, shiny aircraft were, with the exception of three, all leased. Air Europe had made great headlines with their new aircraft orders. Whilst, at the same time, calling Dan-Air aircraft, old and gas guzzling. Effectively, Dan-Air was asset rich.
Whilst all of Dan-Air's troubles were being heard in public via the press, Air Europe themselves and with newspapers using tawdry headlines such as 'Ailing Dan-Air' or 'Struggling' Dan-Air, Air Europe's very real troubles were not mentioned. In the major research I have carried out, the first indication of anything awry came over a relatively small number of redundancies followed by a report that shareholders were being asked to stump up an extra £40 million. In contrast to Dan-Air's Fred Newman ousted from his position as Davies and Newman Chairman, along with his family and several board members. When the same thing had happened with Harry Goodman at ILG - nothing was reported in the press until March 4th. Even then, it was to speculate if the Werner Rey deal would go through. Reports that Goodman had been forced to step-aside after a rescue package had been arranged 'a few weeks ago' did not make any newspapers until AFTER the airline had ceased operating.
An interview (see above) with Peter Smith on February 5th disclosed he had left the company, finally, on February 7th, a regional newspaper in Surrey covered a story about Gatwick airport being praised for performance. At the foot of the piece, without any headline, the story read 'Air Europe has axed 150 administration jobs. This story was later covered in other newspapers with the editorial leaning towards a general slump in aviation. The redundancies were dismissed as 'administrative'. The second week in February Air Europe announced that they would operate a new service from Gatwick to Nice. Again in direct competition with Dan-Air. The two carriers were now in direct competition on Gatwick services to Paris, Nice, Jersey and Vienna. For two whole weeks Air Europe had been operating with nothing leaking to the press about any difficulties. There must have been high level talks with management. Yet none of them appeared in the press. David James claimed after Dan-Air had been absorbed into British Airways that he was well aware of the difficulties Air Europe were in. The CAA continued to award Air Europe licences - so it is to be assumed that they were not aware of what was literally just around the corner. As you will find out in the following paragraphs the CAA WERE aware of Air Europe's troubles. As was the Secretary of State in the Department of Transport.
On March 6th it was announced that Dan-Air were looking for extra staff to cope with the hundreds of extra bookings that had come flooding in every day since the Gulf War ended. Scheduled Services Director Vic Sheppard said: 'Things are back to normal with a bang. The public have decided it is safe to fly again. On Wednesday there was a surge of 600 extra bookings in one day, and that was before the cut in interest rates.' A combination of discounts and a ceasefire in the Gulf had secured a huge boost for the airline. Tour Operators were also enjoying a surge in bookings with Lunn Poly saying that despite losing five weeks of bookings they were looking at being just 4% down on expected totals. Meanwhile, shareholders at ILG had called a meeting of shareholders in an attempt to put together a capital re-structuring. The German company Asko offered £20 million.
Overnight Asko then asked for more time to get funds. There had been a delay as the firm was being investigated. That night at an emergency meeting the ILG board met to try to find a way to keep the company going. There had been talk of trying to keep the Tour Operation business afloat- but nothing could be sorted. It was decided at the eleventh hour to allow ILG to go into administration. At midnight the leader of a banking syndicate of 14 banks initiated proceedings to retrieve £166 million that had been loaned to ILG subsidiary companies AE Finance and AE Norsk. The loan had been to finance the order of ten aircraft.
On Friday 8th March Air Europe collapsed. Most people were asleep in bed when at 1 am The board of directors asked KPMG Peat Marwick McLintock to put the group into administration. A little under half an hour later City appointed Ernst and Young as receivers. Senior managers of various levels were informed and an emergency plan was put together for when airports would start to fill up. By 7 am ten of the airline's fleet had been grounded after formal demands for payment of outstanding monies owed was not met. Managing Director Rod Lynch informed the staff at that time with a letter:
'Dear Colleague
It is with regret that I have to inform you that due to our uncertain financial situation, the Board of Air Europe has reluctantly decided to suspend operations from today. the Board of Hudson Place Investments, the parent company of ILG Travel and Air Europe have decided to make an application to the courts for an order of Administration for the Company today. The Board of Air Europe has decided to support has decided to support the application, and if the application is successful, the direction of the company will be in the hands of the Court's appointee and the companies' directors will operate under his instruction. He will then decide whether we then reinstate our flying programme. It is intended that we will bring back to the UK all aircraft overseas this morning Friday 8th March. We will not dispatch any outbound flights until further notice.
There will be a further update later in the day. I would ask for your co-operation to allow us to handle this most difficult situation. in the meantime no statement should be made to anyone outside the Company. Any enquiries should be dealt with by your departmental manager.
The failure had taken the country by complete surprise. If anyone was asked which airline was closest to going under, Dan-Air would have been the number one response. I have been researching this website for more than ten years and there is no website online more comprehensive about an airline than this one. This is a proud boast. I could find plenty of stories about the impending collapse and financial mess that British Eagle, British United, Court Line, Donaldson, Lloyd International, Laker, British Caledonian were all in at various stages of their history, and much of it is located on this website, as all of their problems were relevant to Dan-Air in some way or another. I was able to find masses of stories about Air Europe of course, for they never stopped saying how wonderful they were. Their aggressive style of operation was in direct contrast to that of Dan-Air who, if anything, were operating in a quite passive and gentlemanly manner. You can find stories, some subtle, some not, where Air Europe would say - 'We should be able to operate out of Gatwick at night because our aircraft are modern and quiet. Others are not......' Of Intasun not using any more of 'Dan-Air's old gas guzzling jets' whilst at the same time awarding Dan-Air 'Airline of the year'. You cannot find a story where Dan-Air decided to challenge Air Europe on a scheduled service, only the reverse. The fact that Air Europe had, for almost all of its existence used Dan-Air Engineering - and then publicly dropped them. The aircraft in Air Europe's fleet would still need to be maintained by someone. Dan-Air Engineering had lower rates for maintenance than almost anyone. I have had telephone conversations with senior staff at Dan-Air Engineering, who agreed rates were sometimes too low. Dan-Air was a proud airline. Not a ruthless one. There existed a co-operation between them and other carriers. They may have felt aggrieved at being overlooked on many things. But not once could Dan-Air be accused of being predatory. The closest it came to that was when Scottish institutions urged them to wrestle one domestic service from British Airways. From what I have been told, there was a collective sigh of relief when the shutters were pulled down at Air Europe. Captain Alan Selby noted:
'At first I was in shock - because they appeared so strong. Of course I knew that there would be thousands of holiday makers who would be stranded. That would involve a repatriation mission, and they would be covered by ABTA. Those who were on scheduled tickets would just be on their own. Immediately my mind started to think about the opportunities that it might present to us. Would we get any of their routes? I also knew that there wold be a lot less competition on some of the routes where they had deliberately decided to challenge us. I also knew that there would be a lot of people who would now need to re-book their holidays with another Tour Operator - and for once, there wouldn't be lots of airlines in a position to take all that work. We were in an ideal position in a lot of ways. I saw lots of staff that day and one could see the relief in their faces. I don't think anyone was happy that people had lost their jobs or that passengers had lost out. My own opinion is that Air Europe brought a lot of the damage on themselves. I also wished that all of this had happened before David James was thrust upon us. If the regular board had been able to get through the dreadful 1990 I think the outcome would have been totally different.'
With the collapse of ILG, the future holiday plans of 400,000 people were thrown into doubt. On the day of collapse 25,000 people were stranded abroad, and a further 12,000 were due to travel over the weekend. At airports across the UK flights were suspended. In Bristol an aircraft was even stopped as it approached the runway and ordered back to the stand where it was seized to hold against money owed. On the day of the collapse 5,000 passengers were due to travel and at the airport were given a single sheet of paper which read: 'We regret to announce that due to the company's situation, the company has decided that all services will be suspended until further notice.'
Goodman was unable to be contacted, and was believed to be receiving treatment for diabetes in a private hospital. It was reported that he was in the private hospital recovering from 'delayed shock' following a car-crash previous month. He said the day after the ILG collapse: 'They gave me a total medical and found I have five times the amount of sugar in my blood that I should have. I weigh thirteen stone and they have told me I have got to lose a stone. What I miss most is being in the thick of the fray.'
Harry Goodman
The Daily Express said that Goodman enjoyed the good life, driving a Rolls Royce, and being seen with a succession of beautiful blondes. The paper recalled that on the inauguration of the Air Europe Rome service, Goodman had organised a show-stopping audience with the Pope for 20 Members of Parliament, which raised eyebrows because it was well known that he came from a background of Jewish entrepreneurs. Goodman said of the meeting: 'It wasn't really spiritual, it was more of a commercial. He wished us well and said that it was good that borders in Europe were coming down.' Goodman had been turned down for a job at Thomas Cook because of his lack of O' Levels and had worked at a Travel Agents before starting the Tour Operator Sunair in 1974. A year later he bought Intasun and doubled profits when he cashed in on the collapse of Clarksons and Court Line. A committed charity fund raiser, Goodman handed over his share dividends to the Variety Club of Great Britain. he had raised £1 million for a drug abuse charity after being convicted for cocaine use. One travel agent said: 'Harry has always flown by the seat of his pants he never wanted to be the kind of guy who conformed with the city's idea of a business man.' When Goodman was asked if Air Europe would rise up and fly again he said 'I doubt it very much - charter customers will be safe, everything's bonded. I just wish I could take them rather than anybody else.'
Charter passengers were protected by the ABTA bonded scheme, but those with scheduled tickets would lose out as they were now worthless. Ticket holders who had paid cash would get nothing and only those bought with a credit card would be protected by the Consumer Credit act, which entitled them to a refund. Only Dan-Air agreed to accept Air Europe tickets on flights to the same destination, subject to availability.
ILG went to the High Court to appoint a receiver, and announced that unless a buyer was found within a week, the company would fail. At the hearing, it was disclosed that ILG had lost £30 million in the three months to the end of January of 1991. It was also told that ILG had liabilities of £15.4 million. This was astonishing - nothing was reported until the day of the collapse. With one claiming newspaper that Air Europe had failed because of the problems now hitting Intasun. Goodman was described as 'flamboyant' and the 'last of the Tour Operator giants'. The Daily Mirror had carried out a major investigation into Goodman's personal life, mentioning his three failed marriages, and concentrating on his alleged three day binge of cocaine fuelled orgies with prostitutes. He was alleged to have paid sex workers in three addresses. None of that is of any importance to the ILG business. None of that need have been reported. How was it that so much of Dan-Air's business had been reported from the very beginning? It was obvious that someone was leaking the information about Dan-Air. But at what level was that happening?
It was unlikely that a secretary was photo-copying sensitive documents and then selling them to the press, but not impossible. Could the leaks have come from a much higher level? Was there an active campaign for Dan-Air to be highlighted as failing? It is worth pointing out that a World In Action programme had reported that Richard Branson's Virgin Atlantic had been victim to a campaign by British Airways to undercut the fares of Virgin, Air Europe and Dan-Air, the latter of which had a system that BA could not access. Both Virgin and Air Europe shared the same system giving them vital information. High ranking staff had even had private detectives go through rubbish and conduct smears in the press. None of that seemed to involve Dan-Air or Air Europe. The story led to Virgin's going to court in a high profile court case dubbed 'Dirty Tricks'.
On the day of the collapse one newspaper announced that a rescue package had been agreed a few weeks before (See previous paragraphs) with Omni, but the recession had meant Omni had also experienced financial difficulties. Not one newspaper carried the story about any rescue package.
The Association of British Travel agents reassured those booked on package deals that they would get their money back, saying: 'If a company does have to cease trading, then ABTA will protect those who are on, or have booked a holiday. But those booked on scheduled services with Air Europe might not be so successful as there is no automatic money back guarantee for them.'
There was a ray of hope for some. The Tour Operator organisation - the Tour Operator Study Group - said they would arrange for passengers stranded abroad to get home. They also pledged that ILG customers who were due to fly on other airlines and due to depart before midnight on Sunday 10th March would go ahead as planned, and that anyone who had booked and paid for a package holiday with an ILG brand could either have a full refund or an alternative holiday with another operator. Over the weekend, Dan-Air operated 41 rescue flights to meet that promise or to repatriate those abroad.
The administrators KPMG Peat Marwick McLintock said: 'There is a small margin of window, through which the airline could be sold as a going concern'. They went on to say that they were in talks with several people, including airlines, and that they hoped the suspension of flights would be lifted soon. The company continued to trade, with holiday-makers and passengers told to contact their travel agent for information. Holiday-makers would not lose money as ILG was a member of the bonded scheme, ATOL and ABTA. Those on scheduled services were told to contact their travel agent. Twelve of Air Europe's 36 aircraft fleet were impounded by an administrative receiver, appointed specifically for those aircraft. Other secured lendors tried to take possession of their aircraft.
Tim Heyward from KPMG said:
'What is hoped for ....is that we will be able to sell the business as a going concern, and that the airline will be flying again in a very short order.' Within days this had been updated to;
'The airline's only assets, as far as we could see were the routes, take-off and landing slots and the actual organisation, which consisted of a strong Tour Operation with Intasun, Global, Lancaster and 18-30. Sadly, even in that instance, the offices were rented. Overseas transfers were carried out on hired coaches and resort reps either used shared, rented office space or worked from hotels. It became clear very quickly that the company had very little of its own.'
Air Europe advised holidaymakers abroad to carry on as usual with their holidays, and that they were working with other carriers to arrange to get them back home. Mr. Heyward was tasked in finding a buyer for ILG, he said:
'Obviously I was very disappointed, but I certainly gave it a good try. The tour business as one combined operation was over. There were still some small assets that could be sold, but the companies were all placed in liquidation over the next few weeks. There was some interest in Air Europe, and the Civil Aviation Authority (CAA) extended their operating license a further 24 hours. I believed that any would be buyer could arrange for more favourable leasing terms on the 34 aircraft that Air Europe leased. If a buyer bought the carrier, they could sell the three aircraft that Air Europe owned or keep them. Once the Tour Operators were placed in liquidation they could be snapped up quite quickly. The value would drop significantly. There was a specialist school holiday company ILG owned called Quest Leisure Group, and there was a lot of interest in that, within a day of its liquidation talks were at an advance stage. Talks ultimately failed and Quest was closed down. We almost had a buyer for Air Europe and the press picked it up. I became less confident of an eleventh hour rescue. There was a lot of interest in Club 18-30 as well. I was shocked at how ruthless and swift the travel industry can be. ILG stopped flying on the Friday and Dan-Air had a special licence from the CAA to operate the Gatwick-Brussels service the next day. They were after eight of Air Europe's Gatwick flights.'
Quest Leisure had three Tour Operators, Hourmont Tours, Schools Abroad and School Plan. They had a market share of school holidays of approximately 33% and carried 75,000 school children and teachers on holidays. Days after the collapse talks to buy it failed and administrators closed the operation. It was revealed that Intasun had debts overseas of £5.5 million in Spain alone, for coaches, hotels and other firms.
One air steward, called Danny told us:
'Oh the irony. Loads of us were on days off and standby, and then the phones rang saying to report for duty. Air Europe had gone bust and their staff were calling us to charter us to bring them home! I have to say, I had a spring in my step. Not at them losing their jobs - but at me keeping mine! There had been a heavy cloud over us for months, we knew what ILG were doing, they were out to destroy our company. One thing I had always felt at Dan-Air was a sense of family. We were a nice company, and I don't think ILG were the same. We never set about destroying another company to get what we wanted. A company isn't just a workplace. It is people who had rents and bills. Business shouldn't be so hard, and in a way, that lot at the top of their organisation got what they deserved. The saddest part was that their staff probably felt the same about ILG as we did about Dans. They were people too.'
Another stewardess called Helen said;
'I had been successful getting taken on at Dan-Air in 1990, and I was certain that we were going under. I knew a girl called Zena (Not her real name) at Air Europe and, although she usually said 'I'm only joking' afterwards, she would say 'You should come over to Air Europe, because Dan-Dare won't be around next year. I hated then - and now - that Dan Dare thing, it is insulting. Even when used as a term of endearment - it makes me angry. She said things 'in jest' about our aircraft being clapped out old bangers. She even said to a group of friends once that 'after the safety demo Helen goes and sits next to the rear gunner on her aircraft'. I hadn't heard the Dan Dare tag until I started with them. I had been on lots of holidays, but actually never with Dan-Air. When I started working on them, I swear, I didn't see anything different about our aircraft than anyone else's that I had been on. I don't recall a single thing that made me think we were dodgy. On the day that it happened I had a phone call from Zena and she was in tears. She actually asked me if there were any jobs at Dan-Air! I joked and said 'Are you sure we would be good enough for you?' - I was a great feeling knowing that we were, for the time being at least, safe in our jobs. Zena, by the way, applied for Dan-Air and was rejected. I don't know if it was because she failed at something, or because she was from Air Europe!'
One Dan-Air Captain said:
'Everyone in the industry was aware that in 1992 de-regulation would become a reality. We would be in a reasonable place with all the cities that we operated to already. What Air Europe was doing was insane. They had lots of opportunities to apply to fly from any UK airport to any overseas airport and yet time and time again they chose to go head to head with us. Gatwick-Geneva was a superb route with high loads as was Vienna. So Air Europe, who were aware we were on it, instead of doing Birmingham-Geneva, went straight for the Gatwick option. That was only going to hurt us and be hard work for them. Birmingham was a good option, we had proved it with Manchester-Geneva. But no - they had to do it their way. They had brochures made up that kept on saying stuff on the lines of 'Other airlines don't have what we have'. We will never know if it was their strategy or if others were pulling strings. But it has a profound psychological effect on you when you are trying to work and pay your bills. We were all too well of our weakness, and to ensure that I could pay our mortgages, I looked elsewhere for a job. But I didn't want to leave Dan-Air. I knew several of Air Europe's flight deck crew, some great people, who had been with Dan-Air before joining Air Europe. That company had engendered an aloof atmosphere in some of them. Air Europe had taken risks that our management would never have taken, and I don't believe that we would ever have been so active in trashing another airline as they were.'
On the back of the news of ILG's failure Davies & Newman shares rose to 140 pence. Davies and Newman Chairman David Jones said: 'The Gulf was has certainly caused serious problems for the travel industry, I am confident that Dan-Air has weathered the storm. We shall now continue the development of our future strategy, which will include the expansion of our scheduled services as well as maintaining our substantial charter operation. The loss of Air Europe, though itself regrettable, will create some vacancies at Dan-Air.'
Analysts were now saying that Dan-Air would make capital from the crash of Air Europe. As well as ILG holidays and other Tour Operators had seats booked on Air Europe planes. Owners Abroad said they had about 1000 passengers abroad who had travelled on Falcon Holidays, Sunmed and Sovereign Holidays. They would be flown home with other carriers including Dan-Air. Travel agent Thomas Cook said any passengers booked on Intasun or Air Europe would be offered an alternative or a full refund. The crash of ILG sent shudders throughout the industry. Optimism after the Gulf War had ended so quickly - now evaporated at the thought that it was not just the small Tour Operators who were at risk of closure.
The Association of British Travel Agents (ABTA) said that they had £63 million in insurance bonds from ILG and that none of the package holiday-makers would be out of pocket. However those booked on scheduled flights would need to contact their travel agent. The sell off began immediately, with the sale of the 49% ILG had in German airline NFD being sold for an undisclosed sum.
Charles Newbould, the Managing Director of Thomson, the UK's largest Tour Operator said: 'As far as I am concerned Intasun and its companies are a dead duck. There is no salvation' - with another saying; 'Intasun is dead, as soon as customers get a whiff of trouble, the credibility goes.'
The loss of ILG was a lifeline to some of the smaller Tour Operators, but Thomson were set to gain substantially in total ILG had three and a half million holidays that would now be up for grabs. Many small firms had been close to bankruptcy themselves. Michael Croft, one of this site's contributors told us:
'There was just not enough business to keep them all going. The winter's lethal combination of recession, high interest rates and the war in the Gulf decimated demand. More than 600,000 in January alone were cancelled. I checked my diaries and I had written that Thomson had more than a million holidays unsold and were selling cheap seats on Britannia Airways to any competitor who cared to ask. Scheduled flights had suffered because people were fearful of a terrorist attack on their flight. I just hoped that Dan-Air would gain from the demise of ILG.'
Meanwhile it was claimed that the Government had stopped the CAA from shutting the company down the day before because it would cause embarrassing questions being asked in the Transport debate in the House of Commons. The CAA had been ready to remove licences it was claimed. A rival Tour Operator stated that 'Harry Goodman flew too close to the Intasun'. It was disclosed that 25,000 people were away on holiday and the process of bringing them all home would be a monumental task.
Goodman's deals had looked good on paper, but accumulating his relatively modern fleet over a short period from 1978 saw him incur large debts. Accountants would now have to pore over the books to find out what assets the company really did have, against liabilities of £480 million. The industry as a whole agreed that the ILG's loss, which accounted for 16% of the UK package tour business, would mean that demand may well outstrip supply in the coming summer. As prices were fixed in advance, it was unlikely that there would be increases to holiday prices, but also highly unlikely that there would be any wide spread discounting either. Tory MP Kenneth Warren of the all party Trade and Industry select committee carpeted the CAA, saying:
'The CAA is duty bound by law to have full information as to the financial viability of an airline. I think passengers who have lost their money have cause to find out if they can sue the CAA for neglecting their duty.' It was announced on Monday 11th March that ABTA had cancelled Air Europe's membership to the organisation. The Department of Transport revealed that the Secretary of State for Transport did have meetings with Air Europe, the most recent being days before the crash. 'He was told by the company of the difficulties it was facing, and we were kept informed.'
Webmaster Note* With accusations that the CAA and Government acted improperly being flung around, and responses about the silence about Air Europe being explained as protecting the company from collapse while rescue negotiations were underway, it seems incredible that Dan-Air were not given this same level of discretion. For well over a year, almost every detail of their own on-going financial struggles had been reported extensively in the press. Dan-Air's troubles were far less than those of ILG. It surely put pressure on the company to perform well in public. Confidence would have been very low with the travelling public, who would be fearful of Dan-Air going under. The whole organisation deserves credit for carrying on under this extreme scrutiny.
Within hours of the collapse becomming public knowledge, Dan-Air had applied for several of the routes that Air Europe had hitherto operated. David Lammy MP, chairman of the Labour Party's aviation sub committee said 'I blame organisations like the CAA for not putting restrictions on companies like Air Europe getting a license.' The Transport Secretary, Malcolm Rifkind was blasted in the media for not revealing he knew of Air Europe's troubles for two weeks. It is difficult to say whether he had made the right call. Had he revealed all he knew, he could have made the situation worse, with passengers and holiday-makers all rushing to cancel their holidays and flights.
Days before the collapse Harry Goodman, had checked himself into a £300 a night private hospital, saying he was suffering from delayed shock after a car crash a month previously. Then, after ILG went under, Goodman said:
'It's not a good day, it's a shame we can't take people on their holidays, but their money will be safe. The recession hit us harder than some. It all cost us more than £70 million.'
Dan-Air could also take a breath. Those 'old, gas guzzling' jets that ILG did not want to charter anymore, from an airline they wanted to consign to the history books, had helped save the day. Many of them were owned outright, and whilst they did not have the value or efficiency of Air Europe's aircraft, there is no value in a rented anything! Dan-Air had spare parts worth millions, offices and real estate, a small tour operation, a 50% share in Gatwick handling, cash from the sale of Dan-Air Engineering and a rescue package from the bank. The next day Davies and Newman shares climbed 29 pence to 178 pence per share.
The decision to replace Dan-Air board members with people from none aviation sources was a great risk. People watched with interest and worry as new board members took their places. Board members who lost their seats included Danny Bernstein, who left Dan-Air to become Managing Director of Monarch Airlines. His great skill in the industry saw Monarch go from strength to strength and become one of the most successful UK airlines in the nineties. Also, Graham Hutchinson who was acknowledged as a supreme airline manager, respected the all over the World. How could anyone take such a risk in removing these two people? Only three people on the new board had a background in aviation. Michael Newman, John Mayes and Peter Sommers. The new Davies and Newman Chairman himself, David James, was an accountant by profession and had been trained by Lloyds. James had saved companies from going under in the past, none of them were airlines. How could he be expected to know about this kind of industry? Others to come with James were Peter Ryan, a chartered engineer and Charles White, an engineer.
The new strategy, moving Dan-Air forward was to be a five featured plan; To concentrate on Dan-Air's operation and development as an independent airline - To develop the airline as a specialist, short-haul, scheduled service provider within Europe and the UK, based at the Gatwick hub - To maintain subsidiary scheduled services, spoke centre based at Newcastle Manchester and Berlin - Progressively modernise the fleet of aircraft - and to continue a strong presence within the charter market, albeit with a reduced, but more flexible capacity than before.
David James said;
"Dan-Air needs a substantial injection of new funds." and "This might entail a 'rights' offer to shareholders" James continued, 'Significant new equity investors, would benefit in the enhancement of the overall corporate entity!" The other option was for Dan-Air to be sold as a going concern,' adding that 'No talks were taking place, but past expressions of interest might recur once market conditions began to improve.' The final option was to merge with a similar airline, stating 'Again this might require the approval of shareholders or new investors with additional funding.'
David James in 1991
James announced that "Dan Air's strategic advantages were its 11 domestic and 36 European routes - but flights to some of these would have to be curtailed to save fuel and maximise payloads. Partly to offset the five fold increase in fuel costs and the Gulf War." Group losses were £30.4 million from £18.7 million in the first half of last year. This figure included £5 million in 'exceptional costs' to pay for 'special fees' to the banks for their lending lifeline, relocation of head office and 'professional fees' in forming the group's future strategy. In other words - bank charges and fees for management.
Just five days after the collapse of ILG it was announced that administrators had failed to find a buyer for the Tour Operator section of ILG, as they had not been able to sell it as one business. In total 800 UK and 750 overseas jobs would be lost. Resort representatives were flown home and dismissed. Talks would continue to find a rescuer for Air Europe with a deadline placed of seven days. Citibank had made many loans to Air Europe's parent company ILG on the security of their aircraft, and on March 7th 1991 they demanded that ILG had 24 hours to find new financing. Or they would call in all their loans. Lloyds Bank meanwhile, who had been surprisingly negative to Dan-Air, and had made the restrictions they placed on Dan-Air so wide ranging, were now trying to keep ILG afloat! This policy was understandable from Lloyds point of view. They were the Bank who ILG's owed the majority of their debts to, estimated at £100 million. So misguided were Lloyds by ILG that they had attempted to persuade ILG to take over Davies and Newman as part of the D & N rescue package. As if they were in a position to spend money! Over the previous three months alone, ILG had suffered losses approaching £50 million.
Tim Hayward from KPMG again:
'ILG's liabilities looked at being about £400 million, the whole organisation had assets that were likely to raise no more than £10 million. It was clear that the company was insolvent and had to be liquidated. The situation was quite bleak. It would be a long time before any dividend could be paid to any creditors. Sorting out the creditors was a lengthy and expensive task. The best that creditors were looking at was 2p in the pound.'
All was not lost. The brand Club 18-30 was taken over as a management buy-out backed by venture capitalists County NatWest Ventures, Grosvenor Capital and Causeway Capital, in a transaction valued at £167,000. After being briefly re-branded as 'The Club' due to regulatory rules precluding the use of the name for 3 years, it reverted to the original name in 1994. In 1995, the company was sold for around £9.75 million.
Anne Wilson of the insolvency Service told us:
'The problem with any company that goes into liquidation owing money is that all of those owed money get their money back - or no-one does. There was never an option to pay for example, for fuel, rent and not pay landing fees that would be unfair to decide whom to pay. There are primary creditors and secondary creditors. Taxes for instance would be first over rent on an office. Sadly, the receivers get their money and basically no-one else does.'
Time was running out for ILG. The extended licence the CAA had given them was about to expire. Tim Hayward from KPMG said;
'Selling the whole firm is looking less likely. We are now looking at splitting it up into a number of smaller companies, several other airlines and tour companies have expressed an interest. Time is not on our side and we only have a matter of days left.'
Captain Alan Selby told us:
'What a sorry mess. What was there to buy? There wasn't really an airline - as it was, it was a carrier with a number of leased aircraft, they didn't own hangar space or office space that wasn't rented. We had already applied for their scheduled services - for free! We could obtain aircraft ourselves on our terms. The only value of the airline was landing and take-off slots and their reputation, which was good, I admit. But that had taken a knock in the last week or so. So, you would be buying a Tour Operator who's name was now firmly in the mud. Let's face it Intasun and Global had a pretty rotten reputation in the first place. ILG boasted about Air Europe all the time. Then when they chartered our aircraft they were providing minimal catering for Intasun passengers. It was a step up from Airtours - but not much! It is no wonder no-one wanted to buy it.'
Air Europe and ILG's collapse in March left significant gaps in the travel market. Companies that had booked seats or whole aircraft from Air Europe would be looking for a replacement carrier. Dan-Air was ideally placed to swallow up not only this available business, but also many of the bankrupt airline's scheduled routes. It would mean that from now Dan-Air's Gatwick-Paris service would not face any competition. All of this could have been the saving of Dan-Air. It is widely believed today, that had they done this, the airline would have gone into profit again that year, but the board chose not to do this. They had already announced that they wanted to primarily be a scheduled services airline. In fact - instead of taking on all this available new work, the new board actually reduced the charter and IT work that year. Despite claiming that now they had refinanced the airline and that they were in a position to 'take advantage of market opportunities.'
Thomson Holidays alone added 300,000 extra holiday seats to their programme, in the same month that ILG went bust. Britannia Airways had planned to sell off aircraft and now said:
'We have gone from a situation where we faced a slump to one where we are having to increase dramatically.' ABTA announced that 95% of people who had booked a holiday with an ILG firm had now re-booked with other firms. Dan-Air had applied for ten of Air Europe's routes, with Brussels already operating under a special licence.
Holiday Which magazine declared that British Midland were the best domestic airline, with Dan-Air declared the worst. It was not clear whether the people who had carried out the survey had actually flown with Dan-Air on scheduled services as Air 2000 was on the list - and that carrier did not operate a single domestic service. Dan-Air were not happy with the survey's findings, and blamed cheapskate Tour Operators for their poor showing. Which had claimed the airline had hundreds of 'never again' responses and had slammed the airline for poor in-flight catering and service. But Dan-Air said the faults lay at the door of the holiday company arranging the package tour.
'Most of the complaints were about charter flights, which means they were probably things beyond our control.' said Peter Clegg of Dan-Air. 'We offer the Tour Operators who charter our 'planes a wide range of services and they choose the standard and quality dependent on the price they want. Many of our clients opt for the lowest in order to keep the overall cost of the holiday package down - that is up to them. Fortunately the complaints do not seem to be about the quality of service on our scheduled services, which we are very proud of. Last year we won the award for the best stewardess and the best cup of tea, and we are mystified about this apparent fall from grace. We are rather baffled because we feel the quality of our scheduled service, particularly in Class Elite are exceptionally good. Unfortunately people tend to write into Which with grumbles rather than praise.'
The Gatwick-Amsterdam service was launched on March 13th to celebrate the launch New Horizons Travel joined forces with Dan-Air and offered a three night break in the city including flights and hotel for just £125 in March. The same day applications were submitted to operate from Gatwick to Rome, Copenhagen, Gibraltar, Stockholm, Malta, Brussels, Dusseldorf, Barcelona, Oslo and Palma. Vic Sheppard, Dan-Air's Scheduled Services Director said:
'We are asking the Civil Aviation Authority to waive the lengthy licencing procedure to enable us to start flights with as little a break as possible. We are able to start the Brussels service within a few hours of the CAA giving the go-ahead. We are urging them to give a specific exemption in view of the substantial demand for the service from Gatwick.'
Administrators for Air Europe and ILG, KPMG Peat Marwick McLintock announced on March 14th that they had been unable to find a purchaser for any of the ILG's group of companies with the exception of Club 18-30. The tour company employees totalling 1750 people were dismissed. Of those, 750 were based overseas and would be flown home. The 800 UK based staff were let go whilst talks to save the airline and its 2,000 staff would continue. Tim Hayward of KPMG Peat Marwick McLintock said : 'Obviously we are disappointed, but we have certainly given it a good try. The tour business as one combined operation is over. There as still some assets that might be sold, but the companies will be placed in liquidation in the course of the next few weeks. '
There had been interest in buying Air Europe and the CAA extended the licence deadline until March 19th. Meanwhile Dan-Air began operating flights to Brussels within 12 hours of the CAA giving them the licence . On March 15th Tim Hayward said 'Talks are still ongoing with a number of other airlines and tour companies who have expressed an interest in acquiring Air Europe I remain hopeful that a going concern sale can be effected. The collapse of the ILG had damaged the business to the extent to which it is not possible to sell the tour group as a whole. We are clearly disappointed the companies will be placed into liquidation.'
A Gatwick Airport spokesman said that there was bound to be a short-term loss at the airport, but that in a short time he believed the effect would be 'broadly neutral' - 'Past experience has shown that the failure of an airline does not affect demands for air travel. Traffic will be picked up by other carriers. The collapse of Laker did not affect growth at Gatwick.'
Air Europe's less profitable routes were unlikely to be snapped up immediately by cost watching rivals, but the press were quick to call other airlines 'scavengers' who were keen to pick up the juiciest morsels. Jersey European Airways won a temporary license to operate the Gatwick-Jersey service. The collapsed Air Europe Express manager Brad Burgess announced the formation of a new company - Euroworld, and applied for routes from Gatwick to Birmingham, Guernsey, Antwerp and Rotterdam.
Dan-Air now declared that they had been watching the demise of Air Europe for a considerable time. Said Director of Scheduled Services Vic Sheppard: 'We have had a contingency plan ready for some weeks, and indeed, as far as Brussels was concerned, we had an aircraft and crew already standing by to start the service. We are urging the CAA to allow us to start the flights on April 1st.'
On March 14th further applications were placed to serve Istanbul, Cairo and Athens from Gatwick
Dan-Air carried out a further 62 rescue flights over the next few days, repatriating ILG holiday-makers which was funded by the £63.2 million bond scheme that ILG had paid into the Tour Operator Study Group (TOSG) by way of an insurance policy. The TOSG said: 'There would be additional flights laid on the next weekend to bring back the 12,000 or so holiday-makers who were still at their resorts. The majority of them are in Southern Spain, Malta and Europe's ski resorts. TOSG has also ensured that ILG travel company representatives, hotels, coach holidays and other suppliers will honour the holidays of those people currently away.'
Lufthansa publicly declared that they were interested in buying Air Europe but Dan-Air, who had been rumoured to be discussing a merger with Air Europe, now distanced themselves from the company saying: 'We have applied for ten of the former airline's routes. We would not be interested in buying an airline for the sake of buying an airline. We have a perfectly good management structure of our own and we wouldn't want to repeat any of the former carriers mistakes.'
Jill Clunas and Sharon Orban were interviewed about life as an Air Stewardess after a company Boeing 727 was used as a set on a TV documentary - Suburbs in the Sky - They said that anyone who called them 'trolley dollies' should try doing thier job. 'Knowing a foreign language and having a good personality are the most important factors.' said Sharon. 'I could never imagine the reality of being a stewardess. It's a fantastic job and I could never go back to doing a nine to five job.' Jill had been working with Dan-Air for four years and was ranked senior. 'I was so naive about the safety of the job.' She says 'A lot of people think you are just there to serve the meals, but there is much more to it. Much of the safety equipment is concealed and we have always got to be thinking ahead. It is certainly not a glamorous job'
The girls had to complete a four week intensive training course covering safety and first-aid. 'Some people do not appreciate the range of qualifications we have.' Said Sharon 'We deal with everything from nursing a sick passenger to looking after a nervous person who has never flown before.'
Both girls said the Gulf War had made them more nervous about bomb threats, and were more aware of awkward parcels and luggage left behind in compartments and overhead lockers where items could be left behind. 'If it came to the stage where I was frightened to fly, then i would leave my job.' said Jill.
19th March, a new UK charter airline, Airtours International made its first departure from Manchester to Rhodes. The start up carrier baulked at being called the son of Air Europe. The parent company, Airtours said that they had increased capacity to try to plug the gap left by Intasun. Airtours was the third largest Tour Operator in the UK and were set to take 750,000 people on holiday. The increase in bookings might take them over the one million mark, they said at a press conference.
'Airtours has ordered five MD 83 aircraft and would base them at head office Manchester and Birmingham.' Airtours had been a regular client of Dan-Air's for many years. The company wanted to stress that they were not 'the son of Intasun' and that they believed that Thomsons believed they didn't have any competition. Airtours said 'We will give them a run for their money.'
One of our contributors says:
'It was a familiar story over the last few years. We would just about get over a Tour Operator who did big business with us setting up an airline, and then another came along and the pattern repeated itself. Right back to the days of Air Europe starting. They would always start with just two aircraft....Then the Tour Operator would get bigger and for a while things would be good at Dan-Air because their two aircraft couldn't fly all their business. Within a year or two the new airline would have half a dozen aircraft and they wouldn't want to charter Dan-Air aircraft anymore. That was the case until they went bust!'
Later in the year a new Tour Operator sprung up - Sunworld. It had been born out of the ashes of ILG. Dubbed as the 'Child of Intasun' - the company was formed by Iberotours of Spain By late Summer they had launched and carried a few thousand passengers. They said they would be launching a full package for the Summer of 1992. They would sell 360,000 holidays and would be using Dan-Air as their main charter airline. The irony of this is that Sunworld's managing director was the former Manager of Intasun, Peter Long.
Another of our contributors said
'All the discrediting ILG had done to Dan-Air, all the attempts to finish us - came from a company that grew too fast and were in debt up to their necks. Now, this new company was being formed, chartering Dan-Air aircraft!! You could not make the story up! Loads of people lost their holiday, or at least had it inconvenienced. Scheduled passengers who had paid by debit card lost money. All those people stuck in resort having to be repatriated. It stank! Then there were thousands of staff. Talented people, who had faith in their company, all out of a job. Some of the people working for Sunworld were previous contacts of ours. Sunworld were saying they were going to use us!
Sunworld advertised in the national press, and it is worth repeating the words on the adverts.
'YOU CAN BOOK A SUNWORLD HOLIDAY WITH COMPLETE CONFIDENCE. WE ARE PART OF AN EXPERIENCED TRAVEL GROUP WITH OVER SIXTY YEARS OF EXPERIENCE, A £200 MILLION TURNOVER AND TEN YEARS SUCCESSFUL TRADING IN THE UK. OUR AIM IS TO PROVIDE THE BEST HOLIDAYS AT THE BEST PRICES.... Just when you thought you might not get away to your favourite sun spot at this popular holiday time - Look again at SUNWORLD. '
Incidentally - the advert said 'We WON'T be beaten on price.'
Industry Observers noticed the lifeline thrown to Dan-Air from Sunworld. They suggested that the main reason Dan-Air had lost out on charter work was the lack of vertical integration with a Tour Operator. They urged Dan-Air to join forces with one or to start one of its own. Their advice was ignored. In a further twist, the new Dan-Air board had decided to concentrate on scheduled services AFTER the Air Europe/ILG collapse. Thomson holidays said that the crash had resulted in a 25% surge in bookings. Horizon's sales was up 30% and Airtours, who aimed at the cheaper end of the market had soared by 40%, which in real terms meant a million people would book an Airtours holiday. Airtours had decided to add three more aircraft to its fleet, it did so because it 'couldn't find any capacity with existing UK airlines'. The Airtours fleet now stood at eight aircraft. Could Dan-Air not have leased a similar aircraft? If Sunworld was able to produce a full holiday programme immediately after ILG had gone bust - could Dan-Air have not done the same with aircraft?
Airtours share price had rocketed to 795 pence. This enormous gap in the market seemed to be largely ignored by Dan-Air's management. They were hopeful that in 1992 they would break even. The following year have a profit of £20 million rising to £42 million by 1995.
The press could still not resist putting the boot into Dan-Air - The Engineering division which had been sold to FLS Aerospace, announced 400 redundancies in late March. The press reported that Dan-Air was in 'crisis again' and would be making the redundancies. The inaccuracies were left unchallenged.
A further special licence for Dan-Air to operate Air Europe's Gatwick-Amsterdam service was given. Daily scheduled flights from Gatwick to Gibraltar then commenced in June using Boeing 737 aircraft. The flights would operate two classes with Class Elite and economy cabins.
In April BBC TV's 'Money Programme' devoted an entire episode to the struggles facing Dan-Air. Captain Mike Ralph was interviewed on the programme and said: '
'Our aircraft are old....they were dirty...and the paint would be flaking off them. The ground equipment would be in a similar state....And....the image they projected wasn't a good one. We pressed the management to do something about this and we hope now that something will be done.''
He had said this whilst standing next to a gleaming BAC 1-11. His comments were not particularly helpful, nor particularly true. The sixteen Boeing 737 aircraft in the fleet were relatively new, in particular the 300 and 400 series models. Certainly of a comparable age to those in the Britannia Airways fleet. The BAe 146 fleet were brand new aircraft when introduced to the fleet, and they had been upgraded since their introduction. The fifteen strong BAC 1-11 fleet of varying models, were, it is true, older models. The type was the exact model to those in the British Airways fleet, as were the HS 748s. Only the seven Boeing 727s could be described as older, and they had already started to be phased out. The 727 was still in active service with Lufthansa, Air France, Alitalia, Iberia, TAP, Olympic and dozens of airlines outside of Europe.
The 727 aircraft were to be replaced by Boeing 737 and BAe146 aircraft. Even the older types were perfectly airworthy and maintained to an excellent standard. The 1-11s were profitable on scheduled services.
The Boeing 727, despite its excellent pedigree was a terrible burden for the airline and their replacement was vital. Whilst the legacy carriers could use them on scheduled services and make a profit especially in two class layouts. But as a charter aircraft the type had fundamental flaws.
One aviation enthusiast, Gareth Evans from Manchester contacted us to clarify points about aircraft age:
'Now I am retired, I have a lot more time on my hands. In the eighties I used to go spotting all over the place. Taking registrations. There was was a book I had called 'World Airline Fleets' it had the contemporary fleet of every carrier. You could tell if an aircraft was new, and it would list the registration it had prior if it was second-hand. Now, thanks to the internet, you can find the history of every aircraft thanks to websites like rzjets.net . I went with my old book and traced all of the aircraft I used to spot. Dan-Air had this reputation of having old aircraft. Let me tell you - those DC9 that BMA had were ancient! They were buying DC9s that were eighteen, nineteen years old. It was the same with their Viscounts. Air Anglia had some very very old F27s. They were all guilty of the same thing. British Caledonian until they got their DC 10 - the same. To Dan-Air's credit, the second-hand stuff they were getting were generally younger. Even the Comets were not old old when they got them. Certainly not in comparison to BMA's DC9s!! The stuff that Air Europe, Airtours and all those newcomers had made them look good. Anyone could have a fleet of two brand new 'planes - Dan-Air did that...It was when they were mixed in with older equipment. Monarch's A300s were brand new in 1990 - they weren't so brand new when they were flying them well into the 2010s! It's a fantastic website you have, and it's a great read - all this history!'
Peter Clegg who had been Dan-Air's Marketing Director for many years took early retirement from the airline to set up his own marketing firm - Clegg Marketing Consultancy - which would be based in Surrey. His firm would specialise in aviation and related business. Clegg, who had been with Dan-Air for eleven years and prior to that, British Caledonian for the same period launched a fund to build a memorial to pioneer pilot Ernst Fresson. he was immediately supported by the Highlands and Islands Airport Authority.
Details of an incident that took place over Sussex in June 1990 came to light in April of this year. A company BAC 1-11 was travelling from Belfast to Gatwick came within 150 feet of a British Airways Boeing 747. The two aircraft had 350 passengers on board. The BAC 1-11 managed to swerve out of the way just in time after the Boeing 747 plunged 1000 feet following an on-board computer failure. Only the skill of the Dan-Air pilot saved the lives of all on board. A Civil Aviation Authority report called it one of the most dangerous incidents of the past year - a potential disaster. It described how the on-board computer of the British Airways Boeing suddenly failed and the aircraft plummeted from 9,500 to 8,500 feet in seconds. The Boeing was heading to Heathrow and the Captain radioed saying 'We seem to have a major autopilot malfunction.' The Dan-Air pilot flying from Belfast to Gatwick said: 'The Jumbo suddenly filled the windscreen from left to right.' He was forced to swerve sharply to avoid the falling jet. Both aircraft landed safely.
Following the collapse of Air Europe,Manchester Airport had been bracing themselves for a weak Summer. This was avoided after Tour Operators were now in a position to add extra holidays to their programme. Britannia Airways would be carrying an extra 80,000 passengers from the airport. Inter European and extra 100,000, Air 2000 150,000 more and Airtours would be flying more than half of their additional 200,000 passengers on the newest airline Airtours International. Holiday traffic was up 3% on 1990's figure from May to October, with the only lose being Dan-Air who had previously flown the majority of Airtours' flights. Manchester Paul Connolan said that Manchester was 'pulling away' from Gatwick as the number one charter airport, offering more flights to more destinations. Airtours along with other firms had printed supplementary brochures for the thousands of new holidays being sold. There was good news from Manchester when they declared that they would get every penny back of the £1/4 million owed to them by Air Europe, thanks to a unique insurance policy that protected landing fees, parking fees and rents from check-in desks and offices.
There were bubble to Brussels when the The Gatwick-Brussels had opened in March. Yvonne Manuel and Lucy Mitchell the first two passengers who had booked Class Elite were given a bottle of Champagne each by David Mortimer, Dan-Air's UK Scheduled Services General Manager, when they took their flight in May. The licence had been hastily granted as there was no British airline operating the service. By May bookings had increased by 14%. The Gatwick-Paris service had seen an increase of 12% since Dan-Air became the sole airline on the route. Frequencies increased between Gatwick and Manchester, with the new service from Gatwick to Gibraltar performing exceptionally well. The Gatwick-Gibraltar application was approved on May 30th flights would commence on June 14th.
There was nothing to raise a glass of Champagne for when a Dan-Air Captain was caught trying to smuggle four child porn videos through Gatwick in May. Captain Nigel Cleverley was caught by customs officials as he arrived at Gatwick from Amsterdam. He was also carrying three pornographic magazines and more videos were found at his home. He pleaded guilty to the charges and was fined £1,000 at Croydon Crown Court. He was also ordered to pay £380 in costs. Cleverley of Pimlico was forced to resign from his job because of the case.
Pauline Kirkman was appointed as press and public relations manager in May. She had a solid aviation background, having worked in customer services, operations, sales and marketing and cabin services. She had worked in public relations in-house with Dan-Air as well as World Airways, the Gatwick Hilton Hotel and Air Europe.
Scheduled services at Newcaslte had grown in 1991, but charter flights were down in number. Dan-Air were due to increase the Newcastle-Gatwick service to three daily round trips. More than 450,000 people travelled to and from London with British Airways serving Heathrow and Dan-Air Gatwick, the latter had seen an increase of 14% in passenger numbers. The Newcastle-Amsterdam service had seen a 12% increase. There had been a 4% drop in charter flights. The shortfall caused by ILG's collapse amounted to 60,000, but other operators Airtours, Thomson and Aspro using Airtours International, Britannia and Inter European stepped in to fill the gap.
Airtours International announced that they would have their maintenance carried out by Dan-Air Engineering redundee FLS Engineering.
The Dan-Air football league and the Dan-Air Class Elite league played their final games in mid-May. The airline had sponsored the league which saw many teams across the region compete for the Class Elite Cup.
The application to operated scheduled services between Gatwick and Gibraltar was granted in May 30th. The daily flights would be operated by Boeing 737 aircraft. Flights would commence on June 14th. Vic Sheppard of Dan-Air said: 'We are delighted to have this opportunity to provide the extra capacity and the competition which this route needs to support the economic growth of Gibraltar. Scheduled services account for about 95% of the total passenger traffic. Gibraltar is also the most convenient access for the leisure travellers to the Costa Del Sol.'
Dan-Air had saved almost a hundred airline workers from the dole queue, when 78 flight and ground crew were taken on by Dan-Air to operate the Gibraltar flights, which was one of the busiest routes in Air Europe's network. A Dan-Air spokesman said that they were hopeful they would be successful with many more former services. If so, he told the press, there would be more jobs available to grounded Air Europe staff. 'We operate the same Boeing 737 types that Air Europe used and those people who are trained on the type would be most welcomed. They would have to re-train to meet the standards of our in-flight service, but that would be routine. Flight deck crews would need to be assessed before they were taken on, but once again, we cannot see any difficulties. Gibraltar was the first fully licensed route we took over from them. We are operating a special licence on the Amsterdam and Brussels services. None of the many other routes we have applied for have been approved yet, and we haven't even been given a date for a hearing, so it could be some time. Obviously we have to await the granting of the licences, but if we get them, then we will be able to absorb some of their former staff.'
Captain Dave Rix aboard a company Boeing 737 at Gibraltar (Picture: Alan Williams)
A skilful pilot steered his 150 passengers to safety when two of the Boeing 737's tyres burst upon landing at Gatwick on a flight from Naples on June 1st. On the same day another flight, this time on its way to Naples caused disruption at a different airport than the one it departed from - or was heading to when a company Boeing 737 jet closed an airport minutes after taking off from Manchester where it partly shredded a tyre. Debris had been found on the Manchester runway from the Dan-Air flight to Naples. Air traffic controllers notified the Captain who decided to divert to Gatwick. He flew near the control tower so a visual inspection could be made and was told the tyre was intact. He landed but at the end of the runway the nose tyre shredded. After the Captain brought the plane to a safe halt it was unable to be moved for an hour and the runway had to be closed. The 86 passengers continued their journey six hours later.
London Gatwick Airport had calculated that the loss of Air Europe's flight had lost the airport 4% in movements. The number was lower than expected because Dan-Air had already taken over some of Air Europe's scheduled service flights. Charter flights from Britannia, Airtours and Inter European had increase to plug the gap left by Air Europe charter flights. Airport directors said they did not expect any more airlines to leave Gatwick, as airlines had made their feelings about Heathrow quite clear.
A BAC 1-11 carrying 49 passengers had to return to Gatwick on June 12th. A full emergency was reported which saw fire crews on standby. The pilot of the Aberdeen bound plane reported possible hydraulic problems. A Dan-Air spokesman said: 'The measure was purely standard The plane safely without any complications and passengers were put another plane to allow engineers to investigate.'
Manchester Airport went on full emergency alert on June 17th when a chartered jet came to land with burst tyre. The BAC 1-11 carrying 118 passengers from Malaga touched down safely. The Captain thought both nose wheel tyres had burst when he took off from Spain and after radioing ahead airport fire teams were put on full alert. When he touched down he realised that one of the nose wheel tyres was undamaged and was able to make a near normal landing. Passengers were taken by bus to the terminal and the runway was closed for 10 minutes for the burst tyre to be changed Passengers on jets circling overhead applauded after hearing the Dan Air aircraft had landed safely.
A full license was granted for the Gatwick-Brussels service was granted on June 21st. Route was an immediate success for Dan-Air and in the three months the airline had been operating it on a temporary licence the service had gone from two to three return flights a day. Director of Scheduled Services Vic Sheppard said: 'With the importance of Brussels being the centre of EEC activity we increased frequencies as quickly as we could. We are delighted that our permanent licence has been approved so swiftly after winning approval to operate scheduled services to Amsterdam and Gibraltar. these decisions indicate the growing strength of our operation.'
The airline was also granted licences to fly to Malta, Athens, Gothenburg, Palma, Stockholm, Istanbul, Cairo, Rome and Oslo. Dan-Air said they would operate the flights as soon as they could, but that some of these services could not commence until 1992 as aircraft would need to be sourced to carry out the schedules. Crew would also need to be trained and bases established in overseas airports. Some routes already in the network would be cancelled as they were less successful. Under the axe were Amsterdam-Berlin and Manchester-Berlin via Gatwick. there would be a slashing in the number of Newcastle-Gatwick flights and Gothenburg would be dropped from the Manchester-Gothenburg-Oslo flights. the recession was blamed for fewer passengers being carried on those flights. Dan-Air's Director of Scheduled Services, Vic Sheppard said: 'We are maximising resources to meet market demand. We have examined some of our under-performing routes and taken the necessary steps to secure our long-term future. Since the reunification of Germany there has been a considerable toss to interline traffic because there are two national carriers able to serve Berlin-Amsterdam. It is no longer economic for Dan-Air to remain with limited service on a route with overcapacity.'
Captain Alan Selby told us:
'It was always a difficult game of chess finding aircraft to be able to carry out regular flights. On Paris flights the same aircraft would basically go backwards and forwards all day, the same thing had happened for years on the Inverness-Heathrow service. If the route is profitable, you don't mind having an aircraft dedicated to one service. Those routes that were obviously carrying poor load factors could not justify having an aircraft at their disposal when it could be used on a flight where it would be full. We didn't have the luxury of a never ending stream of available aircraft. They would have to be found and, we had started to obtain aircraft on long term lease. They couldn't be obtained overnight sadly. When you have been granted a licence for London-Brussels - you make damn sure you have the aircraft. The same thing applied to Gibraltar. I was increasingly excited about these new services. They needed to be operated by Boeing 737, the latest versions of them at that. Rome was another one that was essential. When it came to Cairo, Istanbul and Malta, yes they were important, but certain cities were crucial. I might not have agreed with everything David James was doing, but whoever was advising him and the board to prioritise these flights was right on the money. At this time, I felt we were heading in broadly the right direction.'
Ian Peddar and Captain John Mayes had been the only two pre David James board members to remain on the board. One of James' appointees, James Ryan left the board to take up the post of chairman with another company. On June 29th Company Chairman, David James summed up the previous year as: 'We survived'. James unveiled Davies and Newman losses of £38.7 million, largely due to poor performance of Dan-Air he said; 'Despite appalling difficulties including a deep recession and a war in the Gulf. Future profitability now depends on funding to support and develop the airline. We will be switching the bulk of our operations from charter to schedules to improve earnings. This combined with additional funding should put the airline back into profit in 1992.'
James ruled out job cuts saying that he was concentrating on funding in the city to fund re-organisation of the company and provide more scheduled services. Despite press rumours saying the airline had axed 2,000 jobs. A company spokesman said: 'This is quite untrue, we had sold our engineering division, and the reduction in workforce is simply because those employees are now working for another company. In fact we may be recruiting new staff for the eight extra routes we have applied for. We have started two routes already.'
Shetland oil related charters had now been reduced to a trickle and Shetland Council wished to mothball the airport at Scatsa. Dan-Air were the only airline using the airport on a contract with BP. The council said they would maintain the airport in such a way that it could open immediately if there was an exceptional incident such as an oil spill. The council said that Dan-Air could continue to operate from Sumburgh.
A holiday jet stowaway caused a high security row on June 15th when he boarded a Dan-Air Boeing 737 at Corfu and landed at Manchester. The man conned his way through security and boarded the aircraft without a boarding pass. The Foreign Secretary Douglas Hurd was notified and there would be an investigation into the matter with Greek authorities. The unemployed man from Cumbria was met at Manchester Airport and detained by police. Bury South MP David Sumberg said 'Manchester Airport spends vast amounts of money on security, but this money is down the drain if airports abroad such as Corfu do not match Ringway's level of care. I want a complete review of security at Corfu.'
The stowaway told police he arrived in Greece from Australia and met a group of ten youths while there on holiday. They helped him trick his way through security at Corfu by pretending to have the tickets and boarding cards. Cabin crew carried out a head count and discovered one more passenger than there should have been, but airport handling agents said they could not have made the mistake - then the plane took off. The Captain then made a personal check and the stowaway was revealed. The pilot radioed ahead and the police then detained the man who had been drinking heavily before he boarded the aircraft. Dan-Air said; 'We are taking the matter very seriously. There will be a full investigation to discover exactly what happened.'
Just a few days later on June 29th Captain John Wolff, who was in charge of the aircraft was found dead in his car. The engine was running and a pipe was fixed from the exhaust into the car's cabin. Only hours before Dan-Air had moved a step closer to bringing Captain Wolff's troubled 20 year career to an end. An airline spokesman said: 'Captain Wolff had received a series of several verbal and written warnings for a range of offences before the stowaway incident. Captain Wolff had received his final written warning not long before he was found dead in his car. He was aware that any further trouble would have led to his dismissal.' Captain Wolff had failed to remove 21 year old Colin Fox from the Corfu flight. Wolff had disregarded airline rules which had been strengthened in the wake of the Lockerbie bombing. Eager not to delay the flight, the 50 year old ex-RAF fighter pilot then took off and failed to report the extra passenger.
Dan-Air did not wish to prosecute the stowaway, saying nothing would be achieved from doing so. Fox, in a bid to avoid being seen by the press climbed over a six foot police wall to avoid being seen after he was cautioned. At the inquest into his death in November, his wife said that she didn't know that her ex-husband whom she had left five year previously had been in trouble with bosses. She knew, she said, that he didn't particularly like or get on with management at Dan-Air. A verdict of suicide was recorded in October after it was revealed that Wolff had died of carbon monoxide poisoning. He had also drunk one and a half times the legal limit. He had received a letter, dismissing him from his £45,000 a year job just 24 hours before he killed himself. He left three children.
Two baggage handlers at Gatwick Airport were caught red-handed pilfering baggage from an aircraft hold for cash. The pair appeared at Crawley court in July. The loader and his supervisor were caught following a series of traps laid down by police. Geoffrey Franks and Ronald Brindley pleaded guilty to stealing £170 from a suitcase that had been planted by cops. Jennifer Crockford, prosecuting, said the men worked for Gatwick Handling and in the six months prior to being nicked, both Aer Lingus and Dan-Air had made numerous complaints about thefts, most of them being about alleged stolen cash. Including one man on his way to Madrid who saw £250 go missing from his holdall on a flight to Madrid. Mrs. Crockford said the men were responsible for going through passengers luggage and removing cash. The two men were nabbed when a police officer checked-in luggage that contained specially marked notes. the police man watched the baggage be loaded by the two men and confronted them afterwards. At first both men denied taking any of the money, but when confronted with evidence in the form of marked cash, they confessed. Brindley, a supervisor admitted taking £170 from the bag and handing £50 over to Franks who had been keeping watch. Franks made a full confession when told about the marked cash. He asked for eight other offences of stealing or intent to steal to be taken into consideration.
Passengers returning to Newcastle after a holiday to Portugal were furious after the aircraft was diverted to Manchester. The jet landed just before midnight and passengers then waited two hours until a fleet of Manchester City council double decker buses turned up and ferried them to Newcastle, where they arrived at dawn. Sixteen of the passengers had refused to disembark the aircraft at Manchester, until their sit-it saw crew alert the police. The sixteen then joined their fellow travellers on the laid on buses. One passenger claimed Dan-Air had a total disregard for their comfort. They had been dropped off at Newcastle Airport after a three hour journey without a stop. She then claimed there was no-one at the airport to help and didn't get home until 10 am. Alice Graham said: 'We were just fastening our seat belts preparing to land at Newcastle when we were told that the 'plane was heading toward Manchester. So that our 'plane could take other people to Rhodes because their aircraft had technical issues.'
A Dan-Air spokesman confirmed that the aircraft had been diverted to Manchester because of a mechanical fault on an aircraft had delayed the flight to Rhodes. He said that by not diverting there would have been more problems as the delays had a knock-on effect on other flights. When asked about compensation, the spokesman said: 'That depends on what sort of inconvenience they have suffered. All I can suggest is that they write in to us.'
On August 3rd travellers from Newcastle to Faro in Portugal were diverted to Gatwick after the First Officer became ill. The Boeing 727 with 100 passengers on board departed from Newcastle just after 5pm on the Saturday evening. After the aircraft had reached cruising altitude and passing over France the co-pilot complained of stomach pains and was running a high temperature. Fortunately there was a doctor on board who declared that the pilot should not continue the flight. A spokesman said: 'The First Officer got out of his own seat and was stretchered into the airport. He was taken to hospital and diagnosed with a viral infection. He stayed at the hospital overnight as a precaution.'
On August 19th crews at a Newcastle Airport went on full alert after a plane carrying 170 passengers developed undercarriage problems shortly after take-off. The full-scale operation was launched at about 2.30 pm when the eight-strong crew of the Dan Air Boeing 727 holiday charter flight, which was travelling from Newcastle Airport to Larnaca in Cyprus, reported the fault. Thirteen ambulances and the airport’s own rescue tenders and ambulances stood by for 20 minutes as experts decided whether to recall the plane, which had apparently burst a tyre on take-off. The flight was eventually diverted to Gatwick Airport. where it circled the South-East to allow ground engineers to inspect the damage before allowing it to land. The passengers were transferred to a waiting Boeing 727 to complete their journey.
August saw the completion of a twelve month crackdown by airlines to prevent tipsy travellers giving pilots and cabin crews difficulties. Charter airlines had suffered years of loutish behaviour mainly from young men. One drunk had been ordered to pay a £1,400 fine by courts. The strongest action this year taken on group of from the Midlands when Monarch refused to bring them home from the Greek island of Kos. They had allegedly abused staff and upset other passengers on their flight from Birmingham Because these incidents were passed on to all other carriers no charter airline would honour their tickets and man had pay fly on a scheduled service from Athens. A spokesman for Dan-Air said: 'There has real improvement in the standard of behaviour. We have far refused to carry five passengers this summer and this time last year the figure well over twice that amount.' Our staff have been trained on the ground and in the air on how to spot and cope with potential drunken passengers, and we would simply refuse to serve anyone with drink who appeared to be drunk.'
Flights were to be improved from September 24th. Gatwick would from then on be providing day-return facilities for services to Amsterdam and better timings to Gatwick from both Newcastle and Tees side Airports.
Air Europe's creditors were to be given just 2 pence in the pound and getting that could take years it was claimed. At the winding up of ILG it was revealed that the whole organisation had assets of just £10 million. Fallen Tycoon Harry Goodman was claimed to have a private wealth of £26 million would not have to pay anything from his own pocket. This meant he would keep his mansion in Maidenhead, and Lugano and would still have access to his private jet. He had recently attended a charity event where he handed over a cheque for £100,000 to a children's charity, saying: 'That was from my own pocket, nothing to do with my business.' When asked about the ILG failure he said: 'They say we expanded too quickly, and they might have been right. It seems that every airline that has gone for quick growth came a cropper, but we were not like Laker of even British Caledonian. I still think it was because of the Gulf War and the recession. Air travel number just dropped through the floor. Those dinosaurs who run legacy carriers will say things, but the real reason they hated my competition was all about money.'
But former staff seethed, one former Air Europe pilot said: 'When we learned that we had gone bust with £400 million in debts and only £10 million in the kitty, the atmosphere went very dark. Directors started to ask questions, and they weren't given the answers that people wanted to hear - it was a travesty.'
Goodman denied the company had liabilities of £480 million and said he was nowhere near as rich as he used to be, an had lost between £20 million and £25 million of his personal fortune. He said the Gulf war had cost the airline £65 million. When asked about ILG's crash he said: 'It was the saddest day of my life. I'm desperately sorry for those who lost their jobs or had their holiday plans disrupted. Everything that was humanly possible had been done to save ILG.'
Most of the pilots who had lost their jobs after the ILG failure in March had found employment by August, of the 453 pilots 250 had found a job with another airline with 71 of them joining Dan-Air. Goodman was now acting as an adviser to Tour Operator - Riva.
In August a new airline applied to operate a number of flights from the UK to Europe and Israel. Crawford Aviation was headed by.......Harry Goodman. Objectors had 21 days in which to oppose the launch. The Civil Aviation Authority said they 'were ready and waiting for them' saying: 'If there are objectors, and I am sure there will be, there will be a public hearing. After that we will make our decision. We would have to be completely convinced that the company is adequately financed and is being run by people capable of running an efficient service.' The head of Euroworld, which was staffed by many former ILG staff wished him well in his endeavours. However, Britannia Airways and Air 2000 did not share the sentiment and immediately submitted an objection, along with nine members of the public. Goodman had no financial investment in the embryonic airline, but was acting as an adviser and was helping get financial backing for the company. Britannia's spokesman said: 'Our objection is not about Harry Goodman personally. It is about how easy it had become to start a charter airline these days. We have seen a number of these airlines fail with considerable inconvenience for passengers,'
Davies and Newman plunged further into the red on October 1st. The half-year losses had increased from £187 million to £304 million and the company, headed by new chairman and company doctor David James announced he was to raise £493 million through a placing of 10750000 new ordinary shares at 50 pence. There was to be no interim dividend. James said he needed the cash to continue the strategy which would enable the company to return to 'significant profitability'. He said: 'In the past twelve months the company's prospects have, in many ways, improved considerably despite the continuing recession and the serious impact of the Gulf War on aviation and tourism. Management changes had been accompanied by a detailed reappraisal of strategy. There had already been substantial benefits in cash control. The has been a reduction of excess charter capacity and the elimination of uneconomic scheduled routes.' James said.
Thomson Holidays announced that thousands of holidays in their 1991 summer programme had been reduced to half price in the intervening months since the ILG collapse. Thomson said Tour Operators had jumped in too quickly in offering extra holidays to make up for the shortfall of ILG. Now they said they were determined to maintain their 33% share of the market 'at all costs'. Thomson said that other companies had 'jacked up' the amount of holidays they were selling and were now in panic, selling them off. Charles Newbold of Thomson said: 'Holidays are like a punnet of strawberries. In the morning they are all fresh and they get the best price, as they are then sold off cheaper as the day goes on.' He candidly revealed that package holidays usually only made £4 in profit for each one sold. It had been predicted that after the April general election, there would be a rush to travel overseas. This hasn't materialised and thousands of holidays were left unsold on Travel Agent's shelves. This saw rich picking for any would-be last minute traveller. A £200 week long trip to Greece was now being offered at £99 with Newbold saying: 'We are at the centre of a complete marketing madness. We want stability more than anything, but we have had to cut our prices because of the unrealistic opposition from our rivals. It's good news for the holiday-maker. But we will never be beaten, we are the biggest, we are the best and we are determined to maintain that position even if we have to trade off profit for market share.'
Kylie Minogue flew Dan-Air again in September, but this time there was a bit of drama at the airport. X-Ray machines detected a pair of handcuffs and Ms. Minogue was instructed to open her bag to disclose the contents. The handcuffs were prohibited on board, as the might be used to handcuff the pilot in a hostage situation. Ms. Minogue who was reported as being 'mortified' was then asked to sign the prohibited article declaration, before the handcuffs were placed in a sealed bag and given to the crew, who would return them to her at the end of the flight. She then boarded the Dan-Air flight DA 961 to Nice
In October, A pressure group who campaigned about Manchester Airport noise levels awarded Air 2000 an award for being the quietest airline at the airport. Airtours achieved the second place. This group went on to say that they hoped 'it would encourage the withdrawal of older jets such as Dan-Air's Boeing 727 and BAC 1-11, and also their Boeing 737 200s.' Why did this group feel the need to say the airline's name at its presentation? The same BAC 1-11 were operated by British Airways and other carriers. The same Boeing 727 were used by Lufthansa, Air France, and a host of other airlines. The 737s were operated by dozens of airlines in Europe, and in the UK alone Dan-Air, Monarch, Britannia, Air UK Leisure and British Airways had fleets of the 200 series. Dan-Air's comment? 'We have been investing in new, quieter aircraft since before those airlines even appeared. The BAe146 remains the quietest airliner in the world in its class. We use the same equipment as most airlines at Manchester. Our older BAC 1-11 have been fitted with hush kits in an attempt to comply with noise regulations.'
Dan-Air came with £1 million of going bust during the Gulf war it was disclosed on October 9th. During the conflict the airline lost £29 million and came within a whisker of following Air Europe into oblivion. But the end of hostilities saved the company who were now having a share offer to bolster finances. According to Chairman David James, the airline was now in its strongest position in more than a year. After finally admitting how close the airline came to disaster, as so many people had predicted. 'We started off with an £82 million facility and ended up with less than £1 million of busting it. We had about two days left. Air Europe went down on March 8th and we were running neck and neck with them. Their collapse didn't save us - the end of the Gulf war did.' The new found confidence in Dan-Air was reflected by industry analysts who predicted losses for the next six months would be down to £5 million. The share offer would see 107.5 million shares offered to employees and existing shareholders. This was expected to raise £49 million capitol to continue a recovery which many people feared would never happen. James said that they refunding was essential to enable Dan-Air to move from charter flights to short and medium haul scheduled flights.
According to press reports on October 25th, Dan-Air was on the way back to financial health. On the 24th at a meeting of shareholders of parent company Davies & Newman. The assembled approved a £50 million rescue rights issue, allowing the company to go ahead with applications for more air routes. Dealings in the new Davies & Newman shares start on November 4. Davies & Newman’s old shares closed 3 pence down at 54 pence
In late October Dan-Air agreed to pay fifteen of its most senior cabin crew 50% of their wages to stay at home for the winter months, giving them permission to fly with other airlines to earn extra cash. The airline had already laid off 50 temporary cabin crew for the winter, as was standard practice. For the winter months Dan-Air would only operate one of the four strong Manchester charter fleet. The airline blamed a fall in the number of passengers, but at the same time several other airlines were reporting a much busier winter period than in previous years. Dan-Air's spokesman said: 'Our winter charter programme at Manchester is being reduced because we don't have the demand, but it does come at a time when we are increasing the number of scheduled flights from Manchester to Gatwick increasing from six flights a day to eight.' Manchester Airport's publicity department refused to comment on Dan-Air's flights but said that winter flights from Manchester were set to increase by 25% with the number of passengers travelling to Cyprus almost doubling. One former senior manager told us:
'It was all good saying that we wanted to be this scheduled airline with all the best routes that earn money. The reality was that we had always relied on charter flights as our bread and butter. I know that many people, myself included, were exasperated at the board's insistence that we try to avoid charter contracts. With what had happened with ILG I thought it made perfect sense to reap those rewards of grabbing all the available work. If other airlines had increased their capacity by as much as 300,000 it made no sense at all not to do so. Those cancelled Intasun passengers got their money back and they still wanted a holiday. Air Europe were not around to take them and we had the effing aircraft to do the job. I told several board members that I agreed with the long-term aim of where we were hoping to be, but in the meantime, in the middle of a recession, we take whatever comes our way. What did seem strange was that on a day to day basis we didn't seem to be any different. Not a lot seemed to be happening. All these years after, I still have the nagging suspicion in my mind that if their plan didn't happen that they were making us an attractive proposition for a take-over. Nothing was said, but I just felt it. There had been this huge re-financing thing going on, I didn't really twig that it was largely to make sure that the banks got all of their money back. I still believe Dan-Air's survival and success was not the number one priority.'
The former managing director of Dan-Air, Graham Hutchinson was appointed as chairman of a drug rehabilitation centre in Berkshire. His appointment, along with five other directors was made by the then Health Secretary William Waldergrave.
Norway's Braathens airline had benefited from Dan-Air's decision to drop the Newcastle-Norway services. They had anticipated that they would carry 700,000 on the Newcaslte-Oslo flights, but demand had exceeded the one million mark and flights between Newcastle and Stavanger and Bergen had been expected to carry 600,000 passengers and had actually carried two million. As a result Braathens decided to make Newcastle its UK base and flights were to be increased from six a day to nine. The airline budgeted to make a £700,000 profit on the flights and in fact made more than £1 million.
The Inverness bound morning flight from Heathrow was involved in an air-miss on November 1st this year. The BAC 1-11 averted a collision with a British Airways Boeing 747 which was in-bound from the United States. None of the passengers on board the Dan-Air aircraft were aware of the incident. The 1-11, flight number DA 152 had departed Heathrow at 9 am and touched down at Inverness at 1030. The two aircraft came within a mile and a half over Hemel Hempstead. Dan-Air reported the incident to the Civil Aviation, who said: 'As the two aircraft were more than a mile apart it was not classified in the near-miss category.' A Dan-Air official said they had not been notified by ground crew, nor any passengers as the disembarked. According to the CAA's announcement that night, the Boeing 747 was descending to 6,000 feet on its way to Heathrow from Chicago, and receiving a radar control service from Heathrow. The BAC 1-11, under control from the London Air Traffic Control Centre was climbing to 6,000 feet on route from Heathrow to Inverness.
A Hawker Siddeley 748 aircraft carrying 32 passengers burst a tyre as it landed at Scatsta Airport on November 4th. The regular Dan-Air flight from Aberdeen, chartered by BP, touched down just after noon and was rolling to a stop when the tyre burst. Airport manager William Inkster said on Tuesday: ‘'It was just like a car tyre bursting. After it was inspected we decided to turn the aircraft into the wind and get the passengers off.' The plane, which was due to take off again at 2.15 pm, was delayed for nearly three hours while the tyre was changed.
The Dan-Air pilot Captain John Wolff, took his own life just four days after losing his job an inquest heard on November 6th. The pilot had already been given a final written warning after previous breaches of discipline, when he broke airline rules on the flight from Corfu. The Crewe hearing was told. Cheshire Coroner John Hibbert said it was quite clear from the circumstances and a note the former RAF pilot had written that Captain Wolff had taken his own life. His ex-wife said she was aware that he was having problems at work, but had no idea that he had lost his job. Police Constable Stephen Johnson discovered Captain Wolff's body at a bicycle scramble track near Nantwich. A pipe led from the exhaust pipe into the car and there was a strong smell of car fumes inside the car. The Coroner ruled a post mortem examination showed that the cause of death was carbon monoxide poisoning. Mr. Hibbert said that a letter from Dan-Air said in view of Captain Wolff's past record and the final warning issued to him left them with 'no option' other than to dismiss him. At the time of Captain Wolff's death it was revealed that he had allowed 21 year old stowaway Colin Fox to stay on board the holiday flight, despite being warned that the aircraft would then have one too many passengers on board. Mr. Fox from Cumbria had been smuggled on board the aircraft by friends from a football team, and Captain Wolff had allowed him to stay so he wouldn't miss his landing slot at Manchester.'
A campaign was launched on November 6th promising fares at up to 25% lower than rival carriers on ten European routes in a bid to attract passengers. The scheme would start immediately and would include flights to Zurich, Nice, Paris, Berlin, Montpellier and Toulouse. Further cities would soon be added.
A company Boeing 737 made an emergency landing at Inverness on November 11 after flying into a flock of seagulls. The bird strike happened after take-off from Inverness at 7:15 in the morning. Seconds after lifting off from the runway, dozens of seagulls flew into its path, damaging its port engine. It was still able to generate power, but the Captain decided to land the aircraft back at Inverness. At 7:32 with fire-engines and other emergency vehicles watching nervously, the aircraft landed safely. A replacement aircraft was commissioned from Aberdeen, which landed at 10:15 and most of the passengers re-boarded after eating the breakfast they should have eaten on board, to continue their journey to London Heathrow. However some were too frightened to go back on board and others cancelled because they had missed appointments. Wendy Schuseil from Geneva, who was home in Inverness on holiday admitted she was dreading the journey: 'I'm terrified of flying anyway and this has not made me feel any better. We had just taken off and there was this tremendous bang. Then there was this burning smell. I was travelling with my Aunt, Jane, and I turned to her and asked her if she had noticed it. She said : 'They have burned breakfast'. But then the pilot came on and said there had been a multiple bird strike. He said there was nothing to worry about and that we would be returning to the airport. He told us he was leaving the undercarriage down, and then took a long, slow sweep over the Moray Forth before coming back in. I remember watching the blue lights of the emergency services flashing, and seeing flares go off to frighten birds away. I just wish they had done all that beforehand and we it might have saved us all this trouble. Now I feel I would need a good lot to drink, although it's not opening time yet, to go back on the other 'plane.'
A Dan-Air spokesman said: 'Everyone got back safely and there was no panic. Aircraft can fly on one engine, but the pilot made the right decision to come back in to land. The 'plane has been grounded and the affected engine will now be replaced.'
The aircraft had suffered a shattered turbine, but there was no damage to the aircraft. The BAC-1-11 carried out the next sector before a replacement Boeing 737 was brought in to carry out the timetable. A Dan-Air spokesman said the aircraft would be serviceable within a day or two.
Prime Minister John Major was dragged into a six months row over Father of two Bob Weil's long legs. Six foot two Bob from Durham said his request of an extra leg room seat on a Dan-Air flight to Malaga was ignored: 'I have a prolapsed disc and needed the extra room to ease the pain during the flight.' He said. But he claimed his holiday was ruined because he was in agony for the first three days. Months of letters between Bob, Dan-Air and Tour Operator Airtours ended when he wrote to the Prime Minster, complaining that large companies were treating him with contempt. The matter was then placed in the hands of the Department of Trade and Industry.
'When I booked with Lunn Poly in Durham, I was told that if I got a Doctor's Certificate, supporting my request for extra leg room, everything would be alright.' He said. 'At the airport I checked with Airtours and showed them the certificate and they told me that a seat with sufficient leg room had been reserved for me on the Dan-Air 'plane.' I was horrified when I boarded the aircraft to be shown a seat with approximately one inch of extra leg room.'
He then began proceedings to claim for compensation from Airtours and Dan-Air, saying: 'I feel this is a classic case of no-one being willing to accept responsibility when things go wrong.'
Airtours claimed that they had passed the request and the Doctor's Certificate on to Dan-Air, saying 'We are very sorry to hear about Mr. Weil, but we feel we did everything we could to help.' Dan-Air said: 'We did not hear from the tour company about his special request.
Newcastle Airport had seen a 20% increase in the number of scheduled service passengers travelling on Dan-Air this would see the introduction of larger BAC 1-11 being used from 1992, replacing the Hawker Siddeley 748. As with many UK airports, there would be thousands more charter flights seat sales for 1992. Thomsons, Airtours, Sunworld, Cosmos and Owners Abroad all would have an extended programme from Newcastle. The super saver domestic air fares introduced during the Gulf war would be extended right through the winter until at least March, the airline declared in November..
Children with special need would be given some Geordie hospitality in November. The children from a residential school in Kent flew into Newcaslte and were met by Whimsey the Fiery Dragon and Captain Swash-buckle before being treated to a day at a theme park full of surprises arranged by Dan-Air. The children would then fly back home to Kent.
Gatwick Airport started work on a radical £25 million upgrade to terminal and check-in facilities. The project improve passenger handling for outward flights from the airport's South Terminal. There would be new check-in desks, passenger information screens and baggage sorting. Major improvements would include computer-read tags for baggage identification and the most technically advanced luggage sorting system in the world, capable of printing baggage labels, with passengers details on bar codes. The system could issue boarding cards and was linked directly to Gatwick Handling and Dan-Air offices, giving up to the minute information in real time. there would be an £4 million extension to the baggage handling hall, and an air-side passenger transit facility. Passengers travelling with Dan-Air were already benefiting from 22 upgraded check-in desks operated by Dan-Air and provided by Gatwick Handling. The new desks had video screens and extensive Dan-Air logos. There had most recently been the installation of the Dan-Air Class Elite desks which had a roped-off area and carpeted lines.
For the second time in a month, an aircraft was forced back to Inverness shortly after take-off. This time a great deal of mystery surrounded the story. Flight DA 157 with 52 passengers on board had departed Inverness for London Heathrow at 17:30. Shortly after take-off the front wheel door was hit and damaged by an object which, at first, was believed to be a bird strike. The damage meant that the damaged door did not close properly and the pilot, as a precaution, returned. Engineers ruled out a bird-strike and concluded that the door had been hit by something much heavier. Passengers faced a three hour delay as a replacement aircraft flew in from Manchester after it had completed its own schedule. A Dan-Air spokesman said: 'When the nose-wheel problem was discovered, the pilot made the decision to return. He swept around in a circle and landed at 6 pm. A stay on the nose-wheel door was damaged which prevented the door from being secured. The engineers who have examined the aircraft believe it was struck by something larger than a bird. We don't know what caused the damage, it could have been a stick thrown up by the wheels from the runway or something that was blown from outside the runway. These incidents are not uncommon. We get bird-strikes often enough, but it's fairly unusual to be hit by other objects. Damage to the aircraft is only slight, but it will be out of action until it is fully repaired.'
High flying Santa proved to be a big hit from Manchester this December when Cosmos Holidays chartered Dan-Air Boeing 737s for a series of flights that would see 900 passengers travel to Finland. The flights were so popular that the 737 was replaced with a bigger Boeing 727 enabling a further 250 people to travel. Other flights would take-off from Gatwick. Scheduled flights from Gatwick to Oslo took to the skies in November. Introductory fares would be offered at 30% cheaper than those of British Airways or SAS.
The CAA granted Dan-Air the licences for several other major routes including Malta, Rome, Barcelona, Palma, Stockholm, Istanbul, Athens and Cairo . Captain Alan Selby takes up the story:
'This was not as simple as it first appears. We were not carrying out as many charter flights this winter and I am sure the powers that be had already decided on the same status the following year. It was relatively straightforward with Amsterdam and Paris, those flights could operate with BAC 1-11 which could easily reach the destination and would work admirably on them with an altered cabin configuration. It starts to get problematic when one wants to fly to Cairo or Istanbul, and to some extent Malta, which is more or less at the far end of range capability of the 1-11. Even with a reduced load of passengers. It may not have been economical to fly that distance. Some of the newer Boeing 737s would be ideal for those services. The problem was that we didn't have enough of them. There's all sorts of paperwork way beyond my pay-grade that goes into obtaining a 737 on lease. There is also the issue of training pilots who may not have ever flown a 737, the same goes, but to a lesser extent, with cabin crew. We would also need, in most cases, to establish a base, with either a handling agent or to have our own handling, which was certainly needed in Paris because we would be flying there so frequently. Not so much in Istanbul, but I believe many of those destinations would have been successful. Gibraltar and Brussels were working out exceptionally well, and I knew that business travellers and tourists would benefit from what we had to offer. The CAA had a very slow approach to not only approving things, but to actually hearing applications. You might apply for something in January and be told that you would have the hearing in April. You might, if you were lucky, get to start flights in June. If Air Europe had already operated the services and were now no longer doing them, and not because they were unprofitable, but simply because Air Europe wasn't around any more. Then it made sense to allow Dan-Air to carry them out, as they did with Brussels. I saw a documentary on TV where non aviation executives were arguing the toss about why they should get a business model together before getting an aircraft. They often assumed that if you had an aircraft it was just good to go. That was not the case. The 727 could have easily flown those longer routes, and I know because I was a Captain on them, I believe the 727 could make a profit on a scheduled flight. We would have far fewer seats, with passengers paying substantially more for their tickets. There would be a business class cabin which would be much more expensive. We would be permitted to carry cargo on those flights as well and there would be ancillary sales such as duty free, with passengers who had a larger budget. The 727 usually made a loss on charter flights, even when we crammed so many people in them. Those extra people made the aircraft heavier, using more fuel. We couldn't charge any more per passenger mile than any of our rivals - because Tour Operators would turn their back on us and go to a another airline. We could only hope that bar and duty free sales would be healthy. The 737 would be even more profitable. Others may have a different opinion, but Olympic, Alitalia,Turkish Airlines and Egyptair were flying the 727 to and from the cities we aimed to fly to, and one would assume they were profitable. What I don't think they were aware of is that the charter fleet was a separate entity to the scheduled fleet. It wasn't about how comfortable you could make a cabin, it was about how much it cost to fly it - land it and how much you were selling tickets for. I think they learned a lot, very quickly.'
In December 1991 To reduce its dependence on Gatwick and to take advantage of new business opportunities at other UK airports in the late-1980s, Gatwick Handling established GH Manchester and GH Stansted to begin ground handling operations at Manchester and Stansted respectively. (The former took over the operations of Manchester Handling, an associate company of Dan-Air formed in 1985. Aer Lingus became a major shareholder in December)
All but six of the HS 748 aircraft had been sold by the end of the year. Of the forty nine aircraft in the fleet, nineteen were in the charter division and 30 aircraft were now carrying scheduled service passengers. Chairman David James envisaged Dan-Air flying two million charter passengers in 1991 and two million scheduled passengers. There were plenty of airlines that were successfully operating as scheduled carriers that carried two million passengers and indeed less. James had managed to refinance Dan-Air with the sale of the engineering division, aircraft and a share offer. The shares had raised just over £50 million. Total losses for the year were £35 million of which £5 million was accounted for with the relocation of the head office.
James said the cash would be used to balance the bank accounts and to go towards financing new aircraft. Dan-Air replaced BAC One-Eleven 500 series aircraft with Boeing 737 aircraft on many new routes. From this period on, Dan-Air carried more scheduled passengers than British Caledonian had ever carried in any single year throughout its existence.
It was a year of many changes and the following year would, at best, be a testing one for the airline.
NEW ROUTES & ROUTE CHANGES
- Gatwick - Brussels - Route commenced - April
- Gatwick - Oslo - Route commenced - Twice daily except Saturday - November
- Gatwick - Paris Charles De Gaulle - Increased to nine flights daily - May
- Gatwick - Manchester - Increased frequency to eight flights daily. - May
- Gatwick - Gibraltar - June
- Gatwick - Rome - (Proposed Route - CAA Granted Licences)
- Manchester - Gothenburg (Proposed Route - CAA Granted Licences)
- Gatwick - Athens (Proposed Route - CAA Granted Licences)
- Gatwick - Cairo (Proposed Route - CAA Granted Licences)
- Gatwick - Malta (Proposed Route - CAA Granted Licences)
- Gatwick - Palma (Proposed Route - CAA Granted Licences)
- Gtwick - Istanbul (Proposed Route - CAA Granted Licences)
- Gatwick - Stockholm (Proposed Route - CAA Granted Licences)
NETWORK & PRESS 1991
1992
The previous year had been a terrible year for the whole airline industry. Two British carriers had gone bankrupt and the country's second largest Tour Operator had collapsed. Dan-Air had been saved, but there would be no room for complacency, 1992 looked set to be equally tough, perhaps even more so than 1991.
Dan-Air decided to relax several dress code rules that had hitherto applied to cabin crew. The ban on married cabin crew had been dropped a few years ago, and from this year, the maximum age of cabin crew was scrapped. There had been a magazine article that criticised UK airlines for only employing younger staff to work as cabin crew. Dan-Air had responded that they did in fact employ older crew members. One such stewardess had retired aged 60. It was true that most airlines had a ceiling for flight attendants, certainly at the application stage. Those that had been employed already had a much greater chance of staying on as cabin crew than a middle aged applicant would have. This is in total contrast to Easy Jet in 2024 who were actively seeking cabin crew aged 50 plus to commence duties, even those who had never flown as crew before.
From January the wearing of some jewellery was permitted, a watch had been permitted and a wedding ring. From now stewardesses could wear pearl earrings and a pearl necklace. Hair ribbons would still have to match the company uniform though! One uniform change was welcomed by many of the stewardesses. The latest Dan-Air hat would now be optional. There had been many changes in uniforms over the years, the most recent hat had never been popular. Management said that the wearing of the company hat 'is up to the individual' - A spokesman said 'The type of hat the girls are wearing is a bit outdated, we couldn't just change the hat, but when we eventually change the uniform, probably next year, we will look at the question of hats again.'
One Ringway based stewardess said:
'It's wonderful news, the hats made us look stupid. If they were pulled tight over your eyes to stop them blowing off, it messed up you hair, and passengers would always be making derogatory remarks. Passengers used to say they looked like potties when stored upside down.'
Kent based KM Headland Travel joined forces to offer holidays to Jersey departing from Gatwick using Dan-Air scheduled flights for £145. New Horizons had a similar offer throughout March for long weekends with scheduled flights to Toulouse including accommodation for £119. Timothy Redburn was appointed as Davies and Newman's Group Finance Director on January 9th. He had experience working with the Simon Group and Night freight.
Dan-Air were fined £1,000 on January 29th for not transporting a live animal in the correct manner. The dog was being transported from Nice to Gatwick. Agents acting on behalf of the airline had placed the dog inside the hold. Upon unloading an RSPCA inspector discovered that all but one side of the crate was surrounded by luggage and therefore ventilation was restricted. The crate was also seven inches too short and one inch too low for the breed. Trading standards had also found that the crate had ventilation holes that were seven times larger that the International Air Transport Association (IATA) permitted, which would allow the dog to put a paw or even its nose through. This broke IATA rules. Trading Standards had brought the prosecution fo which Dan-Air pleaded guilty. Company Secretary for Dan-Air David Quinn said: 'We consider this matter extremely seriously and have issued instructions to all our agents with fresh information.' and he pledged that Dan-Air would no longer transport animals from Nice. As well as the fine, Dan-Air were ordered to pay £80 costs.
John Olsen, the Company Manager of Cathay Pacific Europe was appointed as Chief Executive of the Davies and Newman Group Of Companies. He would take over from David James in April. James himself would became Chairman of Dan-Air and the Group Chairman. The company had been looking for a new chief executive since October 1991. Olsen, aged 49 when shareholders agreed to a new rescue plan which involved a virtual re-flotation of the company with the issue of 107.5 million new shares. The share issue enabled Dan-Air to raise £49.4 million to pay off debts and fund operations. The firm looked set to announce a loss of £35 million 1991 but expected to be back in profit this year. Peter Ryan Group Deputy Chairman would stay with the company and Charles Whyte, Group Managing Director would remain in place until Olsen started work in.
The press carried a story about Dan-Air 'amazing turnaround' in February. The article said ''Once troubled' Dan-Air would be recruiting 100 new staff in preparation for the six new routes the company would be flying to from Gatwick this year. From April Stockholm, Athens, Rome and Barcelona would be added to the network with Istanbul, Cairo and Malta added later in the year. The re-financing of the airline enabled the company to apply for new routes. A company spokesman said: 'Despite the recession, it is the right time for the airline to start new routes. Recruitment for ground staff and cabin crew is already underway.'
In a refreshing piece, one Crawley newspaper said of Dan-Air's new routes: 'Established in 1953 Dan-Air has gone from strength to strength in superb style.' The same newspaper had called the airline 'Ailing' only months previously.
The new Gatwick-Athens service was launched on Monday 2nd March. The flights would be operated using Boeing 737 aircraft with 'Class Elite' offered as well as economy class. The airline took delivery of another Boeing 737 400 series, one of six on order as part of a fleet renewal process. The Athens flights would use Boeing 737 jets, as an introductory offer several newspapers bargain three night breaks in the Greek capital in March, April and May, including accommodation for £249. The introduction of flights to a sunshine destination in March might not have been ideal, as the main summer season started in May. These offers helped fill the aircraft and allowed the airline to find its feet as a scheduled operator in a new country. One of the sales team had this insight:
'What people don't often know about charter flights is that members of the public couldn't just buy seats until well into the eighties and even then the restrictions about how many were sold and to whom were very tightly controlled. With scheduled flights, seats could be purchased from us direct or via a Travel Agent. We had never carried out scheduled flights to Greece, and we had to appeal to potential Greek customers who were booking their flights from Athens to London as well as the British. We needed Greek speaking staff at Athens if we were to make a go of selling to the Greeks. There had to be discussions about all manner of things from suitable menus to in-flight announcements that would have to feature safety instructions in Greek. We were certain that the majority of our passengers were going to be British people. Load factors were decent, even the Class Elite cabin was selling, because the UK has a strong connection with Greece and business travellers seemed to appreciate what we were doing. The introductory offer was a great price and extra nights were just £30 a night. We could offer stays of any length because we were operating the flights daily. Something we couldn't ever do with a charter seat-only ticket.'
Scottish residents at Moray held their annual charity auction in May where they hoped to break their previous record of £50,000. Dan-Air offered the chance to be an air hostess for the day which raised £220 for the good cause. Their contribution helped smash the target by a cool £5,000
David James was set move to his next 'rescue' - the revival of the international transport group LEP. James said that his appointment would not affect his determination to go through with the litigation he had begun for Eagle Trust. Previously James had always refused to take on more than two 'rescues' at any time, saying; 'Normally, I take on one new one a year. That last one was Dan-Air which I took on in October 1990. That has now been re-financed and is very orderly. A new chief executive is taking over in five weeks. I will stay on as conventional chairman. Eagle Trust still takes two days a week. We are now getting to the interesting part of the litigation.'
Meanwhile, Dan-Air's Chairman, Peter Ryan was to rush in to help out at the Newcastle based engineering and signs company; Torday and Carlisle. The firm had experienced a torrid time in 1991. Peter Ryan would be the non executive chairman of the group, leaving Paul Torday free to concentrate on his duties as chief executive.
On March 10th three “utterly offensive” oil rig workers who reduced an airline stewardess to tears with sexual remarks were ordered off a plane at Manchester Airport The trio who had been drinking, upset all the cabin crew aboard a Dan Air Boeing 737 flying from Aberdeen to Manchester and then on to Gatwick. Stewardesses complained and refused to travel onwards with the men on board. The three men eventually got to London Heathrow after paying £81 each and giving British Airways a promise that they would behave themselves.
Members of Inverness and District Chamber of Commerce agreed to write to Dan Air about increased air fares between Inverness and Heathrow. Chamber president Captain Eric Milne said: 'It would appear to us that the business traveller is being penalised yet again with the cheapest air return to London for a day at £180. There are cheaper fares available but it entails an overnight stay of a Saturday night. We would suggest to Dan Air that this should be extended to cover weekday nights. It should be remembered that the Inverness schedule route is one of their most profitable.'
Gatwick Airport’s mixed fortunes continued into the third week of March with two catering firms announcing they were to axe jobs after losing several airline contracts. Some 40 jobs were set to go at Caterair which had lost its contract with Continental Airways. Giant catering suppliers Trusthouse Forte Airport Services said a few employees may lose their jobs after Dan-Air decided to end their three year association with the company. Despite this setback Forte had two flight kitchens at Gatwick which are both recruiting staff The company also has a number of different businesses in the area to which staff could be re-deployed. A spokesman for Forte said that if jobs did have to go at the end of the day they may be able to find placements with other companies. The new contractor will need staff 'Hopefully they will be interested our highly trained and professional employees.' Roy Wilson of Forte said: 'It has been a very successful partnership, and we are sorry not to be continuing with Dan-Air - Dan-Air have acknowledged our high performance over the last three years and we will continue to supply Dan-Air at other UK airports.'
Twinkling lights in the air lured pensioner Ria Guest a bit off-course on her first ever flight. Airport staff were waiting at the domestic passenger terminal to escort VIP (Very Inexperienced Passenger) Ria on a flight to Gatwick But Ria, 85 had diverted her chauffeur-driven Rolls to the main terminal so she could see the airport’s famous Italian-made chandeliers. Staff caught up with her and settled her into a seat on a company BAC 1-11 jet. Ria said: 'Villagers at home had said I must be sure to see the chandeliers They are so beautiful and twinkly.' Villagers of Cowpe near Rawtenstall had raised £160 to pay for her air-fare as a birthday present and handed the ticket to her at a pub party. But Dan Air went one better and waived the cost.
Above: Captain Mike Hutchins and Ria Guest in the flight deck of a company BAC 1-11
A General Election had been called for April 9th this year. The campaign began six weeks before the poll. The Liberal Democrats chartered a Dan-Air Hawker Siddeley 748 (G-BUIV) for the use of their leader, Paddy Ashdown. The aircraft would be in use for the whole campaign. The aircraft was given a slight change of livery, with the 'Dan Air London' titles replaced with 'Liberal Democrats'. The compass and flag logo on the tail was pasted over with a giant yellow circle with the legend 'My Vote'. Ashdown had to switch planes after a bumpy landing at Newcaslte Airport on March 27th. As the aircraft landed it was buffeted by fierce winds in circumstances which the pilot described as 'difficult'. A Dan-Air spokesman said there were technical problems with the plane, although he would not link these with the landing. The campaign team were switched to the comparative luxury of a 100 seat BAC 1-11 jet. A former pilot mentioned:
'The HS 748 was as rugged as an airliner could be. They flew for years into the Shetlands when no other aircraft could even attempt to land there. From what I understood, the Liberal Democrats did not have the funds that the Conservatives and Labour had. They had chartered jets for their campaign. Kinnock used a British Air Ferries 146 and John Major went for a British Midland 737. The Lib-Dems could only afford a 748. Still, it would have served them in splendid fashion, nipping from one part of the UK to another.'
The aircraft made several appearances on the TV news.
Above: The Liberal Democrat Chartered a Dan-Air HS 748 for the 1992 General Election Campaign
Errol Cossey one of the leading executives at Dan-Air in the 1970s, was interviewed this year. He, along with Martin O'Regan and Alan Snudden had left Dan-Air after disagreements with Fred Newman's refusal to re-equip Dan-Air's fleet with the Boeing 737 200 ADV in 1978. Cossey had gone to Harry Goodman and became the leading figure with the launch of Air Europe. A few years later he was the founder of Air 2000. His interview shed light on some of the thoughts about his time with other airlines, without naming them! After training to be a chemist he realised he wasn't cut out for it, but also that he had to eat. He thought he had a chance of work at Southend Airport, where he was taken on as part of the operations staff: 'Until that time, I'd never even had the remotest interest in aircraft - or airlines, I had a foot on the ladder and I applied for a job with Dan-Air in the sales department. I was there for seventeen years. I had gone as far as commercial director, and I really knew the aviation business by then.'
In 1979 his big break came when he was a founding director of Air Europe. 'It was owned by Harry Goodman's International Leisure Group, and was soon the darling of the holiday charter business. I had parted company long before the ILG collapse in 1991. I wanted to put into practice my view of the future of Tour Operators. I believe that they should be vertically integrated with their own charter airline. So I approached Owners Abroad, now the second largest Tour Operator, which has brands such as Falcon and Enterprise. I suggested that they should think about their own airline, and in 1987 Air 2000 was launched with two Boeing 757 jets. It was almost like watching a video of my own life, using the same basic concepts - using very modern equipment, a dedication to the leisure market, without any aspirations to go into scheduled services, and coming up with high quality passenger services. I've modelled this on the Marks and Spencer and Sainsbury's business approach. Having a good product, being the best in your market and giving good value for money. And I'm glad to say it really works. I ensured we had a good product, marketed it well and that's it. What we don't do is make the mistake of offering too many variations on a successful theme. In a big business, that's where overheads and complications creep in, and costs increase. Aviation is an exciting business, but paradoxically, you have to keep both feet on the ground if you are going to succeed. The business is littered with the tombstones of flamboyant characters who got carried away. They smelled the kerosene, heard the roar of the jet engines and believed their own PR. I couldn't be further from that mode. I've got no interest in seeing my name on the side of an aeroplane. I'm not an aircraft buff, I see myself as a commercial chap. A good salesman, who has got to know the cost of the business he is selling. We can all go out and sell dollar notes for 90 cents, that's not very clever. There's no magic to this business, you've just got to work to get the product right, and getting the right team to operate it.'
The Aberdeen-Scatsa charter flights operated on behalf of BP would come to an end this year. Dan-Air had been the sole operator into Scatsa for several years. The Hawker Siddeley 748 had carried out thousands of flights for the company to the remote airport. Tenders were invited and Loganair were successful with their bid. They would carry out flights using Jetstream prop-liners.
Airtours was now the second largest Tour Operator in the UK. Chairman David Crossland announced in April that the company had arranged banking facilities of £92 million to cover their medium term bonding requirements. This was to cover the company in the event of it collapsing. Tour Operators needed to have a Tour Operator's Licence from the Civil Aviation Authority. before receiving the licence the company has to put up bonds which would provide cash to repatriate any stranded holiday-makers should the worst happen. The amount of bonds was determined by the CAA and varied between 10 and 25% of their projected turnover. As a leading Tour Operator their bond was 10%. Airtours now had a fleet of nine MD 80 aircraft and had expressed an interest in the Airbus A320.
The Daily Express teamed up with Dan-Air for an incredible two for one offer on flights from Gatwick to Rome, Athens or Amsterdam up until June 20th. Throughout the next few months there would be similar offers to other Dan-air destinations. The offer was open for all flights, and this would include Class Elite cabins and even the cheapest APEX services. The Class Elite offer would include entry to the Executive Lounge for both people. This would mean two people could fly to Amsterdam for just £108 (Elite £262) Athens for £256 (Elite £656) and Rome for £256 (Elite £500). the partnership was extended to Holiday Inn Hotels where the same two for one would apply. Readers were asked to collect tokens from the newspaper and then complete the booking form in the newspaper.
The airline announced in April that four of the older BAe146 aircraft (100 series) were being sent back to British Aerospace along with two BAC 1-11 jets. They would be replaced with four of the latest variant of the 146 - The 300 series. The jets were eight years old and the newer models would bring down the average age of the fleet. The cost was explained as negligible. In addition to these changes, there would be a further two BAe146 300 series brought into the fleet at a cost of £20 million. The twelve strong BAC 1-11 fleet now had ten aircraft operating scheduled flights in a 99 seat layout and just two were flying charter flights with a 119 seat layout.
The Rome scheduled service commenced on April 20th with a daily flight to Fiumicino Airport which would depart Gatwick at 1705, arriving in Rome at 2030. The return flight departed Rome at 2120 and arrived in Gatwick at 2150. Flights would be operated by Boeing 737 aircraft and return fares were from £156
On April 21st, Davies and Newman posted full year results that indicated the company was on the right track. Turnover was £317 million which was an improvement on the forecast £312 million - with losses of £18.9 million against an expected £19.1 million. David James said: 'The board believes that it has made excellent progress overall in implementing the key elements of the strategy.' On the charter side, James said he shared the concern of other airlines that certain Tour Operators had applied to the Civil Aviation Authority (CAA) for permission to use an eastern European airline saying 'As the CAA have the same control over such airlines, the company has made representations to the relevant Government departments, urging them not to grant an operating licence.' Davies and Newman expected to make a loss in 1991 because of the Gulf war and the impact of the recession, but it did cut its losses from £38.7 million to £35.4 million. James said the continuing recession, General Election, uncertainty and terrorism had combined to depress the market this year, adding: 'With the election out of the way and expectations of more general economic optimism, there may be indications that market growth is beginning to be re-established. Dan-Air is continuing to increase it market share, giving it considerable encouragement that the company's strategy would prove to be well-founded in the longer term.' James did not see shareholders receiving any dividend until 1994.
The share scheme had raised £50 million which would be used as part of the rescue strategy which would see a switch of emphasis from charter to scheduled flights. An upgrade of the fleet and the move of head office from London to Gatwick.
Gatwick Airport had noted that there was a substantial increase in the number of business travellers over the last twelve months. New jobs were in the pipeline at the airport too, A Gatwick spokesman said: 'We are starting to see an improvement at our airport, we are still suffering from the loss of Air Europe. This is why we are trying to encourage business travellers. Dan-Air have started to build up their range of business destinations, places like Paris, Brussels, Vienna and Madrid. They have also started services to Oslo, Stockholm, Athens and Rome. they will start flying to Barcelona on May 18th and we are both confident they will pick up some of the Olympic Games athletes and spectators.'
Dan-Air said 'We will commence flights to Cairo and Istanbul late this year and we think we will carry three million passengers on scheduled flights this year compared with two million in 1991. This is partly due to bigger and better aircraft, new services and increased frequencies on our existing services.
British Rail announced new rail fares from Newcastle to London with an APEX fare of £25. Train times were intended to lure away air travellers. Dan-Air dismissed the train operator's cheaper prices, saying that airline attracted a different kind of passenger and that they didn't foresee their services being affected.
Seven Dan-Air staff were among the first to visit the new Euro Disney Theme Park near Paris. they had all entered a staff competition and would be there for the park's preview day. The park would form part of Dan-Air marketing campaign in the near future.
The Daily Express two for one deal featured their next set of destinations in their link up with Dan-Air. the three destinations this time would be Barcelona, Madrid and Gibraltar. Barcelona fares would be £137 for two people (£430 for two in class Elite) Manchester- Barcelona £249 Aberdeen-Barcelona £295 - Gatwick-Madrid (£160 for two £476 for Class Elite) and Gatwick-Gibraltar £185 for two (£506 in class Elite) these incredible offers would be valid on all fares including the lowest APEX fares.
Dan-Air Chairman David James gave an interview in May saying that the company had weathered the storm. Despite posting a hefty loss for the year he said: 'Made excellent progress overall. The airline is one of the few who have weathered the worst year in aviation.We have been able to achieve these figures under very difficult circumstances. I am confident the company will improve performance as the economy picks up. Having established a growth pattern in the unfavourable conditions gives considerable encouragement that the company's strategy will be well founded in the longer term.' He said the strategy included new flight schedules and services, fleet renewal and switching emphasis from charter flights.
The new Group Managing Director, John Olsen officially started working for Dan-Air in April. His salary was a reported £150,000. The recruitment of Olsen was seen as a positive appointment. No one had thought for a single second that Olsen would have left such a successful airline to work for one that was predicted to fold.
In May, Dan-Air rolled out what was announced as its largest ever expansion at Gatwick with flights to Rome now operating daily. To celebrate the launch of new services Dan-Air offered passengers the chance to fly two for the price of one to ten destinations. The offer would be rolled out as each route opened, plus a few of established routes would feature the offer. From May 18th Barcelona, Madrid and Gibraltar would see the special fare. It would apply on both economy and Class Elite cabins, subject to availability. Effectively this meant half price tickets. With the Super Pex fare passengers had to book at least seven days in advance, staying at least one Saturday night. At the other end of the scale, Dan-Air offered Super Pex fares to Barcelona from only £137 for two and Class Elite at £430. There would be Dan-Air flights from regional airports to Gatwick to connect to the new services with fares on Manchester-Barcelona being £249 and Aberdeen-Barcelona at £295 Madrid and central Spain fares were to be £160 for two Super Pex tickets, and £476 in Class Elite. Travel from Newcastle is from £288, from Inverness, £318, Gibraltar was on offer at £185 for two Super-Pex tickets up to £506 in Class Elite.
May 7th saw drama when a company Boeing 737 took off from Newcastle on a flight to Lanzarote and flew into a flock of seagulls. The aircraft with 125 passengers on board was forced to return to the airport where shaken passengers were taken to a lounge and given refreshments. No-one was injured, but the aircraft nose was badly damaged. Eight fire engines were on standby as the aircraft landed safely.A spokesman said: 'The aircraft was on its climb at 8:15 am this morning when it struck the birds. The aircraft was handling normally, but the Captain returned the aircraft as a precautionary measure. The passengers were perfectly safe and would not have been aware of the impact. The real danger is when a bird is sucked into an engine - that can cause real damage, but this didn't happen. The passengers were understandably shook up and we apologise for that. They boarded a second aircraft and took off at 10 a.m'. The CAA were informed. Newcastle Airport said that they took measures to prevent birds being in the area, but that they did occasionally get struck by aircraft. The passengers continued their journey later that day.
Elaine Padgett who was on the flight with her husband Paul said:
'I am a nervous flier, so we had watched the safety demonstration like hawks. The aircraft roared down the runway and we took off smoothly. Shortly after becomming airborne I heard the thumps at the front it was really loud. There was no doubt we had hit something. The pilot came on the tannoy and told us we had hit some seagulls, but it sounded like we had knocked over a load of deer. My husband saw something whizz by the window. Thankfully I didn't see that. The stewardesses went over the safety again and told us what to do if there was to be an evacuation. Luckily it was very smooth. The Captain was marvellous. I was apprehensive about catching the second aircraft, but I guess if you are in the sky there is a chance you will be sharing it with birds. It's a shame they couldn't fly out of the way as fast as we were flying.'
Above: The Newcaslte bird strike incident.
Bags checked in at Gatwick from May 14th were now being be speeded up by new technology installed at the airport in a new £25 million upgrade of passenger facilities. Baggage tag printing would now be automated and integrated into the computerised check-in system. This resulted in tags now storing more details than before. In addition to the passenger name, flight number and routing details, the tags would now carry codes that could be read two ways; both infra red scanners and the newly installed optical character reading system. As the passenger checks-in the tags are added by check-in staff and read by computer controlled scanners as they travelled along the conveyor belt. The scanners used technology similar to those in supermarkets could then direct the luggage automatically to the correct aircraft. The scanners could handle 60 bags a minute which would give staff ample time even at peak periods.
The war in Yugoslavia saw thousands of British Holiday-makers having holidays cancelled. The Yugoslavian airline JAT had been chartered to fly British travellers to many other locations and UK carriers had suffered as a result. The British Government placed sanctions on the former Yugoslav country, Serbia which meant that JAT could no longer operate in the UK. This would benefit Dan-Air as the JAT flight to Gerona would now be with a Dan-Air Boeing 727. The 187 seat aircraft could accommodate all the passengers booked on the JAT example where the Airtours MD 80 had only seats for 165.
May 18th saw the introduction of the biggest route expansion in the airline's history. It was D-Day for a whole host of new services that would include:
- A six day a week schedule between Gatwick and Barcelona
- Doubling to twelve flights a week to both Vienna and Oslo
- Adding Class Elite to a new daily flight to Berne
- Increasing flights to Brussels to four times a day
- Introduction of flights to Istanbul, Cairo, Malta for later in the year
This was in addition to the introduction of flights to Rome, Stockholm and Athens introduced within the last six months. there had been a £25 million investment in improving passenger experience at Gatwick featuring a row of 18 check-in desks exclusively for the use of Dan-Air passengers. Managing Director John Olsen said: 'New routes, the stepping up of services, the first of six brand new Boeing 737 aircraft for the fleet modernisation programme are very positive indications of Dan-Air's planned progress as a major scheduled European airline.'
Memories of early ’stick-and-string’ flying days came flooding back to a Scunthorpe pensioner during a special visit Humberside Airport. John Spafford who was 90 was invited to take a VIP tour of airport and meet a pilot of today Captain Roy Callow. Mr. Spafford was in 1928 a captain for Imperial Airways which became the British Overseas Airways Corporation and is now British Airways. He flew the very first services from Croydon to Karachi (then in India) and Cape Town South Africa in Imperial’s 24-seat Hannibal aircraft, at that time one of the largest land planes in the world with a top speed of 85 mph. He recalled: 'In those days the London airport was Croydon not Heathrow and flights took days not hours' He was unable to look around Captain Callow's jet which had just flown in from Jersey due his ill-health but said: 'I used to fly propeller-driven planes carrying 20 passengers not jet-engined airliners carrying hundreds of passengers Navigation and everything has different technology now. The captain told me I had experienced the real way of flying, I expect he must get bored on his flights — it’s all fingertip control.' During his flying career Mr Spafford piloted royalty and heads of state, diced with death doing loop-the-loops when he was learning to fly and has narrowly escaped a few crashes. Mr Spafford’s flying career ended abruptly when a four-engined Armstrong-Whitworth Atlanta he was flying came down in Northern Transvaal South Africa and put him in hospital for six months. His leg was so badly injured that was not able to pass a medical examination to fly again. So he came home. Of his special visit to the aerodrome Mr Spafford said: 'It was absolutely marvellous and the airport is growing very fast.' The trip to Humberside Airport was part of his 90th birthday celebrations
At the end of May, David James stated that the sustained increase in passengers that was needed to lift the airline back into profit had failed to materialise. He said bookings from April to May had shown no recovery, but that bookings over the last two weeks had shown a marked improvement. This was despite him saying two weeks prior that the airline had been performing better. The airline had posted slightly higher turnover and slightly less losses than forecast. Now James was saying:
'This erratic and unpredictable pattern does underline the difficulty of accurate forecasting in the present conditions.' He had told the Annual General Meeting that 'By adding just two business class passengers on every Dan-Air flight they would add £20 million to annual profits.' James said that the airline's survival plan was 'on course'.
Dan-Air joined the Air Miles scheme in June. This was seen as a positive move as it would complement their frequent flier programme, run jointly with Virgin Atlantic. There would be trial of no smoking flights on some scheduled services starting this summer.
It would come as no surprise to readers to find that behind the scenes, private business was once more being leaked to the press. The investigation carried out to find the person behind the passing on of information had not yielded results. the leaked details disclosed that Dan-Air were looking for a partner company to formally merge with. The story further unsettled staff and passengers and was deemed 'unhelpful' in a statement from Dan-Air.
Dan-Air had been a sponsor of a southern England football league for many years, and in June the sponsorship ended. The new sponsor Parasol Portraits Ltd did not come with mega-bucks. The team Dan-Air sponsored had worn a strip with the Dan-Air logo emblazoned on the front. The new sponsor requested that a patch with the new sponsor's logo be sewn on the strip. The team complained that the strip was already a year old and needed to be replaced. Members of the team - Ditton F & SC resigned in protest of the lack of support from their new sponsors.
The Daily Express two for one offer on June 10th would this time feature Oslo, Stockholm and Brussels. The discount would apply to any fare from the most basic APEX, right through to Class Elite. FROM Gatwick-Brussels the fare for two was £117 and £290 for two on Class Elite. Stockholm £286 (Class Elite £466) and Oslo £236 (Class Elite £420) Connecting flights from Manchester, Newcastle, Jersey, Inverness and Aberdeen would also be available with the two for one offer still in place.
A company stewardess lost no time when she noticed a megaphone had been stolen from the plane carrying rugby fans to the Grand Slam Wales versus England match at Twickenham in March. For she called Gatwick police —and they promptly nabbed Welshman Jonathon Davies, 25, on his way out of the airport. John Bowron, prosecuting, said they found the £110 megaphone in his bag and enough cannabis resin to make twenty spliffs. He admitted he was drunk at the time said Simon Scammell, defending. He and two fellow fans thought up the idea as a prank, he said. Davies admitted theft and received a conditional discharge. He admitted possessing cannabis and was fined £50 and ordered to pay costs of £40.
The new general manager of in-flight services was to be Aberdonian Alison Beedie. Alison had been with Dan-Air for fourteen years, having started in traffic operation at Aberdeen before moving south to work in ground staff training and personnel. She was subsequently to passenger service standards manager, and for the last eighteen months had been the airport manager at Gatwick.
The last restrictions on air travel in the European Community were swept away on June 23rd in a historic deal which would eventually mean cheaper fares for all. The Transport Secretary, John McGregor, described the agreement in Luxembourg as the final clincher in a 10-year battle for an open skies policy. But while. airlines and passenger groups generally welcomed the deal which would come into force on 1 January 1993, there was a warning that lower fares ‘may be some way off.' The agreement does away with the controversial airline cartels in Europe and subject only to meeting financial and safety regulations, any airline can compete freely on any air route within the EC. It meant airlines like Dan-Air, Air UK and British Midland will be protected from any predatory behaviour of the big carriers. - Mr. McGregor emphasised that the EC’s transport ministers had no power to decide air fares or conditions. But he said: 'Our agreement has put in place all the right mechanisms. The market will do the rest.' Restrictions - which have irritated passengers for years, such as a requirement for a Saturday night stop-over to qualify for low fares, will disappear. The chairman of Virgin Atlantic, Richard Branson, said last night: 'This is good news for the consumers and for airlines and it should have happened 50 years ago.' John Parr, director general of the Air Transport Users’ Committee, was more cautious, and said: 'We cannot realistically look for big cuts at the moment. You only have to look at the financial results of airlines to see that they cannot afford to cut fares.'
Captain Alan Selby recalls:
'If some of this had happened years before it could have been the greatest thing for Dan-Air. For so many years we were repeatedly told by the Civil Aviation Authority that we couldn't fly between A and B because another airline operated that route, or a similar one. We had to ask if we wanted to put a fare up or down. We even had to have permission for an aircraft type and the frequency we wished to operate the service. It was absolutely ridiculous. If this had been done a decade before when we were falling over charters and had ambitions to get onto more high profile scheduled services, we could have made a real impact at Gatwick, Manchester and Newcaslte. British Airways were financially weak then, and they were a state run organisation. No other UK independent carriers had the financial muscle, equipment and knowledge to provide a real network. Now we were embarking on what we always wanted to, when we were ourselves in a weak position, and rival airlines were in some respects, better placed to become a major force.'
A senior manager told us:
'i welcomed the news generally. But there should have been one or two caveats. By saying we wanted de-regulation, and then saying, there needs to be a little bit of regulation, we ran the risk of being accused of speaking with a fork tongue. There was a chance that powerful carriers with state funding could come on a route and operate at a great loss by offering rock-bottom fares until the rival could not afford to carry on, and that did happen. Ryanair have a network now that operates from every country to other countries, none of which are their country of origin, and I approve of that. I think to have some kind of rule that protected airlines from predatory practice would have been helpful - not leaving the whole thing to the market. We see in every sector of industry that those large companies have contributed to the downturn in smaller business. Look at book shops, record shops and grocers. These huge supermarkets could sell those goods for a fraction of the price of independent shops. In Dan-Air's case I think we might have had more of an upper hand insofar that we had the landing slots. When we first chatted you pointed out that there would have had to be a huge change in the way we carried out our business. There would have to be shorter turn around times, less of the free stuff, the loss of a business cabin - and if we did that, then there was a good chance. But it was decided that we should be a stand alone carrier with high standards of service. That model might have been ok for a few more years. We could not stand a chance doing what we were doing in 1992 in today's world. I think in 92 Ryanair was tiny compared to us, and look what happened to them. But back then, airlines were trying to outdo each other in providing more more more. I have come to the conclusion that it didn't really matter for a two, three hour flight. We should have been offering fares far lower that everyone else. Especially where we had the 146 and 737 on hand.'
Dan-air boss Peter Somers kept up the family tradition of success in the Queen's Birthday Honours when he was awarded the OBE. He was the fifth member of his family to receive the award, and Peter's gong was in recognition of his services to the aviation industry. Peter, who was based at Gatwick with Dan Air for 20 years, and was chairman of the Gatwick Scheduling Committee. He had represented lACA and lATA, Under his Chairmanship he made Gatwick the most efficient runway with a similar capacity across the whole of Europe. Since 1991 Peter has been responsible for planning the integration of new aircraft into the Dan-air fleet. On hearing the news of his award he said: 'It is very satisfying that the time and effort spent improving air services for the travelling public have been appreciated.'
Above: Peter Somers OBE
A fundraising event was held via UK television channel ITV on July 18th raised millions for various charities. A call was made from a Dan-Air captain en route to Gatwick from Majorca. Captain Bryn Wyatt had sold trips around the flight deck and had raised £300. The Captain and crew were invited to Redhill to present the cash on air.
Mainland councillors and airline firm Loganair were dealt a severe blow on June 25th with the announcement by BP that the Scatsta airfield runway extension would not go ahead. Critics said the move would put both BP and Shetland Islands Council in a less than flattering light, after both had appeared to signal the go-ahead for the project which would have allowed Loganair to fly Jetstream 31 and 41 aircraft on passenger flights from Scatsta to Aberdeen. In their announcement BP, on behalf of a consortium of oil companies, said oil charter flights would continue between Scatsta and Aberdeen. Dan-Air said they would now no longer provide a month by month rolling contract with BP, instead they would terminate the charter contract when it ran out in September as they were in the process of phasing out their HS 748 fleet. The airport statement said: ‘A number of other airline operators have indicated their ability and willingness to provide the continuity of service.'
Passengers numbers on flights from the, North-East to Amsterdam had ‘gone into free- fall' in June forcing the airline to suspend the service. Daily return flights from Newcastle and Tees-side airports - used mainly by businessmen - would be grounded from July 31st in a move which was blamed on falling demand and the recession. Dan-Air would continue to run its twice daily weekday service between. Newcastle and Gatwick, but flights to the capital on Saturdays and Sundays would be halted as the company put the squeeze on unprofitable routes. Dan-Air pledged that all passengers already holding Amsterdam tickets would be offered alternative other carriers or flights via Gatwick. The cuts would mean 13 temporary cabin staff would have their contracts terminated two months earlier than expected. Chief Executive John Olsen said: 'The continued effects of the recession have led to a drop in demand, and this has forced us to take this action. Like all airlines in the current economic climate we consistently review our routes to remain competitive. Despite all our earlier efforts to safeguard the route the continued effects of the recession has meant a lack of demand to support the service profitably.'
There was increased speculation that the Newcastle-Jersey service was at risk of closure following a drop in demand. There had been fierce competition from Air UK on the Amsterdam route, with the airline saying their four times daily flight was the fastest growing route in Air UK's network, rising 7% - which amounted to 75,000 passengers.
Thousands of holiday-makers would face disruption at Gatwick when hundreds of engineers started a go-slow in July. The former Dan-Air Engineering employees who now worked for the Danish company FLS Engineering were responsible for the maintenance of Dan-Air and Airtours' fleets. Employees had rejected a 6% pay increase offer, but the engineers wanted a pay parity with employees who were based at Stansted and Manchester. Other airlines affected were Air UK (Scottish routes) Air UK Leisure, Aer Lingus, and Cyprus Airways.
The Norwegian airline Braathens who had entered the UK scene this year, reported that they had carried 43,000 passengers from April through November 1991, which was an increase of 117%. Dan-Air had withdrawn from operating between Newcastle and Bergen, Stavanger and Oslo, not wishing to engage in a price war. Braathens said: 'When we first entered the market there were nine flights a week and we increased that to ten. In the Summer we will operate twelve flights a week.' A significant number of passengers were carried on oil company related business.
For a third time Dan-Air were found guilty in court over the poor carriage of animals. The airline was charged with cruelty to four dogs. Two of the dogs were flown into the South Terminal in boxes that were too small, and all four were not tied down correctly. Mr. Brian Stone, prosecuting said: 'Dan-Air had broken its own code of practice to end injury and distress to animals in aeroplanes. the dogs which included a Collie, a mongrel and two cross-bred Collies were being flown all the way from Africa. A customs official told Crawley Magistrates Court that the dogs were in danger of being tossed about and after the flight had landed one of the dog boxes was found on its side.' Ms. Marilyn Scantlebury, Dan-Air's assistant company secretary said the airline had carried more than 1,000 animals in the last 18 months. She said that the company had now placed a total ban on animals flying into the United Kingdom. Dan-Air were found guilty of seven charges and were fined £4,800 and ordered to pay £80 costs.
Dan-Air's advertisement for the Newcastle-Gatwick service was brought to the attention of the Advertising Standards Authority - who ruled that the airline had misled the public with the advert. The Authority found that Dan-Air didn't operate the service at weekends and demanded that they make it clear that the service ran from Monday-Friday only.
Hearts fans had been given an amazing cut-price chance to fly to Czechoslovakia with their favourites for the UEFA Cup-tie against Slavia Prague on September 16th Tynecastle chiefs were facing a loss of up to £30,000 on the price of chartering a Dan Air Boeing 727 jet to the Czech capital after only 80 of the 180 seats were booked - 30 of which were taken by the Hearts travelling party of players, coaches and officials. The club chairman Wallace Mercer announced that Hearts would cut the price of flying to support Hearts in Europe by almost half in an attempt to offset the cost of the charter. Prices had been advertised at £380, but the price were reduced and would include flights, hotels, transfers and entry into the arena for the bargain-basement price of £200. Club Chairman Wallace Mercer said: 'This is thank you to all our fans for following us in times of difficulty. But it is also a practical step because 100 empty seats on that aircraft would have cost us between £20,000 and £30,000. The fans and executives would be getting a better deal as they would be upgraded to club class at no extra cost to them.'
July was a popular month for prawn lovers, according to Dan-Air. A record 55,513 kilos of live and fresh prawns from MBBS. Exports in the Isle of Skye were being shipped on Dan-Air 'planes from Inverness to markets in Barcelona, Madrid and Rome. Other record freights sent overseas last month included Scottish smoked salmon and chanterelle mushrooms sent to satisfy the taste buds of the Paris and Geneva markets.
Vic Sheppard who had been a manager with British Caledonian before joining Dan-Air had recently left the company and went public with his ambitions to start a new airline - First European Airways - Sheppard had been responsible for Dan-Air's operation to Paris and Nice from Gatwick. He claimed to have raised £6.5 million of the £8 million he needed to start the airline. They would be operating to Nice and Paris from Gatwick he told press. His company comprised of an experienced ex-British Caledonian and Dan-Air staff. David James, Dan-Air's Chairman was furious when Sheppard's plans were revealed. He argued that First European would make a loss forcing Dan-Air into making losses too. Sheppard argued that the flights would merely restore the competition that had been missing since the demise of Air Europe. The CAA awarded First European Airways a licence, but our research indicates that the airline never got off the ground and Vic Sheppard moved to Emirates airline.
Holiday-makers at Newcastle were furious on Sunday July 12th when their Dan-Air flight to Malaga was delayed twelve hours and their baggage was sent to Greece. The passengers were due to depart at 8:15 am but finally got away at 8:15 pm. by that time passengers had been at the airport for 15 hours. Technical problems kept flight DA 2186 on the ground while their luggage was placed on another aircraft by mistake. A Dan-Air spokesman said: 'We regret this happening at the start of their holiday for these people. In the event, we had to keep them at Newcastle to wait for their luggage to be returned to Newcastle, so that they could start their holiday with their luggage. The technical issue only took two hours to be resolved. It was the fault of the handling agent that the luggage was inadvertently re-routed.'
The Daily Express joined Dan-Air for their two-for-one offer, with Paris being the final destination in their deal. Two passengers could travel for only £139. The offer was extended for other UK airports with a Dan-Air connection to Gatwick. - Manchester £225 - Newcastle £271 - Jersey £239 - Aberdeen £303 and Inverness £303 which included a Speedlink shuttle between Heathrow and Gatwick.
Tour Operator Avro Tours sued holiday-makers for missing their flight home after the jet took off five hours early. in what was every package tripper's nightmare in reverse. Instead of waiting in the crowded departure lounge the 80 passengers heard that their flight had already landed in Gatwick. Avro Tours said they should have checked their flight details, before sending them a bill to help pay for the £11,000 cost of sending another jet to Malaga to pick them up. Twenty-eight of the passengers objected to the payment and were expected to face a show-down with the company at a hearing in Kingston Upon-Thames. Avro, who were Britain's biggest flights-only company said they had to bring forward the original departure time because of technical problems with its chartered Airbus belonging to ZAS Egyptian Airlines. The 80 passengers were stranded at Malaga Airport. they flew home the next day day on a specially chartered Dan-Air aircraft. The company claims that they all agreed to pay a 'token' £100 towards the cost, but when they got home, some of them failed to pay up. Passenger Alan Burke said he had phoned Avro and had been told that the aircraft was departing as scheduled at 5 pm.
Dan-Air's much anticipated Gatwick-Cairo service was given the green light for January 1993 following lengthy negotiations between the two national Governments. The initial flights would be three flights a week using Boeing 737 400 aircraft in a two class configuration. Dan-Air claimed the demand for Egypt had bounced back following the Gulf War. The two for the price of one ticket offer was rolled out for Jersey and Paris flights on July 13th.
Harassed holiday-maker John Haslam had not seen the world in 1992, but his suitcase had. For while John jetted off from Gatwick for a fortnight's holiday in Turkey, his suitcase went to Sicily before heading to Frankfurt and eventually to Addis Ababa in Ethiopia. The case even made a stop at Izmir in Turkey. On August 7th he was back home in Nottingham but his suitcase was still doing a tour of the world. John said: 'I couldn't believe it when I heard where it had been. It is everyone's worst nightmare, to lose their luggage.' Three days after arriving home his luggage had still not been traced. A spokesman at Gatwick Airport said: 'This must be one of the best travelled suitcases in the world. We are not sure exactly where it is. We think it might be in a bomb-proof container in Germany.' John said he was now preparing to do battle with Dan-Air and Thomsons in order to get some compensation. A spokesman for Thomson said: 'I sympathise with him, but this is really an insurance matter.' A spokesman for Dan-Air said they were looking into the matter.
The Dan-Air Boeing 727 flight simulator took off briefly in August when it was lifted by crane from the airline's training facility in Horsham. the simulator was making its way to Bristol University. The twelve ton Boeing 727 100 series simulator had been with Dan-Air for 18 years and was used to train hundreds of its own and other airlines' crews, completing 18,000 training hours. It was built in 1965 by Redifon in Crawley for Japan Airline and was based in Japan until 1974 when Dan-Air bought it. As the type was being phased out by the airline, it was donated to the Department of Aerospace at Bristol, where it would be used by students on a three year Aerospace Engineering course. Deputy chief training pilot at Dan-Air, Captain Jim Adams said: 'We hope the simulator will make a worthwhile contribution to both Bristol University and the aviation industry in general.'
Above: The Dan-Air 727 Simulator leaves Horsham.
A former Dan-Air stewardess claimed her life and career had been ruined by Dan-Air! Gwendoline Wright claimed that she was forced to work whilst suffering from hay fever. she also claimed that she lost a £10,000 a year job at Virgin after announcing she was planning to sue Dan-Air for negligence. Gwendoline stormed: 'My whole life has been ruined by this company, I will never be able to fly again. How can a company with a £30 million turnover (Her incorrect figure) justify mucking someone's life up and not be prepared to do anything about it?'
She said that doctors had told her she shouldn't fly in her condition, but she claims she had to because of staff shortages. 'They didn't have anyone else on standby and another girl called in sick, so I had to fly, and now my ears are damaged.' Gwendoline said that she had since been to see a psychiatrist and had lost a stone in weight because of stress. A Dan-Air spokesman said: 'We never force our staff to fly and any telephone call made to Virgin about her job is untrue.' A Virgin spokesman said: 'We never had a call from Dan-Air about Miss. Wright, she left us because we didn't feel she was suitable after her probation time ended.'
On September 16th Virgin Atlantic announced that they were looking into expanding their flights into Europe and providing domestic services to feed their Gatwick flights to America, prompting rumours of a link-up with Dan-Air. Virgin had applied to operate flights from Inverness to Heathrow and Gatwick. Virgin also applied to fly from Heathrow and Gatwick to Maastricht, Amsterdam and Athens. This sent alarm bells to Dan-Air whose Inverness service was among their most profitable routes. They also flew from Gatwick to Amsterdam and Athens. Virgin had previously operated into Maastricht but withdrew from it in 1989. They had provided flights using an ageing Viscount and passenger numbers were poor. They had tried to upgrade the service by sub-chartering British Island Airways' BAC 1-11 jets. A Virgin Atlantic spokesman refused to comment on why the airline had applied for the licenses: 'It's too early to comment.' said Wilf Whitehorn, but he added: 'We have been approached by a number of operators to start new short-haul part charter part scheduled services and we are looking at a number of routes. Dan-Air's Chief Executive John Olsen said: 'If anyone else wants to operate it, they are free to try, but I don't think they will find it expandable to that degree.' The move was seen by industry analysts as a possible way to bring the two airlines closer together. 'Dan-Air are looking for an injection of cash and Virgin are looking for an airline to feed their flights into Gatwick.' said one.
On September 21st it was reported that Virgin Atlantic had been involved in preliminary talks with Davies and Newman. It was claimed that the talks had taken place after talks between Davies and Newman and British Airways had taken place in August, but had broken down. The leaking of such sensitive information was once again highlighted as a cause for concern.
Bristol Airport director Mr. Les Wilson went public with his knowledge and said he was keen for the two carriers to merge. He said: 'Dan-Air used to run the bulk of our scheduled flights to Europe but gradually the reduced their flights. They are still responsible for about 50% of the check-in desks here and they look after Air 2000, Air UK, Brymon, Jersey European and KLM.'
The next day, Virgin issued a statement saying: 'The have been no talks between Davies and Newman - Dan-Air's parent company - and ourselves with regard to a merger. Nor has Virgin received any proposal regarding such a merger or other equity partnership.' But the statement went on: 'Following an approach by Davies and Newman a preliminary discussion has taken place between the two airline groups about further possible opportunities for marketing and promotional links at Dan-Air's Gatwick base.'
Hunky police sergeant Paul Drake went to a Dan-Air office for help in tracing a villain - and was greeted by cries of 'Get 'em off!' - Staff thought he was the stripogram they had booked for a stewardess's farewell party. Paul, 28, was at Gatwick to see if workers recognised a picture of a gunman. He knew it was a, case of mistaken identity when they urged him to bare all. But the personnel manageress said later: 'We may ask him to appear as the real thing next time.'
On the 24th September Virgin Atlantic's boss, Richard Branson disclosed that he was looking for a joint operation with Dan-Air's extensive European network to give travellers to and from the USA better connections for onward travel. The link-up would initially be a matter of the two airlines using a joint reservations systems, but the possibility of a single new airline has not been ruled out. Dan-Air had until the end of October to renegotiate loans from its bankers or face questions about its future.
Manchester based Airtours bought the Pickfords chain of travel agents on September 23rd in a deal worth £16 million. The deal would see Airtours in a similar position to Thomsons with their Lunn Poly shops. Pickfords had 316 shops throughout the country and would give priority to Airtours programme.
On September 24th worries that British Airways would be hit by news that Richard Branson was negotiating a rescue package with Dan-Air proved unfounded. Shares in Davies & Newman were suspended at 23 pence before trading started while talks were being held. While BA remained virtually unchanged at 299 pence despite dipping by 1 pence earlier that day.
Davies and Newman shares had dropped as low as 21 pence which was a far cry from the 550 pence price just two years prior. David James denied that the Civil Aviation Authority (CAA) were on the verge of closing down Dan-Air. Saying that the company needed funds for future expenditure. Virgin's shareholders would be given the option to invest and the aircraft in Dan-Air's fleet would be used primarily as feeder flights for Virgin Atlantic flights worldwide. In return Virgin would re-brand Dan-Air as Virgin European Airways and provide operational and marketing support. The Dan-Air name would disappear. Meanwhile it was revealed that Peter Ryan, Dan-Air's Deputy Chairman was found to have seven other jobs as a none executive director. Dan-Air said of the merger talks that there were no plans for Dan-Air and Virgin to merge or for Dan-Air to be taken over. They were, they explained, 'Talks aimed at getting financial backing. Flying operations would continue as normal.'
Regional airline Gill Air won BP’s five-year contract to operate charter flights between Scatsta and Aberdeen. Dan-Air, who had the contract to fly personnel to and from Sullom Voe Oil Terminal for the last nine years, made their last flight on September 30th. According to terminal spokesman Peter Guy, Dan-Air would soon be selling all their 748 aircraft, which is the largest aircraft that can use the airstrip. This would mean the company would have no other aircraft able to land at Scatsta. Gill Air, who begin their contract on Thursday, will be using the smaller Shorts 330 aircraft for the journey. These can seat 22 passengers, 26 fewer than the 748 aircraft. For this reason, said Mr Guy, Gill Air would be making eight weekly round trips, compared with Dan Air’s five. Gill Air beat five other companies for the contract and Mr Guy said that they had 'offered a service which is compatible with the industry’s requirements'.
On September 28th David James issued a message to shareholders to say that "Talks of a merger between the two airlines was untrue - they were to result in co-operation between the marketing and operational activities of the airline." He strongly denied reports that Dan-Air had been threatened with the loss of its licences. He also described talk of the loss of hundreds of jobs as 'pure speculation'. Losses for this year were now forecast at £60 million.
James denied that the airline was about to close that same day, claiming that the airline needed financing to 'meet anticipated expenditure'. The proposed deal would see the Virgin name on Dan-Air's fleet of aircraft, but would stop short of a merger. Rumours had suggested that the new Dan-Air would be called Virgin Elite.
Analyst said that an alternative would be for Virgin to run Dan-Air’s services in return for a management fee: 'The outcome of the talks By Richard Shackleton will depend on shareholder approval for Branson taking a stake in Davies & Newman. Baring’s Bank - the company’s - adviser, said the talks. would also need to involve the banking syndicate led by Lloyds, which is finalising the company’s annual cash requirements. The City believes a deal with Virgin would help persuade large investors to provide funds.' David James denied City reports that Virgin’s involvement came as the Civil Aviation Authority 'There is no “question of' creditor pressure. All I ask for is a period of peace and quiet to get on with the business.'
Before Mr. Branson came forward on September 24th with advanced proposals, James was set to ask shareholders for £30 million by way of a rights issue. Despite there already being two refinancing packages. It was rumoured that Tour Operators were holding back chartering Dan-Air aircraft for the 1993 season, as they awaited the results of the Virgin meetings.
While a full merger had been ruled out it was predicted that all 42 aircraft in the Dan-Air fleet would bear the Virgin name. If a deal was struck it was feared that hundreds of job would go, but without a deal Dan-Air was still in trouble.Dan-Air said: 'There is good chemistry in a possible combination between the strong operating skills of Dan-Air and market creativity of Richard Branson.'
The last Scatsa flight departed on 29th September. A BP spokesman said: 'It's a sad day, we have worked with Dan-Air for nine years. We had no intention of ending our working relationship. It was a fact that Dan-air said they were selling the aircraft and wouldn't be able to carry out the flights any more'
A former BP manager who wished to remain anonymous, told this site:
'I can't say what went off word for word in our dealings, but they were very dismissive of our plans, which firmly included Dan-Air. We had worked together for nine years and there is no doubt that they were exceptional with their ability in this very unique field. We had been told in a fairly informal meeting that it was unlikely that they would renew our contract. But a meeting was scheduled, before we met with Dan-Air the final time, we at BP had a few suggestions. One included them leasing new aircraft for the role and the other was the formation of a separate division within the airline, called something like Dan-Air Oil Supply. It would be a fairly straight-forward thing for them to do. They already had everything needed apart from training the flight deck on a new aircraft type. The stewardesses would also need a familiarisation we supposed. For all of those nine years Dan-Air had made a large profit on these services. You don't have upwards of thirteen aircraft based in one place for nothing. If a new airline was being guaranteed five flights a week with one aircraft, at a rate that was profitable for them, they would normally have bitten the clients hand off. Dan-Air didn't - they just went on about them being a scheduled service airline operating a jet only fleet, and that these charters were not in line with their plans. You could have knocked us all over with a single feather. We just couldn't see why any airline would refuse work that was 100% sure to make them money. The aircraft would have been able to undertake normal flights outside of its work for us. We had talks with five other airlines and they didn't have what we needed. The Gill Air flights would actually be worse for us than before, but it was the best of what was on offer. There was a relatively new type of British regional airliner called the ATP which was very similar to the 748, but it was far more efficient and carried more passengers. British Airways were using it. We could not understand why when we mentioned this to Dan-Air, that they said they wouldn't consider introducing it into their fleet. We all knew that the Shetland flights were going to be phased out eventually, and this would have been a final, very profitable hurrah.'
British Midland Airways applied to the Civil Aviation Authority to take over Dan-Air's Inverness-Heathrow service on September 30th. The local council were keen that Heathrow remain as the preferred Inverness-London link and wanted to maintain the number of daily return flights and times. The council's Director of Roads Philip Shimmin and Transport said: 'Since Dan-Air took this route over, the business community and travelling public have received a first class service. They established a high load-factor which was impressive indeed and high-lighted the importance of maintaining current levels of service. Over the years the public have demonstrated their wish to use Heathrow, and this will be foremost when we are speaking to airlines.' It should be pointed out that Dan-Air had not left the route, and were still operating normally.
On 10th October it was rumoured that Branson was only willing to invest £10 million in Dan-Air and even then he would like to see Dan-Air stripped back to a core network of highly profitable routes and feeder routes for Virgin Atlantic. Dan-Air were looking for heavier investment of up to £40 million. David James said "One way or another, some sort of proposal will come out to try and save Dan-Air." Industry analysts speculated on TV that Dan-Air would need up to £60 million investment. This was in total contrast to the statements James had made last year that spoke of the 'certainly Dan-Air would be saved'.
The talks between Branson and Dan-Air broke down on 13th October with Dan-Air saying they were 'Greatly appreciative of Virgin's interest, but an agreement could not be reached. Davies & Newman announces that it no longer in talks with Mr Branson. The board also advises it is now in discussions with another party but is unable to disclose the identity at this stage.'
On October 1st it was reported that the Civil Aviation Authority were worried about mounting debts of £50 million at Dan-Air and predicted losses of £5 million. Rumours circulated that the airline was about to close down after a banking consortium refused to provide a third refinancing of the airline, which would have needed to have been completed by October 31st. Press reports said that a preliminary agreement was struck after a four hour meeting between Richard Branson and David James at Barings Bank in London the previous week. Further meetings were scheduled for the following week with the aim of setting up a holding company jointly owned by Richard Branson and Davies and Newman. all of Dan-Air's assets would be placed in that company. It was believed that out of that holding company a new Dan-Air would emerge, possibly with the name Virgin Elite, which would fly alongside Virgin Atlantic as a semi- independent carrier. According to plans the new Dan-Air would share computerised marketing and reservations systems and reschedule its extensive European network, so that passengers could walk straight from a European flight onto a Virgin intercontinental one.
Virgin said that if Dan-Air remained an independent airline then they would be happy to work with it as a feeder carrier and they would not enter the short haul market to compete against it. But that if Dan-Air tied up with a mega carrier then Virgin European would be borne. It was reported that the Government was keen to see Dan-Air taken over by British Airways as it would avoid a repeat of the Air Europe collapse the year before. It was highly unlikely that British Airways would be interested in Dan-Air's charter operations.
Dan-Air returned to Forte to provide catering on their scheduled flights on October 7th. After an absence of less than one year.
A company Boeing 737 suffered a loss of cabin pressure on October 12th. Passengers clung on as the Captain of the jet dived 17,000 feet in a minute because of a pressurisation fault. A seal fault caused decompression in the luggage hold on the flight to Turkey. Holiday-maker John Pilliner from Chester said: 'One minute we were at 27,000 feet and the next we dropped to 10,000 feet.' The jet returned to Manchester where an official said: 'The passengers were never in any danger.'
Richard Branson flew to London for further talks with David James from Dan-Air on October 9th. the talks were reported as being to 'trash out' a deal to save Dan-Air. Press reports said that James was eager to gain equity as well as marketing support from Branson in order to sweet talk shareholders into forking out £50 million cash to buoy up the company. The deal would have to be attractive as shareholders had been asked to stump up a similar amount the year before. Branson was believed to be offering £10 million of his personal money for the potential deal. But after closer analysis of the routes, Branson was said to have considered parts of the network unsaleable. Any deal was likely to focus only on profitable routes. One analyst said: 'If Branson pulls out this weekend Dan-Air faces the prospect of going belly up.'
On October 12th it was reported that talks with Branson had broken down and that discussions were underway with another party, rumoured to be British Airways. Dan-Air issued a statement saying: 'The Board are greatly appreciative to Richard Branson's interest, sadly we were unable to reach an agreement. the Board announces that it is now in discussions with another party, but it is unable to disclose the identity at this stage. Flying operations will continue as normal, although shares remain suspended while new negotiations continue.'
Press reports said that British Airways had spent four months earlier in the year examining Dan-Air's books, but finally walked away. That day British Airways said they could not comment on speculation about fresh talks. Davies and Newman said that the talks with Branson had been 'amicable' but the two parties had decided not to continue.
The following day it was reported that Lord King, Chairman of British Airways was 'poised to swoop in' just hours after talks with Branson had broken down. Reports claimed that British Airways had to decide if taking on Dan-Air's debts was a price worth paying in return for valuable new routes. A Virgin spokesman said: 'If Dan-Air continues as an independent airline without any tie-up with a mega carrier, then Virgin will work very closely with it, and stay out of the short-haul market for the foreseeable future. If Dan-Air ties-up with a mega carrier then Virgin European will be born.'
It was claimed that one of the problems British Airways were concerned about was a possible referral to the Monopolies and Mergers Commission should British Airways take over Dan-Air. Those fears were also expressed by the Chairman of British Midland, Michael Bishop who was said to view a merger 'with concern'. 'It has been reported that BA would seek prior assurance that any rescue package would not be subject to the Monopolies and Mergers Commission. At this stage we are aware that these reports are speculative. However, we wish to make clear that our position, that we would call for any agreement between Dan-Air and British Airways be subject to open investigations by the MMC and the EC regulatory authorities in Brussels. We believe that these authorities will need to be satisfied that any transaction between Dan-Air and BA would not be anti competitive or have a detrimental effect on any other UK airlines. If there were any evidence that the agreement might serve to entrench further BA's dominant market position a the UK's two principle airports, Heathrow and Gatwick, we would expect the authorities to take the appropriate action.
Discussion with British Airways had continued up to October 22nd with industry insiders claiming that the focus was on how British Airways could absorb their own loss-making European routes out of Gatwick into those of 'stricken' Dan-Air. this would involve a major shake-up of British Airways' operation at Gatwick to increase the airline's low cost advantage over its European rivals. Such a move was unlikely to remove the threat of job losses at Dan-Air. in the light of Dan-Air's predicted £30 million losses, savings would have to be made, and British Airways were said not to be interested in Dan-Air's charter operation. Dan-Air Horley offices employed 574 people and a spokesman said: 'There has been no message to staff about their jobs. Everyone is just waiting to hear. There is quite a good atmosphere.'
It was announced on October 30th that British Airways was to take over Dan-Air. Between 1,400 to 1,600 jobs were to go at Dan-Air. All of the scheduled services from Manchester to Aberdeen would cease and the charter division would be axed. flights between Manchester and Gatwick would be saved. British Airways had paid a nominal £1 for Dan-Air's company Davies and Newman, but it would also get the company debts of nearly £30 million. There would be between 400 and 600 staff taken on by British Airways. The Dan-Air Board said: 'The Board have been compelled to conclude that it would not be possible to continue.'
All tickets and reservations would continue to be valid. The name Dan-Air would disappear. Chief Executive Colin Marshall said: 'We regret the circumstances which made the future so uncertain for Dan-Air . It has been bad news for a good airline.' The scheduled services would be cut down to the bone with half of the scheduled services axed. The services that would continue would be Gatwick - Aberdeen, Athens, Brussels, Madrid, Manchester, Montpellier, Paris, Rome, Toulouse, Vienna and Zurich. Gone would be Barcelona, Perpignan, Gibraltar, Innsbruck, Berlin, Amsterdam, Lourdes, Oslo, Jersey, Newcaslte, Tees Side and Stockholm. the London Heathrow - Inverness service would also be retained.
Dan-Air had lost £73 million over the last two years and agreed to dispose of 26 of its 38 aircraft.
The following day Davies and Newman said that without the rescue deal it was almost certain that Dan-Air would have gone into receivership. Chris Darke, General Secretary of the pilot's union BALPA said: 'All I can say is it is better to save 500 jobs than a total collapse. but however you look at it 2,000 job losses is a terrible price to pay.' About 300 of Dan-Air's pilots would lose thier jobs. BALPA said they would be asking for an immediate meeting with British Airways, aimed at limiting the cutback. Four out of every five air and ground crew would lose their job. Britannia Airways asked the Office Of Fair Trading for a full investigation into the 'competitive implications'. Britannia's deputy managing director, Bob Parker Eaton said: 'Allowing British Airways to salvage what it wants from the wreckage of Dan-Air without scrutiny will distort competition.'
Sir Michael Bishop of British Midland said: 'We shall be seeking the most vigorous scrutiny of the transaction.'
And Richard Branson said he would be forming Virgin European Airways. David James of Dan-Air said: 'I think what has happened is an unfortunate outcome, although it is infinitely better than the awful alternative of receivership. Without the take over, the airline would almost certainly have gone into receivership. We have achieved something from the wreckage, but it certainly not the result I would have foreseen a year ago'
Five major Tour operators had charter flights arranged with Dan-Air - Owners Abroad, Avro, Airtours, GTF and Thomson. Along with a host of other smaller Tour Operators. Those flights were quickly snapped up by Air 2000, Britannia and Monarch.
With immediate effect the airline was absorbed into British Airways although Dan-air flights for the time being would continue. British Airways said in a statement. 'We do not intend to use the name Dan-Air although it was a great name and it is sad to see it go.'
'The Take over of Dan-Air is damaging to competition and choice for European air travellers.' So said British Midland's Sir Michael Bishop. he said he was sorry to see the end of one of the most well established airlines in Britain. 'I am particularly distressed at the major job losses as a result. It is clear from subsequent events that totally inadequate safeguards for other British airlines were adopted by the Government, both when British Airways was privatised and when it took over British Caledonian. British Airways has been allowed to establish a preferred and dominant position in the UK market, preventing fair competition from developing. This latest transaction with Dan-Air now threatens the Government's multi-airline policy, which ultimately is the only guarantee that the consumer can have to ensure real competition is sustained and fares are reduced. British Airways is no 'white knight' its purchase of Dan-Air's assets raises important implications for the industry and the consumer. British Airways is already the dominant airline at Heathrow and with this transaction it will have further entrenched its dominant position at Gatwick. This will be damaging to competition and choice to the European traveller. We have already made strong representations to the regulatory authorities both in the UK and in Brussels. We look forward to a rigorous examination of the crucial competition implications of the deal. This could well involve the substitution of British Airways by other British airlines on major routes at both London airports, a step for which there are established precedents. it is essential that regulatory authorities do not succumb, as on previous occasions, to British Airways' customary, regulatory blackmail.'
All staff were given redundancy notices on October 27th with a spokesman saying: 'It is normal for everyone to be made redundant when companies are being taken over. The new owner would be expected to take on some of the staff.'
Staff began to speak out, with one stewardess saying: 'It's devastating, we expected some bad news, but this is terrible. All the staff have worked tremendous hours, not always with the best pay and conditions, but there was a tremendous camaraderie. This is just like a large family being torn in half, This is a piece of British aviation history that's gone down the tubes.'
Dan-Air had slapped a ban on staff taking to the press, but some agreed to talk provided they were given anonymity. With one saying: 'There are still some Air Europe staff without jobs, so what hope is there for us? Dan-Air's reads like a casualty list from a war. Es British United, ex Air Europe, ex Laker, ex Caledonian and ex Orion staff all working here. Where can we go now?'
One staff member was bitter about how he heard the news: 'A friend of mine heard it on the radio and phoned me up, otherwise I wouldn't have known.'
Another said: 'A part of the problem is that we have never benefited from having a board of directors who have experience within the airline industry, who have no knowledge of it. And we have had the most appalling marketing.'
It was disclosed that by October 29th not a single employee had been notified if they would be getting a job with British Airways.
On October 30th a picture began to emerge of what British Airways were planning. Dan-Air’s share in Gatwick Handling was to be up for grabs. David James was said to have been making a last desperate attempt on October 19th to salvage as much of the airline and the almost 3,000 jobs as possible, his efforts were unrewarded as the majority of staff would lose their job. In the immediate aftermath Dan-Air flights continued to operate.
The Government were eager to avoid another announcement of mass redundancies, was believed to have given the move its tacit blessing.
On November 2nd the President of the Board of Trade, Michael Heseltine gave the official go-ahead for the take-over after he agreed that the deal would not be referred to the Monopolies and Mergers Commission. Whilst Richard Branson said that the Government 'must urgently review competition policy'. For his part, Lord King the Chairman of British Airways said: 'We are delighted, it is welcome and constructive news. We shall now persevere with developing our short-haul operations and assisting the further development of Gatwick as a major international airport.'
Total closure of Dan-Air would have a devastating effect on the Gatwick area. Dan-Air as Britain's second biggest airline and Gatwick's biggest user, handled over 18 per cent of the airport's traffic. Other smaller airlines, such as British Midland, Brymon Air, and City Flyer Express would be competing to snap up other routes. British Airways historically had trouble at Gatwick because of the lack of connection between their long haul flights arriving at the airport and onward European routes. Meanwhile major travel agents had been holding back tickets booked on Dan-Air scheduled flights until the last minute to prevent customers being hit if the airline went under. Travel Agent Michael Croft told us:
'It was not hidden within our office that I was a Dan-Air fan, I was gutted at what was happening. We could sometimes see this happen with airlines long before the public got wind of it - with the exception of Air Europe! But with Dan-Air it was plastered everywhere. I have never seen anything like it, before or since. For about three years it was never out of the newspapers. Dan-Air often had an image problem, and I really don't know where that came from. All the Dan Dare stuff. I think it became a term of endearment- but it was red reg to a bull to their staff. But the bad name stuck - Package holiday clients would sometimes reject flights with Dan-Air, but I always urged them to fly Dan-Air - especially if they hadn't flown them for a few years. Their European scheduled services were second to none, honestly they were spot on. The last year of Dan-Air was hard for us. The public were well aware of their troubles and were actively avoiding booking tickets on scheduled services. It must have been an impossible situation for staff to carry out their duties in the face of such uncertainty.'
At Newcastle, the final Dan-Air flight took off on November 3rd. More than a hundred staff based at the airport would be made redundant. The airline had been operating consistently out of the base since 1961. Over the 31 years Dan-Air had operated scheduled flights to 25 airports and 20 charter destinations. The final flight, DA 107 took off on its routine flight the London Gatwick. The aircraft, a BAC 1-11 was affectionately nick-named 'Smokey Joe' because of the amount of smoke blown from its engines on take-off.
Receptionist Joan Francis, who had worked for the airline for 17 years said: 'It's a big loss fro the North East, our regular passengers will be sorry to see us go. I am fortunate that my husband has his own haulage business and I don't have to support myself. But other people don't have a job to go to.'
Captain Alan Stanford was at the controls for the flight which took off in heavy wind and rain. Captain Stanford, who had seven years service with Dan-Air said: 'It's very sad, after operating this service for many years, its loss will hit a lot of people very hard. I've enjoyed my time in Newcastle and I don't have another job to go to. Finding another job is bade enough at this time, but it's particularly hard in the aircraft industry. I don't think things will look up until spring.' CityFlyer Express would take on the route because British Airways did not want to keep it. CityFlyer would operate it the same way at Dan-Air, however pure-jet flights would stop with CityFlyer opting to use ATR 42 prop-liners.
Above: Newcastle staff bid farewell to 'Smokey Joe'
The take-over even upset the schedule of Liberal Democrat leader Mr Paddy Ashdown. He was due to speak at the conference on October 30th. However, the speech was brought forward by a half-hour because his flight north has been cancelled by new Dan-Air owners British Airways. More than a few regular Highland commuters would have been sad to learn of the demise of Dan Air. The carrier who stepped in to provide a service between the Highland capital and London when British Airways left them in the lurch, and had to throw in the towel. It had been British Airways who could only sit back and watch as Dan Air turn the route they had give up into a profit-making concern. f The North Star Chronicle offered consolation for the Inverness based staff who had found themselves out of a job. 'They will all be fondly remembered, both air crew and ground staff, for their smiling and attentive service, by an awful lot of people who took to the skies with them over their too short service to the Highland travelling public. Will British Airways carry on where Dan Air had to leave off? Only time will tell, and it will undoubtedly be an anxious time for north travellers as they wait and wonder about their travelling future from capital to capital.'
On November 3rd The green light for British Airways came on when the President of the Board of Trade, Michael Heseltine, decided not to refer the deal to the Monopolies and Mergers Commission. But Richard Branson, chairman of rivals Virgin Atlantic, said the - 'First Laker, then British Caledonian, then Air Europe and now Dan-Air. A Government that supports competition must urgently review competition policy'
For his part, Lord King of British Airways said: 'We are delighted. It is welcome and constructive news. We will now persevere with developing our short-haul operations and further developing Gatwick as a major international airport' Virgin, together with British Midland Airways, considered that the take-over would give: 'British Airways an even more dominating' position within UK aviation.' Sir Michael Bishop, Chairman of British Midland Airways, said the go-ahead for the takeover was bad for the air industry in Britain saying: 'The decision is harmful to the consumer and the interests of the majority of British airlines. It leaves the Government’s airline competition policy in disarray. Dan-Air was Gatwick’s main airline and it was the effect on. airport that prompted Mr. Heseltine to reach his conclusion following. the recommendations of the Director-General of Fair Trading. He said he understood the issues but concluded that the public interest would be better served by not referring matter to the MMC.
British Midland Virgin Atlantic and Air UK objected to the merger and asked the Government and the European Commission to examine the takeover amid claims that it would lead to further domination of domestic airline business by BA But the EC said last week that the rescue of the Gatwick-based airline did not fall within its jurisdiction for a competition investigation A spokesman for Virgin said: 'We are disappointed that there was not an opportunity to save more jobs.' and added that Virgin was taking up the matter of the fairness of take-off and landing slots at UK airports with the European Commission 'We shall carry on the fight for individual airlines in this complaint to the EC.' he said.
Dan-Air staff based at Bristol Airport were still waiting to hear about their future The Consumers Association said it would discuss today whether to ask the European Competitions Director if he had any powers over this 'staggering' decision. in Aberdeen there was more bad news after British Airways revealed that all of the 90 Dyce and Inverness staff were to be made redundant as part of British Airways’s takeover. Calls for a review came from Liberal Democrat MP Malcolm Bruce whose Gordon constituency includes Dyce airport. Mr Bruce says originally it had been indicated some staff would be retained. But Dan-Air management has told workers that British Airways intends shifting operation of the Aberdeen-London service to Gatwick. The MP hoped to arrange a meeting with British Airways to discuss changing their plans. 'British Airways needs to show some sensitivity,' he added. At the same time he wanted the Government to take a fresh look at the way the takeover is being conducted. Mr Bruce has written to Mr Heseltlne, the Monopolies and Mergers Commission and the Office of Fair Trading.
Employment chiefs pulled out all the stops to try and help axed Dan-Air staff find new Jobs. Two emergency centres have been set up to advise the 1,100 staff made redundant at Gatwick on Interview techniques, claiming state benefits, and lob vacancies In the area. From the beginning of November an Information point and jobs display was set up by the Employment Service next door to Gatwick's Job Centre. Employment Service Area Manager, Ray Nash said: 'Ail those who register for employment will be matched against future vacancies at Gatwick and other airports. We are also discussing with the Training Enterprise councils what additional help can be provided, perhaps In the form of Job Review Workshops, Job Search Seminars and special training.' Since the collapse of Air Europe In 1991, 90% of the 1,900 staff made redundant have now found jobs. But things could be tougher this time with the recession still biting hard and Crawley's Jobless figures on an upward spiral. Staff at Dan-Air's headquarters have also set up a centre In Newman House to advise on all aspects of employment. Chief Training Officer, Brian Abiett said: 'This unit, manned by staff volunteers has so far been very well received, we have had a lot of support from outside organisations and the unit forms a good focal point for local employers Interested In seeking good experienced and professional staff.'
The Consumers’ Association held an urgent meeting on November 4th. Their assistant director Derek Prentice said 'In view of the British Government’s commitment to competition it is unbelievable.' he said, claiming that the Government had chosen to 'ignore' the competition aspect with its benefit of cheaper air fares for consumers. The Director General of Fair Trading said he agreed the merger raised competition issues but concluded the public interest would be better served by not referring the deal 'It was generally understood that there was very little chance of the deal being referred to the MMC Indeed British Airways would almost certainly have pulled out of negotiations if it had thought a referral was likely.'
There was one ray of sunshine in all the gloom surrounding Gatwick on November 4th. The independent German airline RFG launched a new service to Dresden, in East Germany, in a deal that could create jobs. Airline spokesman John Ellis said: 'It won't create any new jobs immediately but obviously as it’s the only direct route from the UK to Dresden it should help stimulate the local and national economy.'
Staff at Gatwick Handling were told that business was down 50% since Dan-Air was sold. Gatwick Handling employed 1,200 people and up to 600 jobs were on the line unless new contracts came before February. Even if new contracts were forthcoming the company said they were looking at reducing staff numbers by at least 400. The company faced a 90 day consultation period while it considered its next move.
Sir Michael Bishop, Chairman of British Midland had predicted that 3,000 jobs losses was a realistic outlook. It came as British Midland, Britannia, Air UK and Virgin had led a failed bid to stop the take-over. They had told that when British Airways took over British Caledonian they had been forced to give some routes up to other airlines. Now they said that they had got the slots back and now had 30% of all flights from Gatwick and up to 100% on some Heathrow and Gatwick's services. Virgin complained that they were unable to expand because they couldn't get slots at Gatwick.
There had been redundancies as well at Gatwick aircraft cleaning company Fernleys who were unsure about how many jobs would go. Forte who had recently signed a new catering contract with Dan-Air said that they would be forced into making redundancies should British Airways not honour the contract.
New legal challenges were being raised on November 4th at moves to sack Dan Air’s Aberdeen staff in the next ten days. British Airways may have been in breach of the law, according to one Grampian MP. All 35 Dan Air staff based at Dyce Airport were given a fortnight’s notice taking effect from October 31st. But Kincardine and Deeside MP George Kynoch believed the timing was illegal. 'I simply don’t believe what is proposed is permitted.' He pointed out that under present employment laws, large companies with over 100 employees were compelled to give a 90 days consultation period when making redundancies. Mr Kynoch challenged Dan Air’s legal director to explain the rushed redundancies, which threaten to put the entire Aberdeen staff on the dole queue by the weekend. 'Unless they have found some way around the law, which I cannot imagine, then they must abide by the law.' he added.
Later that day British Airways was urged to rethink plans to sack Dan Air staff at Aberdeen Airport. Liberal Democrat industry spokesman Malcolm Bruce MP calling on British Airways to reverse its plans, warning that failure to do so could cost the airline thousands of pounds year. Kincardine and Deeside MP George Kynoch also believed that British airways may well have been breaking the law. The two Members of Parliament were calling for a meeting for British Airways to explain why they were concentrating their operation at Gatwick and closing down bases like Aberdeen: 'The staff at Aberdeen are feeling extremely fed-up. They are mostly highly trained people who are based in Aberdeen and do not wish to go anywhere else.' Malcolm Bruce said that training staff at Aberdeen would also save BA money: 'British Airways are planning to overnight their London based staff at Aberdeen which would cost £20,000 a year per crew member.' Tory MP Mr. Kynoch said he had written to Dan-Air's legal services director David Herbert about the plight of nine staff who lived in his constituency. He said: 'It does appear to be a situation where a large national concern is simply sweeping employees to one side. I appreciate that British Airways has come in and saved the day, but in so doing, they must remember that they have obligations to their workforce which must be fulfilled.'
It was a measure of the loss felt by air travellers throughout the North that the final flights by Dan Air staff on the Inverness-Heathrow link saw passengers and cabin crew In tears. Among those who freely admitted crying as the captain on her Inverness bound plane reminded a crowded aircraft of the situation facing the soon-to-be redundant staff was Moray MP Mrs. Margaret Ewing. She agreed that the demise of the airline which had served the Highlands for eight years was even more of a tragedy because it was unlikely that Inverness Airport would be retained as a major base by British Airways. While the service was being operated and flown by British Airways using a similar Boeing 737 aircraft, most of the 51 employees who ran the route from Inverness were unlikely to be offered jobs. The scale British Airways operation at Inverness was to be considerably smaller than Dan Air’s, with staff running the Heathrow link from bases in Glasgow and even further south. Mrs. Ewing, who travelled to and from her constituency regularly on the airline, contributed to an impromptu collection on the flight which generated £212 for the staff. 'Like them, I shed tears,' she said. She was full of praise for the airline staff, who she said had given Highland air travellers sterling service for many years. There had been hopes that Dan Air’s station manager, Mr Garry Dominie, and his staff would have been offered employment with the new operators of the route, but this week most admit they have 'no hope' and are facing a bleak future in the jobs market. Meanwhile, pressure was being maintained on British Airways to continue running the Heathrow-Inverness route at its current level, and to offer as many jobs to former Dan Air staff at Inverness as was possible.
On November 6th staff at Inverness made their way to work for the last time, with the news that only 10 employees had the chance of keeping their jobs under the new British Airways management. Of the 50-plus staff at Dalcross, ten ground crew were being retained until the end of November to help smooth the British Airways changeover period. However, their long-term future hung in the balance and a senior Dan Air employee said that, even if they were to be kept on by British Airways, some would be facing a large drop in salary. Dan-Air airport manager Mr Gary Dominey, who would be unemployed as from that night, said be believed there was a good chance for ten ground staff to be re-employed after November 30th. But added: 'If they are kept on, they will be employed at foe lowest level and at foe bottom of the pay scale. Obviously everyone is different, but regardless of their position in Dan-Air, they will start at the bottom with British Airways.' Mr. Dominey said morale was pretty drastic among the Dan-Air team at Inverness and many were finding it difficult to come to terms with the situation. 'Everyone is down,”'he said. 'The sad part about it is that we were one of their strongest routes. If it had not been successful and we had in any way contributed to the company’s downfall, it might have been a bit easier to accept. However, we have to fold and there is nothing we can do about it.’ Mr. Dominey, who has worked with Dan Air for 19 years and in Inverness since 1983, said BA had given an assurance that it would retain the Inverness link with Heathrow, despite fears of a switch to Gatwick.
The Members of Parliament demanding a meeting with Dan Air bosses over the plight of the airline’s staff based at Aberdeen Airport said in the evening on November 6th said Dan-Air was adopting a 'hasty and cavalier attitude' to its staff. His comments were prompted by a letter from Dan Air chief executive Mr H. B. Olsen. Olsen was alleged to have stated that Dan Air was doing everything 'reasonably practical' in handling the future of its Dyce based staff. But Mr Kynoch and other local MPs, including Mr Bob Hughes (North Aberdeen) and Mr Malcolm Bruce, believed the company was not going through the correct redundancy procedures.
November 6th also saw the last 'Dan-Air' flight from Aberdeen to Gatwick - British Airways pledged that there would be no change in the number of flights between Aberdeen and Inverness to London. In total, 90 Dan-Air staff including flight crew, ground crew and engineers went to both Scottish airports to bid farewell to their aircraft. British Airways spokeswoman said: 'There will be no changes to the services for the foreseeable future. On November 7th a British Airways Boeing 737 was chartered to Dan-Air to carry he flights. On board were four Dan-Air stewardesses who were making their emotional return trip after carrying out their last Inverness to Heathrow service. Chief stewardess Sharon Orban and her team Karen Riddell, Hester MacInnes and Jackie Anderson were close to tears as they met station manager Garry Dominey on the tarmac. But they were full of praise for thier British Airways counterparts. 'It felt so strange to be a passenger, and we were all very upset, but the crew were very sympathetic and nice to us.' said Sharon. The four girls sent their thanks to all their regular passengers for all the support they have had since the news of the takeover. Mr. Dominey, who was to also lose his job said: 'It's a very sad day here today. The staff have all had a great deal of sympathy and support from the community. The cabin crew had a great rapport with the regular customers, and it's just a pity that it all had to come to this.'
The first British Airways flight with a BA flight number arrived at Inverness an hour and a half late! For the time-being British Airways would use Dan-Air aircraft with British Airways stickers covering the Dan-Air name. The take-over was approved on Monday 9th November by European and British authorities despite al the protests from UK airlines. Meanwhile Davies and Newman Chairman, David James said Dan_Air's debts of £43 million to trade creditors were fully protected including £13 million in pre-paid tickets which would otherwise have been lost. He said: 'Furthermore, all the staff that have been made redundant will receive substantially better packages and pensions than would have been possible than the terms available in a receivership.
On November 6th the Manchester Evening News gave a front page tribute to Dan-air saying:
Today was the day when much-loved Dan died. Aged almost 40 after years spent putting a little sunshine in people’s lives. But Dan was an enigma to the end. For although the death meant more than 170 people losing their jobs their main sadness was to mourn the passing of..... a great British airline The airline was Dan-Air - plain 'Dan' to its friends — which closed down at Manchester Airport today after 30 years of flying from Ringway mostly in the happy role of taking holiday travellers to and from the sun Stewardess 'It feels like a bereavement' said 51 year old Di Humpage whose job as Base Stewardess put her in charge of the 80 cabin crew the airline was left with at Ringway — there were 300 at one time. She had been a stewardess at Ringway with the Gatwick-based company since 1963 on flying duties until about three years ago 'It is hard come to terms with the fact that Dan-Air no longer exists' she said. Like many of its workforce Di had stayed with the company with a fierce loyalty through high times and low The lowest were the two fatal crashes suffered by Manchester flights in 1970 when a Comet crashed in the Pyrenees near Barcelona killing all 112 passengers and four crew, and in 1980 when a Boeing 727 flew into the mountains in Tenerife killing 146. The two disasters involving the loss of friends as well as passengers made the Dan-Air staff at Ringway even more close-knit 'Over the years the airline has been like one big family' It was not just a figure of speech Like a number of other stewardesses she is married to a Ringway-based Dan-Air pilot — doubling the problems of losing employment
Above: Base Stewardess Di Humpage at the Dan-Air desks at Manchester.
Distraught pilots and cabin staff said a sad farewell to their passengers as dozens of Dan-Air jets touched down for the last time. And as the sun set on the Gatwick company after 39 years of service, hundreds of staff spent a 'depressing' final day saying goodbye to colleagues. Equally heartfelt were the 'goodbyes' exchanged between crews and their passengers. One veteran Captain told passengers waiting to leave Aberdeen airport that the 'sad day' marked his last flight from the Scottish city and probably his last ever. He obtained permission from air traffic control to do a fly pass of the airport and swooped low over the runway after the jet had taken off. British Airways staff then began the lengthy task of obliterating the famous Dan-Air insignia from tickets, signs and the 12 Boeing 737s the company has taken on. By February 1993 British Airways hoped to move the 12 former Dan-Air jets over to the North Terminal to form an expanded short haul scheduled service. Thirteen of Dan-Air's routes had been saved from the axe. Senior general manager at Gatwick Dan Brewin said everything had happened very quickly entailing an 'awful lot of hard work' on BA's part. He stressed that British Airway's short haul service at Gatwick had been more than doubled following its acquisition of Dan-Air which had saved the jobs of 450 Dan-Air pilots and cabin crew. 'This is a very significant move to show our commitment, our plan is to create a hub operation in the North Terminal,' he said.
The plight of Aberdeen-based Dan Air staff was taken up at the highest level by Kincardine and Deeside MP M George Kynoch. The MP raised the case of the airport’s Dan-Air staff with British Airways Chairman Lord King and chief executive Sir Colin Marshall in the Commons on November 10th. Mr Kynoch said the two men had assured him that the future of the staff was being looked into and they held out the prospect of alternative jobs for some at Glasgow Airport. Mr. Kynoch said 'I believe British Airways are seriously looking at the position of Dan Air employees based at Aberdeen.' He met Lord King and Sir Colin after a meeting of the Tory backbench aviation committee. Six out of 13 Aberdeen based ground crew had been offered temporary employment. British Airways chiefs then promised to look at keeping on part of the city-based ground and cabin crew. Although not necessarily at Dyce. This offered at least a chance of a reprieve for some of the 35 Dan-Air staff who were told they were all being made redundant following BA’s take-over. The promise was handed to George Kynoch. The treatment of the Aberdeen staff was raised with both BA chiefs by the Grampian MP who demanded to know what could be done to help them. The airline bosses told the MPs that BA had only taken over Dan Air at the weekend and so far had been concentrating on sorting out problems at Gatwick. But they gave assurances that consideration of the position of Aberdeen staff would soon come under review. And they Indicated there was a chance a number of Dyce-based employees might be retained, although they might be transferred elsewhere. 'Obviously this is good news... there is a glimmer of hope now,' Mr Kynoch claimed. 'I think Lord King and Sir Duncan were in no doubt about the strength of feeling that those parts of Dan Air outside of London have not so far been properly considered.'
There were tears of sadness as Dan-Air took to the skies for the very last time. The tears flowed alongside the champagne as the great airline said goodbye to the aviation industry with a final flight from Gatwick to Amsterdam. The cabin crew on Flight DA 471 put on a brave face for the 50 passengers on board - but couldn’t hide their sadness. 'It's the end of an era.' said one pilot. But the airline went out with a bang, holding massive parties to boost staff morale right up to the end. Those made redundant were now hunting for jobs that were few and far between. Caroline Mortimer who was 23 had worked at Dan-Air for four and a half years. Her sister, Claire, who was 21, worked alongside her in reservations and ticket sales. She said. 'Towards the end we carried on as best we could, but it was very difficult, knowing what was going to happen,' Caroline said the Pilot of the last flight, Captain Roy Callows said 'It's a sad day for us that this company is ceasing to exist.'
Cabin crew Melanie Creary who had been a stewardess for only seven months said: 'People applied to Dan-Air because they thought it would be a secure job. Now look what's happened.' Satisfied customers sent messages to staff saying to 'keep smiling' Businessman Tommy Hanley said: 'It is so sad when a great small company is swallowed up by a large conglomerate.' I've been travelling with Dan-Air for 35 years and I have always been impressed with their standard of service.
The former managing Director of CityFlyer Express, Brad Burgess told us:
'I was distressed at some airline's reactions to BA taking over Dans. A lot of them had shown little or no commitment to Gatwick over the years and they were saying that rather than permit British Airways to save at least some of Dan-Air, the whole company should have been allowed to collapse. Just look at the job situation. At that time the area was still rocking to the folding of Air Europe and Gatwick Handling shedding hundreds of jobs. While it was desperately sad that people lost their jobs at Dan-Air, at least some of them had been saved. More importantly, the main core of Dan-Air's scheduled services had been maintained. Had that not happened, the ramifications on job losses would have been horrific. Think of all the associated job losses, cleaning, catering and so on. Then the knock-on effects of jobs in pubs and shops and the like. It quickly became clear to me that BA's action would have saved thousands of jobs not hundreds in the area. Aviation is an extremely competitive industry and one tends to look after ones own best interests. However, I found the campaign to prevent the Dan-Air/BA deal unfortunate. While we would have all infinitely preferred to have seen Dan-Air continue as an independent entity in its own original form, it became very apparent toward the end that this was not going to happen. Maybe I blinked, but I don't recall any other firm bids for the company coming in. So I think, for the people who lived and worked in the area, I think the BA deal was the best that was available.'
British Airways faced a mutiny by cabin crews fighting savage pay cuts it was reported on November 12th. Staff on short-haul flights out of Gatwick were heard openly announcing their plight on board. As workers threaten strike action, passengers were being urged to let BA chairman Lord King know their feelings. The cuts came as British Airways moved to set up a low-cost short-haul operation incorporating newly-acquired Dan-Air. Up to 1,200 staff were given a choice of redundancy, transfer to Heathrow or a huge pay cut. This was tempered with a taxed lump sum of around a year's wages. A purser on the maximum £19,186 would have to take a £6,000 cut to £12,918 while a junior purser would drop from £14,449 to £9,772. On one flight the purser announced: 'Your flight deck, cabin crew and ground staff have been told their contracts have been withdrawn. A new airline is to be formed using the same aircraft, uniforms, destinations and routes — but employees will suffer a 30% to 45% salary loss. We would not dream of treating you the way British Airways, the world's favourite, most profitable and successful airline, is treating us.”
BA threatened action to anyone making the announcements — but passengers heard the message on at least 30 flights during the period. - Geoff, a businessman from Berkshire. said: “I was surprised but it seems BA is using its takeover of Dan-Air to bring in pay cuts. But if faced with a 30 per cent salary cut I would find it hard to keep my motivation — I think service will suffer.' A spokesman insisted British Airways was not ripping up old contracts — just offering new deals: 'These are proposals put to staff which we will continue to discuss. We want to make Gatwick profitable. The chance of a low-cost operation from our acquisition of Dan-Air will be a boost.” But one stewardess said: 'We have been stabbed in the back — they will never win back our loyalty.'
British Airways workers threatened an all-out strike at Gatwick in protest at wage cuts announced that week. Ballot papers were sent out November 11th proposing industrial action against the airline and its decision to slash the salaries of about 1250 staff. The ballot took place the following week and the Transport and General Workers union's 5500 BA workers at Gatwick and their 35000 colleagues at Heathrow voted in favour of action.
BA told its short haul staff to accept wage cuts if they wanted to work on the new low-cost European airline. Employees were told if they did not accept the tougher working conditions then they had two other options — redundancy or apply for a different job at another airport. In protest more than 300 angry staff marched into BA head-quarters at Longbridge House Gatwick. Strike action was postponed on November 20th after British Airways agreed to meet Union leaders to discuss pay terms.
The future was not looking bright for the 350 flight deck crew who had been redundant. One pilot who had flown for Dan-Air for 14 years said: 'The take-over has hit the job market badly. I have written letters to more than a hundred airlines and received just five back, all of them negative. After a year without flying, a pilot's licence begins to lapse, which makes it even more difficult to get a job. To fly a 'plane is a highly skilled job and to keep up that licence would be very expensive. The severance deal was terrible. It turned out to be the very minimum that could be paid. Loyalty to the company went out of the window when they made the redundancies. I know of fully trained pilots who have taken jobs as kitchen salesmen, just to make ends meet.'
'A lot of people are going to find it very hard to get a job' said 22 year old Nathan Skinner, who worked in crewing. 'I was involved with co-ordinating crews, so I had contact with most departments within the company. People are finding the job situation around Gatwick very poor. There's lots of people from Horsham, where I live and it is tough.' Nathan vented his anger in carton form depicting a British Airways official flushing Dan-Air down the toilet while tossing a £1 coin at a queue of redundant workers.
British Airways said they would offer jobs to most of the staff employed by Dan-Air at Aberdeen and Inverness - but not in Scotland. British Airways says it is offering all but 12 of the 79 former staff at the two airports other jobs in the wake of its take-over. In a letter to Kincardine and Deeside MP George Kynoch, BA’s Parliamentary affairs manager Norman Lomie said some will be able to continue working at Aberdeen or Inverness, but most will offered work elsewhere in Britain. Tory MP Mr Kynoch said he was delighted most of the Dan-Air jobs had been saved. 'Following my meeting last week with Lord King and Sir Colin Marshall, it does appear that a significant number of jobs which at first were under threat have now been saved,' he said.
On November 17th British Airways announced half-yearly pre-tax profits of £227 million — as it confirmed plans to cut the pay of some of its workers. Chairman Lord King said the performance results were a credit at a time when international airlines overall were facing huge losses. Lord King said the recent acquisition of Dan-Air was the first stage of carrying out the airline's plan to create a low-cost operation dedicated to the profitable development of Gatwick. Most Gatwick employees would have the chance to leave BA with compensation and join the new subsidiary airline with lower rates of pay.
Independent airlines who had failed in their bid to stop the take-over now pledged to step up the fight for a wide ranging review of airline competition rules. And the Consumers Association has described the decision as 'staggering and unbelievable.” British Midland Chairman Sir Michael Bishop claimed the decision was 'harmful to the interests of the consumer and the interest of the majority of British airlines'. BMA along with Air UK, Virgin and Britannia vowed to keep on fighting.
On November 18th British airways has rejected pleas to retain Dan-Air’s cabin crew jobs at Inverness. The decision was a major blow for around 25 staff who had been based in the the Highlands since Dan-Air took over the route more than eight years prior. Some posts from the defunct airline had at Inverness will remain as British Airways already had a presence at the airport, and some staff were offered alternative employment at Manchester, Glasgow and Birmingham. The overall jobs loss could be more than 40, with only a handful joining BA at Inverness. The British Airways air and cabin crew, who had taken over flying the former Dan-Air route were being accommodated overnight at the Golf View Hotel in Nairn. British Airways say it was cheaper to meet hotel and transportation costs than base staff permanently in the area. The situation did not please the North and MPs who raised the matter with BA and expressed concern about the jobs losses and what they see as the airline’s centralisation in the South. British Airways went on record to say the Inverness-Heathrow service would continue, although there were already fears in the area that moves were afoot to relocate the Inverness service into Gatwick or Stansted.
The following day two airline companies launched a High Court bid to challenge British Airways' plan to rescue Dan-Air. Virgin Atlantic and the owners of British Midland applied for permission to seek a judicial review of the Government's failure to refer the takeover to the Monopolies and Mergers Commission. European Community competition rules the Government was legally obliged to have the economic and competitive effects of the acquisition properly considered by the MMC. The Government acknowledged that the takeover raised competition concerns but argued that the balance of public interest lay in the protection of services at Gatwick.
Both airline companies lost their High Court bid to mount a legal challenge to the British Airways’ takeover of Dan-Air on Monday November 23rd. Virgin Atlantic and the owners of British Midland were told by Mr Justice Schiemann that they did not have an 'arguable case'. The judge refused them permission to seek a judicial review of the Government's decision not to refer the takeover of the airline to the Monopolies Commission They were also prevented from seeking court orders against the Director General of Fair Trading for allegedly failing in his duty to recommend the referral to President of the Board of Trade Michael Heseltine. The dispute was then set to go to the Court of Appeal when the two carriers asked the court to rule on the Government's 'failure' to consider EC law before clearing the merger. The High Court ultimately rejected their case.
Gill Air, the airline which took over Dan-Air's last remaining oil related charter flights into the Shetland Islands had the flights halted by the Civil aviation Authority on November 23rd. The company had been flying oil workers, bound for Sullom Voe terminal, into Sumburgh airport for the past four working days, before bussing them more than 50 miles across Shetland. Problems with the Gill Air aircraft landing light system were insufficient and had to be resolved, before the company’s operations at Scatsta could resume. A spokesman for the CAA in London said problems were identified after Gill Air took over Dan Air’s contract to fly BP workers to the oil terminal. He said some of the company’s planes had to make steeper approaches than usual and the landing lights were not suitable.
The struggles at Gatwick Handling would be eased a little following successful contracts with Airtours International, Air Ukraine and the Norwegian carrier Braathens. The race was still on to safeguard some of the jobs of the 600 staff who were earmarked for the chop. In the end, Gatwick Handling axed 360 staff.
A last minute climb-down by British Airways averted all out strike action on November 25th. The airline accepted all the terms put forward by the TGWU. Their official said that British Airways had tore up the letter sent to all staff and was now willing to talk everything through with the airline.
Dan-Air pilots flocked to join Britain's newest airline. Philip Ettinger, was the brains behind Jettair who had plans to launch flights from Liverpool to London Gatwick and London City Airport. He said 'I have had lots of applications from ex Dan-Air staff. Liverpool PR boss Ettinger needed five crews to operate his British Aerospace 146 Whisper Jets. 'I have the cream of Britain's 146 pilots - the type flew with Dan-Air for a number of years. He was set to meet the Dan-Air crews on December 17th. He had leased one of the type and was in talks to add a second aircraft. Ultimately the airline failed to get off the ground.
On December 14th The European Commission threw a spanner into the works by opening an inquiry into the acquisition of Dan-Air by British Airways after initially giving the all-clear to the deal. It followed objections lodged by Belgium to the merger. It was unclear what impact the move would have, but sources at British Airways played down its significance, saying any decision was expected to apply only to routes in and out of Belgium. The move was interpreted by some experts in EC competition law as a successful ploy by Belgium on behalf of its national carrier Sabena, and Sabena's new ally Air France, to upset a deal affecting the busy London-Brussels route. Sabena had been fighting for more landing and take-off slots on the money-spinning London-Brussels route.
Captain Tim Cook flew off to a new job with Gulf Air in December after being made redundant from Dan-Air. A captain with Dan Air for 21 years, Tim, 49, was one of the pilots put out of work by the take-over. He was glad to get a new job, but reluctant to leave the UK because of the new lifestyle: 'I am off to Bahrain for a job with Gulf Air as a captain flying 737s, I will be based in Bahrain and will be flying around the Middle East. I am not looking forward to it overly much because it means leaving my family. For the next year it will be very disruptive. He says the pay's a bit less for the new job but it's tax-free. He would be facing temperatures of 110 degrees centigrade, which he didn't find appealing. Captain Cook was hoping to find a job closer to home in the next year. But for the present he said: 'You get two months leave a year. I intend to come home twice a year. My wife will fly out to visit me and I am hoping to get back as often as possible. 'Tim had lived in Hastings for 20 years with his wife Carol and daughter Louise. now 20. Their other daughter Amanda, 24, is married. On the demise of Dan-Air, he said: 'It is very sad. I suppose it was inevitable given the financial circumstances. A lot of people have been put out of work'. He explained it was not an arbitrary selection for the 320 redundancies. ''I had flown the 737 200 series and they only took on people trained on the 400 series. I have come to terms with it now but there were a lot of sleepless nights.' Said Tim, who flew all over Europe, North Africa and the near East on both holiday flights and scheduled services with Dan-Air: 'The 737 pilots are managing to get some work but some people like the BAC 1-11 pilots will be a long time before they get work.'
That is the story, blow by blow. Could anything have been done differently that would have resulted in a different outcome? It is widely believed that some things were done right, and some wrong. Some people are convinced that the last two years of Dan-Air was an exercise in ensuring that the banks got their money back. They believe that there was never any intent on rescuing the company, that the banks were certain that Dan-Air would fold in any event at some time in the future. Why should they risk giving further credit facilities to the airline after 1992? If they had, and the airline did fail - there was very little of the company left to pay back any further loans. The special article written below draws opinion and quotes from all sides. You must draw your own conclusion as to what might have been.....
ROUTES AND ROUTE CHANGES
- Gatwick - Stockholm - Twice daily, except Saturday. February 24th
- Gatwick - Rome - Daily service commences February 24th
- Gatwick - Athens Daily service commences - March 26th
- Gatwick - Barcelona - Daily service commences - May 18th
- Gatwick - Barcelona service closed. October 2nd
- Gatwick - Oslo
- Gatwick - Istanbul
- Gatwick - Malta
- Gatwick - Cairo
NETWORK & PRESS 1992
SPECIAL ARTICLE
Causes of decline
Among the reasons for Dan-Air's decline was the lack of vertical integration with a UK Tour Operator. The company had contracts with 130 Tour Operators, many of whom did not charter an entire aircraft at any one time. The company claimed that this suited them, as they could offer the spare capacity to other, smaller, Tour Operators, who also could not justify chartering a full aircraft. Dan-Air was the last major independent provider of charter airline seats to numerous large, medium-sized and small tour companies in the UK and overseas. This was at a time when most UK Tour Operators had set up their own airlines. From the late 1970s Tour Operators had been aware that by having a dedicated in-house airline, they could save costs with that vertical integration. Each time one of these carriers started up. It was with a small fleet of new aircraft. With a dedicated Tour Operator using those aircraft there would be no negotiating lower rates with various airlines. They could give the best flights to their own carriers - watching their airlines grow - as time went by - the need to charter other airlines' aircraft would diminish. Fortunately, the number of British people taking overseas holidays continued to increase throughout the eighties. Nevertheless, Dan-Air's own growth in the charter market was stunted. Historically airlines including Court Line (Clarkson's) Britannia (Thomson) Air Europe (Intasun, ILG) Monarch (Cosmos) Orion Airways (Horizon) Air UK Leisure (Unijet) Air 2000 (Owners Abroad) Airtours International (Airtours) Inter European Airways (Aspro) and British Airtours/Caledonian (Inspirations) had all flourished. It is also true to say that only Britannia, now operating as Tui is still around. The advent of the internet and low-cost airlines enabled travellers to make substantial savings on holiday packages made up by themselves. The more independent minded modern day travellers do not relish having to pay travel agents their commission, over the top prices for transfers and in-resort excursions from holiday reps when they could be bought from any shop in the holiday resort.
Certainly the need for charter carriers has all but vanished. There is a much smaller market for package holidays. Older people prefer them, feeling more protected, families too have been seen to enjoy the security. Thomson Holiday was the dominant Tour Operator for forty years. No other company came close to challenging its position until Jet2 Holidays finally took the mantle as the largest Tour Operator in recent years. Jet2 have successfully integrated charter style packages with scheduled flights. Jet2 uses charter flights from six of their eleven main bases. In 1992 Dan-Air was already concentrating its efforts in being a scheduled service airline. Looking back, this may have been the right thing to do.
One can question whether the choice of destination was right. Certainly Paris and Brussels were vital routes. Competition was high amongst other carriers keen to fly between capital cities. Dan-Air had recognised in the eighties that Paris Charles De Gaulle was very expensive to operate into. in 2025 Easy Jet continues to use primary airports and offer low cost fares. Even less expensive flights come by way of Ryanair who choose to fly from airports often more than a hundred kilometres from their named airport - Frankfurt Hahn for instance. Following the deregulation of European airspace in 1992 Dan-Air was ideally placed with ample take-off and landing slots at Gatwick to fly low-cost, single class cabin flights to airports all over Europe. It missed the chance by a few months. Could that option have put Dan-Air in a totally different position? Ryanair was, to put things into context, a minor, insignificant carrier in 1992 - it didn't become one of the world's largest and powerful airlines overnight. In a straight race with Ryanair - Dan-Air would have been streets ahead. Dan-Air's fleet was much more modern than the contemporary Ryanair fleet. Making them ideally placed to gain dominance.
With Tour Operators forming alliances like they had, credit has to be given to Dan-Air for managing to retain any market share at all. In the early 1970s Dan-Air accounted for almost 40% of the charter market. By 1992 this figure had dropped to 16%. Having said that 16% of the market in the nineties dwarfed 40% of the seventies share.
This competition had resulted in a decline in Dan-Air's importance as a business partner for these Tour Operators, reducing its status from main to marginal provider. Intasun having dropped Dan-Air, was rocked when their sister company Air Europe dropped Dan-Air Engineering as its preferred engineering company. A position Airtours took just a couple of years later. When one looks at the history of Airtours, it reveals that a married couple who ran a local travel agency in Rossendale, Lancashire - Alfred and Ivy Roberts (AIR)Tours had begun to put together packages of their own in 1972, chartering Dan-Air aircraft. In a very short time the couple were producing brochures and selling their packages to other agents. Dan-Air's parent company did have a small Tour Operator but very little effort was made to establish this as a brand of its own. It languished as a non entity in the list of Tour Operators. Given a new name and a healthy injection of cash and time - way back in the early seventies - who knows what that business might have gone of to be. Whether it chose to be upmarket - as ironically the small in-house Tour Operator was, (using shceduled flights) - or had it copied Intasun's down market ethos - would have given Dan-Air a preferred Tour Operator that would, as a matter of instinct, chartered Dan-Air aircraft. Instead, Intasun chartered Dan-Air aircraft giving the worst possible catering to passengers - leaving Dan-Air to take the reputational hit. Whilst at the same time, giving Intasun passengers travelling on their own airline, Air Europe first class catering 'as good as that on any scheduled service in Europe' - something they did when Air Europe chartered their aircraft to other Tour Operators.
During the eighties, Gatwick Airport placed an embargo on night flights. Intasun was able to take advantage here at the expense of Dan-Air. Intasun could use an aircraft departing as close to the night time deadline as possible, flying a flight of at least four hours duration. At the same departure time, a Dan-Air charter flight on behalf of Intasun would depart on a shorter flight. In both instances the lower night time take-off fee would work in favour on Intasun. The Air Europe flight would land in Tenerife four hours later. The Dan-Air flight would land at Gerona in a little over two hours. In both instances there would be a one hour turnaround. The Air Europe flight could then depart and return to Gatwick, landing after the noise restriction had ended. The Dan-Air flight meanwhile would have to wait several hours in Gerona before departing just over two hours before landing would be permitted at Gatwick. This should not have been the way that an airline had to operate, and yet Dan-Air had to. Dan-Air was forced to meet Tour Operators demands, and they certainly had to match other airlines' charter rates. As the years went by this could mean that an aircraft could be flying a return flight at barely break-even point. Margins in the industry are low - low-cost airlines freely admit that ancillary sales of drinks and duty-free can make the difference to a flight's profitability or loss. Dan-Air had turned that into an art form.
To many observers Dan-Air appeared to be being attacked on all fronts. The privatisation of the hitherto state owned British Airways was a tremendous blow to all airlines. Especially in a pre-deregulated environment. British Airways had not only a huge network and fleet, but, when privatised, got it all for free. A share option to the public then gave BA an even bigger cash injection.
Another reason most people see as a contributory factor of failure was Dan-Air's fleet, which contained too many different, incompatible aircraft types. Some of these aircraft were older and less efficient than those operated by competitors. Consequently, the Dan-Air fleet was costlier to operate and maintain. The Boeing 727s, which Dan-Air continued to acquire throughout the 1980s, including some on unfavourable leases, proved a financial millstone. Air Europe had made disparaging comments to the press that they would not be using Dan-Air's aircraft in future as they were 'old, gas guzzling jets.' To some extent this was true. However, newer types had been introduced at the beginning of the eighties. The Boeing 737 and BAe146 aircraft performed well and were comparable to any similar aircraft operated by rival airlines. Britannia and Air Europe had purchased newer, larger Boeing 757 and 767 aircraft by 1984. A time when the long-haul charter market really took off. This left Dan-Air without a compatible type, and unable to enter that arena successfully. the introduction of the Airbus A300, whilst important, saw them match their rivals only with capacity, not range. Fred Newman had expressed an interest in the Boeing 757 in 1983, but went public saying the aircraft was as large as they would ever contemplate using. The interest did not go further than that.
It was said by Dan-Air's last chairman David James 'The Boeing 727s were a terrible burden. They were so expensive to fly. We were flying them just to pay to keep them flying.' - Why then were seven of them kept for the entire time James was in charge? Several Boeing 737 300/400 had become available as soon as Air Europe was grounded. They were leased and Dan-Air could have taken the leases on, or leased others. The Boeing 727 may have had a lower book price, but if they were bringing zero into the company purse - why keep them?
One Irish start-up carrier was reported in the press to have purchased up to three Boeing 727 for £1 million apiece. The aircraft therefor had a book value, and a sale would have helped in terms of down payments on newer aircraft or lease arrangement.
One company pilot pointed out that the Boeing 727 had a higher capacity than the first model 737. Which did give Dan-Air a competitive edge in the seventies. But the flight-deck complement was three. A full salary paid to a third person. Something the BAC 1-11, BAe146 and Boeing 737 did not have. Therefore the type had outlived its usefulness as a charter machine by 1979. And yet, the type was still flying in Europe in the nineties with Lufthansa, Iberia, Alitalia, Air France, Olympic, TAP and several north African airlines. The combination of the type being in a two class cabin, flying scheduled services with higher priced tickets and the ability to carry cargo could have meant that the type was profitable. Particularly if it were flown on high-density flights such as Paris and Brussels.
The variety of different aircraft types in the fleet had, between 1967 and 1980, been a major selling point. No other UK airline could offer clients such varied capacity from 44 seats (HS 748), 70 (Viscount) 89-119 (BAC 1-11) 99-119 (Comet) 130-169 (Boeing 737) 142-189 Boeing 727) 336. Britannia Airways had relied on one type, the 737, for same period. Air Europe had introduced the 200 Advanced version of same aircraft in 1979. The seating capacity was the same as other 200 series currently in service. For the vast majority of European destinations carrying charter passengers, the type was ideal. By the mid-seventies, more than one Tour Operator could charter the same aircraft on a single flight. Thus taking away the burden of one Tour Operator selling all the holiday seats. Dan-Air may well have had the cheapest acquisition prices of jets in the country - but that came with a heavy price in the fuel pump. To obtain the jets when they did in 1967 was a master stroke from Dan-Air. Only one other UK independent airline had jets. The following year that advantage was lost when Laker introduced brand new BAC 1-11 jets to their fleet and Britannia the 737. Dan-Air's belief that the Comet's use was sound, because they had relatively low flying hours was backed up by its low cost. Whilst crew had great affection for the aircraft - Tour Operators had lost interest very quickly. The novelty of having jets at their disposal quickly wore off as more airlines introduced them.
It was in 1969 when the 1-11 joined the fleet and 1973 when the 727 was introduced that Dan-Air were carrying upwards of 40% of charter passengers. The decision had been made to phase out the Comet. Yet more Comets joined the fleet. For seven years the type soldiered on. The aircraft may well have appealed to the sentimentality of aviation enthusiasts, and it may hold a special place in the record books. The facts were that the Comet was already obsolete. I have researched that the extra fuel costs and the low acquisition costs marginally favoured the Comet during this period when compared to a Boeing 737. I simply cannot accept that the extra maintenance costs, the extra flight deck personnel, the fuel burn and landing fees would have been favourable to a BAC 1-11 or a Boeing 737. Especially given the give-away price of the BAC 1-11s purchased from American Airlines. If the difference was negligible - from a public relations point of view - a Boeing 737 would have a spectacular choice. From that same PR viewpoint - the Comet was a disaster. My own correspondence with passengers as confirmed this. I have read and chatted with passengers with tales of broken tray tables, condensation dripping cabins, draughty ankles, bangs, coats falling from hat-racks on landings, and other things that go bump in the flight. Whilst crew recall feeling 'as safe as houses' passengers, at best, tell stories of being aware they were flying on, and I quote: 'An old banger' 'An old crate' 'A wreck' 'Dilapidated mobile hovel' and 'an old lady'.
My contributors hated the noise, the hat rack - the cramped cabin, the curtains and even the small door. Especially as those fortunate enough to travel on a Laker DC 10 would be enjoying a movie! The idea that a first generation jet should be parked next to a brand new Boeing 737 on the tarmac as one boards their holiday flight was disconcerting and only added fuel to the nick-name that crews hated so much - Dan Dare.
Fred Newman's own reluctance, throughout his long tenure at the helm of Dan-Air to invest in new aircraft does not polish his legacy. He was an incredible Chairman, but his phrase 'The Boeing 727 is a marvellous machine and will stay with us for many years' only highlighted where he perhaps was out of touch.
As for the Comet - Managers for Tour Operators have told me several times that they would only charter them when nothing else was available. They had refused to offer charter rates that would make the flights profitable. One persistent rumour was that Thomas Cook had been the one company that gave Fred Newman the ultimatum - acquire the 737 or we won't charter anymore of your aircraft. The threat worked and the story goes on to say that Thomas Cook went as far as to help obtain the finance for the aircraft. In typical Dan-Air fashion, the aircraft were sourced second hand. The 'new' jet was only three years old when it joined the fleet in 1981. Dan-Air had a unique skill in finding aircraft that were relatively young, from reputable airline, at a price that was affordable. Looking at the contemporary fleets of many UK airlines, Dan-Air did not - contrary to popular culture - operate a fleet of geriatric aircraft. British Midland for example bought a number of DC 9 jets which had an average age of 18 when they entered service. Their viscount fleet has an average age of 15 years upon entering service, one of which was 26 years old when British Midland purchased it. Air UK's F27s joined their fleet at an average age of 27 and one was 38 when it entered service with Air UK. Their Fokker F28 were all at least 17 years old when they joined their predecessor Air Anglia. Whilst Dan-Air's much derided Comets were between ten and fourteen years old when purchased and most were operated for only four or five years. The last surviving example was 17 when it entered service in 1974 and and 22 upon retirement. One pilot said:
'It's perfectly normal in 2020 to see a 25 year old aircraft. What made the Comet look so bad on paper was the technological developments that had occurred in the subsequent years from the Comet 4 to the Boeing 737, which was less than a decade - but a million miles in developmental terms. Those second generation aircraft left the Comet looking like a museum relic.'
This was echoed in later years with the Boeing 727. Dan-Air's decision to embark on a major expansion into scheduled services from Gatwick at a time when the UK economy was still mired in the early nineties recession, made their own financial position worse. The economic conditions in the UK meant that actual revenues fell short of budget in the 1991–1995 business plan, which aimed at sustained profitability by 1995 with a £42 million profit. This meant an injection of £49 million of additional working capital into Dan-Air's arent company from a successful share issue in 1990 was insufficient to fund the airline's needs. The funds raised through new shares were insufficient to standardise Dan-Air's fleet on the Boeing 737 300/400 series and the Avro RJ115 (marketed but never built). The funds were also insufficient to finance transformation from a perceived cheap-and-cheerful charter carrier (with a motley collection of poorly performing, 'low visibility' regional scheduled routes) into a top quality, 'high visibility' mainline short-haul scheduled operator plying trunk routes.
Dan-Air's last chairman, David James, said 'Weak marketing and its charter mentality, even after the decision to make high-profile scheduled services the focus of commercial activities, was a reason it failed to achieve results.' As Chairman of the company - who might have been to blame for that? If the carrier had that mentality as he saw it. The Chairman had the power to stop this and change any company practices. The weak marketing could have been improved at the Chairman's behest.
This 'weak marketing and charter mentality' meant that instead of making Dan-Air an airline of choice for high-yield business travellers on prime scheduled routes where it had become a major force in the wake of the demise of British Caledonian and Air Europe – such as Gatwick to Paris Charles de Gaulle – through carefully targeted marketing and publicity, Dan-Air continued selling the bulk of its scheduled inventory to consolidators and discount travel agencies, in the way it had sold its charter inventory to package tour operators. The airline saw this as risk minimisation to fill seats on scheduled services. However, Dan-Air surrendered control over its scheduled seats to third parties whose sales were volume-driven. This deprived Dan-Air of the opportunity to boost the profitability of its scheduled operation by concentrating on maximising revenues from high-yield travellers.
The Failure Of Air Europe - Major Changes And Disaster
The original board members of Davies and Newman had started to turn the airline into a predominantly scheduled services carrier as early as 1988. Its scheduled services had been increasing steadily, loss making routes were dropped in favour of higher yield trunk routes. Dan-Air had capitalised on routes taken away from British Caledonian and British Airways at the time of their merger. Several Gatwick routes were up for taking and Dan-Air were awarded six of them. Dan-Air's 'Class Elite' was also launched in 1988. A business class cabin that meant aircraft had to be refurbished. Where aircraft had six abreast eating the centre seat would not be sold, but instead a table would be placed. On five abreast the row with three seats would also see the centre seat unsold. Arthur Larkman, a senior board member who had recently retired was not impressed with the business class name. He had reservations about the cost too. Drinks would be free, passengers would have improved in-flight catering with glass ware and china crockery as standard. The use of airport lounges would also be included in the fare. Larkman is entitled to his opinion, but Dan-Air had to have a business class cabin with those features, all of the company's main rivals had a similar product and without one - Dan-Air would never be able to compete. The name of the product was largely irrelevant. British Island Airways had 'Apollo Class' and Air Europe 'Premier' - Fine sounding names - all in a similar vein.
The cost of refitting cabins may well have been high, but it was vital - even with the charter fleet. Unless the airline was to commit itself to being the first UK low-cost - no frills carrier, something that with the benefit of hindsight was only a few years away.
In the eighties Air Europe, Britannia and Monarch had all installed audio and video In Flight Entertainment (IFE) into their cabins. Some carriers had chosen to offer this for free, some charged for headsets to rent or take away - a valuable income. The IFE was instantly popular with passengers. Dan-Air chose not to offer this, even on the latest additions to the fleet, where it was a readily available option. I cannot say if Dan-Air had lost some of their aviation antennae, but as the world embraced modernity, were the board guilty of complacency?
Many experienced board members had retired or passed away in 1990. Newer members came in their place. Dan-Air invested heavily into a computer reservation system that was way ahead of anything that its competitors had. There had been heavy investment in the engineering division. The expectation being that engineering contracts would be forthcoming from other airlines. The £10 million hanger at Gatwick was the third major base for Dan-Air Engineering. My own research points out that whilst the company was profitable, it too did not make revenues close to what 'the going rate' was. One manager felt that the company subconsciously undersold itself on almost every aspect of operation. Fearful that they might lose contracts, discounts were offered. Without the strong conviction that the company had the absolute right to charge a price that was profitable. His comments that other carriers were getting Marks and Spencer food at Lidl prices says a lot.
nted
The 1989 results were published in 1990 and did not make good reading. Out of a turnover of £376,000,000 a loss of £3,340,000 was recorded. In a damage limitation exercise the airline sold two Airbus A300 aircraft. This off set the loss to £1,856,000. Selling the aircraft at approximately £700,000 each. The 1990 figure was even more alarming; a record turnover of £380,745,000 was recorded, and yet loses had mounted. The airline had carried more passengers than ever. Had a wider network and had met challenges that the Gulf War raged on. Fuel prices had increased to alarming levels, at one time $90 a barrel, from a pre-war price of $40.
The Summer months of 1990 had been looking positive. Instead, the Gulf War broke out in August - the busiest month of the year. Several people cancelled their holidays and many decided against flying altogether. August was also the month that airlines traditionally made requests to banks for funding to cushion them from the Winter downturn in business.
In August 1990 Dan-Air's request was turned down. It was a stunning rejection. Davies and Newman had banked with Lloyds since 1922. Dan-Air had been in profit in all but two years of its existence. At the time of the request, Dan-Air was in debt to the tune of £26,000,000 which was normal for the time of year. These debts were widely known to be secured against the group's assets, of which there were many.
In a twist of fate, Air Europe's bankers were also Lloyds, As were British Island Airways - Air Europe's debt at this time was £90,000,000. Although, somehow, the industry were not aware of this. Dan-Air had to endure a year of constant press speculation about their troubles. Newspaper columns were full of stories about Dan-Air's impending failure, or that they were about to be taken over. This cannot have helped with confidence in the company. Air Europe had escaped any such chatter. Was this because Dan-Air was the victim of leaks to the press? Air Europe's massive debt was of course known to the banks. They had financed their impressive fleet through lease arrangements and had little in the way of assets. Furthermore, all of their office space was rented. In an attempt to save their business, their first action was to waste no time trying to destroy the reputation of Dan-Air.
1990 was the year Air Europe announced that they would not be chartering ANY Dan-Air aircraft or using their maintenance services. Air Europe announced an operating profit of £35 million. This was all because of an increase in the value of their aircraft, because of this they were able to refinance the aircraft several times. Air Europe had actually placed orders for their planes before the American operators had. This made their aircraft more valuable.
In the negotiations that followed a further loan of £30,000,000 was indeed secured to Dan-Air, bringing the debt to a total of £56,000,000. However this loan came with a wide range of heavy conditions. Firstly the company would have to have a new Chairman. This meant that Fred Newman would have to step down. The New Chairman, David James would have the freedom to choose who he wanted on the board. He quickly recruited his own team. Several Dan-Air directors would be leaving, they had agreed to stay until replacements were found. David James said on BBC's Money Programme:
'I will not have, or accept the responsibility for a rescue, unless I also have the total authority to see the job through. If I'm going to put my reputation, and indeed, in some cases, my own financial substance on the line then I'm darn well going to have the authority to back up that responsibility'.
Fred Newman and his family on the board even gave assurances that they would not use their voting rights. James was seen on camera saying:
'Operationally Dan-Air was heading in broadly the right direction.' However, he claimed that they 'didn't have a financial strategy to take it towards the future.' It was, he said: 'Essential that Dan-Air recapitalise.'
As 1991 approached it and it looked like the war was almost at its conclusion. Fuel prices had begun falling and people were once again flying. The directors who had left the board had been astonished to find their services were no longer required. Between them they had years of experience in running a highly successful airline. The industry is known to be particularly specialised and it is not without dangers. Margins are low and competition is fierce. To replace board members with people from non aviation sources was a risk. Some of the outgoing directors were not even given a formal farewell party. There was to be no formal recognition of these people from senior management in the new board room.
Danny Bernstein had left to become Managing Director of Monarch Airlines. His great skill in the industry saw Monarch go from strength to strength and become one of the most successful UK airlines of the nineties. Graham Hutchinson was acknowledged as a supreme airline manager, respected all over the World. Was it a wise move to let these two, outstanding people leave the company? Only a few people on the new board had a background in aviation. Michael Newman, John Mayes and Peter Sommers. The new Davies and Newman Chairman himself, David James was well known in the business world. He had earned the moniker 'The Company Doctor' Banks the World over had recruited him to save ailing businesses. He was an accountant by profession and had been trained by Lloyds. James had saved companies from going under in the past, none of them however, were airlines. Others to come with James were Peter Ryan, a chartered engineer and Charles Whyte, an engineer.
On the board would be Roger Payton, Sir Ian Pedder and David Herbert. Herbert was a solicitor and had been deputy chairman of Dan-Air for six years. He would lose that role and instead be responsible for legal affairs, pensions and insurance. Sir Ian Peddar who had, prior to the changes, been Chairman and Director of Dan-Air Services. Peddar would be removed from his current position and given the role of overseeing operational and engineering aspects on behalf of the Dan-Air board. A newcomer to the board was Roger Payton, who came from the collapsed Barings Bank. John Mayes was promoted to 'Director - Airline Services'. After a period. Fred Newman, the man who was respected throughout the aviation world bowed out and issued a statement. He was a man known to shun away from courting publicity. He was graceful in handing power over to James and his team. Newman must have been devastated at what was happening around him. He was widely known to have been a major force in shaping the airline. Not a soft touch by any means, but a kind hearted, decent and honourable man. By 1991 nine of the senior directors of the company had been removed.
The next move surprised everyone in the aviation world. On January 11th 1991 it was announced that a Danish engineering company called FLS Aerospace had bought Dan-Air Engineering for £27,500,000. Lasham Airfield had been leased by Dan-Air since 1954. It had several hangers and state-of-the-art testing equipment, ground equipment and spares. There was a second large base at Manchester with similar equipment. The newly built hanger space at Gatwick had cost more than £10 million and was able to handle the very largest of aircraft. Any debts Dan_Air had would be almost all wiped out and all creditors would be paid. The deal had secured, for three years, the maintenance of Dan-Air's fleet. This was with a guaranteed payment of £15 million annually. In November 1990 a valuation of Dan-Air's spares in stock (ALONE) was carried out - The figure - £30,000,000! The business, equipment, spares, stock, hangers, the job lot went for £27 million!! The sale had seemed to happen very quickly. Dan-Air Engineering did not publish its own figures because they were wholly owned by Davies & Newman. The company was however profitable. DAE gave top priority to Dan-Air aircraft but serviced aircraft of some thirty other operators.
James announced that the sale of Dan-Air Engineering was a "Happy Occasion, where both parties achieve something of major benefit." He claimed that the sale would open the way for the new Davies and Newman board to concentrate on the development in future strategy.
Was Dan-Air Engineering a millstone around the company's neck? In short - no! In any case. The 1,600 employees would have to wait to hear their fate when new owners moved in. Within months the new owner FLS announced redundancies of 300 engineering staff.
James was reportedly paid £30,000 a month. Fred Newman had taken a salary of £36,000 in his final year as Chairman. He stated at the time that his work at Dan-Air was a short term appointment. The advisers who would put together the new route applications following Air Europe's collapse, cost the airline HALF A MILLION POUNDS. Bank loans secured by James also came with a heavy price tag. After selling Dan-Air Engineering and refinancing the airline, Dan-Air would owe NINE MILLION POUNDS to them alone.
Citibank had made many loans to Air Europe's parent company, ILG, on the security of their aircraft, and on March 7th 1991 they demanded that ILG had 24 hours to find new financing. Or they would call in all their loans. Lloyds Bank meanwhile, who had been surprisingly negative to Dan-Air, and had made restrictions so wide ranging, were now trying desperately to keep ILG afloat. This policy was understandable from Lloyds point of view. They were the Bank who ILG's owed the majority of their debts to. So misguided were Lloyds by ILG that they had attempted to persuade ILG to take over Davies and Newman as part of the Davies & Newman rescue package. As it happened, no financing came. Air Europe owned just three aircraft in its fleet. (These were usually procured on highly favourable terms from the manufacturers and then sold upon delivery to ILG's in-house leasing subsidiaries, such as AE Finance or AE Norsk, or to third party lessors, such as Guinness Peat Aviation (GPA), from whom the airline subsequently leased them back. If you remember, Air Europe had placed their orders first, and so the aircraft were particularly valuable as they were new on the market. This enabled AE to keep the aircraft off its balance sheet, thereby being relieved of the financial burden resulting from the aircraft's depreciation, while keeping a substantial interest in the aircraft's residual values, which were booked as profits. This sale-and-lease-back activity was a central plank of ILG's corporate strategy. It also constituted a major part of ILG's business and accounted for a large slice of its profits.
Neither did the group hold the titles to the freehold of any of the properties that housed its offices and other facilities that formed an integral part of the business. Consequently the airline went bankrupt with 4,000 jobs lost. What was breathtaking at this point to observers, was that a huge gap in charter business had opened up, with Dan-Air was ideally placed to swallow up not only this available business, but also many of the bankrupt airline's scheduled routes. It would mean that Gatwick-Paris would now not face any competition from Air Europe. It is widely regarded now that had they done this the airline would have gone into profit that year. The decision was taken not to do this. Dan-Air had already announced that they wanted to be a scheduled services airline. Instead of taking on this available work Dan-Air actually reduced the charter and IT work that year. After ILG had collapsed, Tour Operator, Sunworld was formed by former ILG bosses. They wanted to charter Dan-Air aircraft for their entire programme.
The question has to be asked: If a business is losing money and lucrative work comes your way - even it is work you would rather not do - do you reject it?
In the midst of all this chaos, more changes took place in the board room in 1991. Vic Sheppard was appointed to lead a large team at the Traffic department. This would cover every aspect of in flight service. Meanwhile, David James addressed shareholders who had recently been invited to buy shares in a new share offer, aimed at giving the company a further cash injection. He stated that his prime objective was to bring a 'return to profitability' which he saw as being 'feasible'. He also pointed out that all of the board had come to that same conclusion. Furthermore he reiterated his intention to concentrate on making the airline a scheduled services operator. Just one month later, he announced that the company needed more funds. This time to the tune of £40 million. The vision the board had could only be achieved with this additional funding. He stated that the 'professional team of professional advisers' he had assembled in the board room were going to assist in the process.
The majority of the new routes Dan-Air had applied to operate were ex Air Europe destinations. They had acquired some of British Airways and British Caledonian's routes at the time of their merger in 1987. Dan-Air had also benefited from this, when the Government had only allowed the merger to go ahead if some of their routes were released. Dan-Air had gained Madrid, Lisbon and Mahon as a result.
The ex Air Europe destinations Dan-Air were given rights to operate from Gatwick, were Cairo, Athens, Istanbul, Rome, Malta, Stockholm, Gibraltar, Ibiza and Brussels. Some of these had started and some were set to commence in late 1992 - early 1993. Route proving is a costly exercise, airlines would research the route with viability studies. There may be route proving flights to find optimum departure times and frequencies, all of this takes time. In addition, an airline would need to establish a base at the destination airport. With that, a base manager and ground handling staff. Or at least a handling agent. Office space and equipment would be required, signage, and training of locally recruited staff members. There should also be a period of advertising at both airports well in advance to make the public aware of prices, offers, times and contact information.
Profitable routes can, and often do, supplement loss making routes until the correct load factors are achieved. Or dropped altogether should the route fail. In the case of Dan-Air, charter work was usually a safe way of ensuring this could happen. Charter flights had fewer risks. The airline was not responsible for selling seats. Tour Operators carried all the responsibility. If a flight is empty that is the tour operator's problem and the cost is theirs to bear. They have hired an aircraft, which provided catering, level of service and entertainment as the Tour Operator sees fit. The airline in return provide a serviceable aircraft with the correct flight crew. The airport provide assistance to passengers. It is a much easier operation from an airline's point of view. Not that this airline ever took their duties lightly. Dan-Air's standard of service was the same whatever flight you happened to be travelling on. By reducing charter flights that cushion of support was missing. Those new scheduled services would need to hit profitable load factors from the get go.
By now just two members of Dan-Air's board had an aviation background. Sir Ian Peddar and Captain John Mayes. No-one on the board made any significant noise opposing this policy of rapid, mass expansion. There had been disagreement over whether to obtain aircraft first or secure the route first. It had been Dan-Air's usual policy to make sure that if you were flying a route, that you made sure you had the equipment to operate it. James and his board didn't agree, insisting aircraft were easy to get hold of. Not all aircraft were so easy. This disagreement was aired on TV as part of a documentary.
All airlines know about route proving and implementation and how risky and expensive it is. It was a simple fact that Dan-Air did not, at that time, have the financial muscle or flexibility to expand in this way. Dan-Air had, at times, tried to establish routes that had failed. Either because of poor load factors or aggressive competition from other carriers. All airlines had been through that. It was sometimes a case of 'Some you win, some you lose'.
The decision was taken to consolidate the Dan-Air fleet into just two types. The Boeing 737 300/400 and the BAe146 was a good one. It was not clear how long this would take. The fleet had 19 aircraft that were not of either type. Of the Boeing 737 fleet; a further ten aircraft were the 200 series that the board had decided needed to be replaced. In total then, 29 aircraft out - leaving THIRTEEN that were suitable.
The £30 million loan that had been taken out had almost been paid off. Things should have began to improve on the balance sheets. Sadly, new services and new management structures with many new departments and initiatives had proved to be costly. The debt had now risen again, this time to £11,250,000, although this included the £8,750,000 arrangement fee that Lloyds had arranged! Without the charges, the losses would be £2.5 million - maybe less - if the charters had been approved......
Although Fred Newman had been ousted from his role of Chairman of Davies and Newman he could take some comfort from the sale of the ship broking company which David James now sold to Fred and Michael Newman. Through all of this, the company carried on as professionally as it always had been. This professionalism irked British Airways who had been losing money on its scheduled services out of Gatwick. Various attempts were made by BA to strengthen its position at London's second airport. Long haul flights were trialled without success. The intention of turning Gatwick into a hub for UK and European feeder flights was not realised. Where it competed with Dan-Air at Gatwick BA was not successful either. Talks between BA's management and some of Dan-Air's board took place in October with a view of using Dan-Air as a franchise airline similar to what had been tried with success with Manx Airlines in the Isle Of Man and Loganair in Scotland. Not only would Dan-Air operate its own schedules, but those of British Airways short haul flights from Gatwick. This was a real lifeline to Dan-Air. Talks seemed to be going well. Dan-Air would have the added advantage of having surplus aircraft that could fly its charter programme simultaneously. At the late stages the Dan-Air team withdrew, to the shock of all involved. With all this uncertainly, an Extraordinary General Meeting was called in late October 1991. David James formally introduced John Mayes to the board stating that "He came with a wealth of experience in aviation."
James stated that he was working towards bringing the company back to profitability. He went on to point out that the board had been examining all aspects of the company with 'intensive analysis and research.' He also pointed out that 'both Barings Bank and County Natwest had required the company to appoint separate independent external professional advisers, specialising in civil aviation matters' Looking back, this seems an odd decision. A board of extremely qualified, experts in aviation had been released of their positions only the year before. They had been replaced by men who were highly skilled in business, but had little or no knowledge of the airline industry. If these experts were to be recruited, what was the price of their remuneration? The figures were jaw dropping. From £400,000 in 1989, rising to £2,500,000 in 1990 and a slight reduction to £2,300,000 in 1991 - This was made even more disturbing when one sees that that figure was for only SIX MONTHS! Expertise does not come cheap! The fact that Dan-Air's existing board already had all the knowledge that ANY airline could possibly need, and had been relieved of their duties cannot be overlooked. David James announced at that time that he had: 'Never been more certain about the wisdom and validity of any rescue in my life as this one.....I think that what has happened in the last year has been one of the best demonstrations I have sever seen of a company getting off its butt end.'
With substantial charter availability suddenly available, a new airline sprang up. Air World came onto the scene from the ashes of ILG and Intasun's successor, Sunworld. Airlines grabbed all the spare capacity, leaving Dan-Air with its new scheduled routes. During the Summer months, the airline reported a loss of £5 million, at a time when it had always made a profit from charter work. The Rights Issue offer in October was for 107,500,000 shares. A paltry 2,500,000 would be available to Dan-Air employees. Priced at 50p per share, David James was convinced of a surge in shareholders and he claimed it 'would immediately return the airline to profit'. The reverse happened. As aviation analysts would point out - The Summer months were the most profitable for airlines. The share offer was made in the Autumn. The employees raised £1,250,000 and the share issue was a success raising £40 million - but the writing was clearly on the wall.
Further expense came when the new board recruited John Olsen as the airline's new Group Chief Executive, David James would now be group chairman. Fred Olsen did have an aviation background, working for Cathay Pacific for 23 years. His expertise was hoped to save the company. With him came a raft of new departments and managers. The question was whether an executive used to working with a large, international airline, flying long haul flights on super sized aircraft would be able to produce results with an airline with a mixed fleet of smaller aircraft and a European only operation?
The company was struggling for survival, and by June 1992 James once more claimed that he thought: ''(It)reasonable to expect a return to profit for the 1992 year.' He claimed that there was: 'No diminution of the board's confidence in the future of the company' Just three months later, he announced that Dan-Air would run out of money by 'The third week of October' All the money that the airline had made during the Summer months had been passed to the banks. On top of that, two BAe146 aircraft and six HS 748 prop-liners were sold. Shortly after this sale, all of the company's BAC 1-11 aircraft were sold, thus reducing the debt to £22 million. The bank would not be at any major risk with this debt as the airline still had considerable assets. By comparison Air Europe had crashed with debts reported, by the Guardian to be, £500 million.
Another lifeline appeared to be thrown by Virgin Atlantic. Richard Branson was quoted as saying that 'Dan-Air mustn't go bust.' As the final round of negotiations began with Virgin in October. The two sides indicated that there would be no statement until early the next week. There were growing fears, however, that the deteriorating financial position of Dan-Air might make it impossible to agree terms. Dan-Air was rumoured to be heading for losses of between £30 million and £40 million in 1992, compared with the £20 million profit forecast at the time of its recapitalisation the previous year. 'It certainly isn't a pretty picture,' One source, close to the talks was quoted as saying. However, suddenly Dan-Air withdrew from the talks. British Airways were now more than ever, aware of Dan-Air's weakened position, and for a second time, approached Dan-Air, this time with a revised offer. Now they wished to purchase 14 routes from Dan-Air and their fleet of Boeing 737 400 aircraft. Dan-Air rejected the offer. Despite heavy debts, the airline actually operated at a profit in the summer months, as they usually did, during the peak summer months. Assets for the company totalled almost £20 million. Was the company really in such a bad position? One must challenge that assumption.
Government Ministers were invited to help with the European Commissioner for competition declining to get involved as the company was 'too small'' It would be fair to say that despite debts, the company was more or less sound. If emphasis were placed on the charter market once more, then perhaps it could have returned to profitability. Even more so if the risky scheduled services had paid off. On the 8th November 1992 Dan-Air was sold to British Airways for the nominal sum of £1. Negotiations had been going on for several days behind closed doors. Often late into the night. For the purchase price of £1, British Airways would take on Dan-Air's financial commitments of £50 million which included debts of £37 million. For its part, British Airways got 12 of Dan-Air's most modern Boeing 737s, all of the airline's short-haul scheduled routes from Gatwick, the Heathrow–Inverness feeder service and about one-fifth of its 2,500 workers. The rest of the aircraft would be sold. Dan-Air was absorbed into British Airways's Gatwick operation. On 27 November 1992, the company's name was changed from Dan Air Services Ltd to British Airways (European Operations at Gatwick) Ltd.
This rump of the former Dan-Air formed the nucleus of what British Airways intended to be a low-cost short-haul feeder for its Gatwick long-haul scheduled services, with the aim of helping to return British Airways' loss-making Gatwick operation to sustained profitability. But was that all that British Airways would get? The short answer is 'No' - Gatwick Handling was a success story in its own right. From its inception, Dan-Air owned 50% of it. Initially with Laker Airways being the other 50% shareholder. After Laker's demise, Delta and Northwest Orient bought 25% each. They would have one member each on the board. The vast majority of airlines at Gatwick used Gatwick Handling - it was a precious asset. As son as Dan-Air left the scene Gatwick Handling lost 50% of its revenue and redundancies followed
Then the landing slots at UK airports, and for that matter, European airports were of tremendous value. Particularly the daytime slots at Gatwick. People outside the industry would be unlikely to know how valuable they are. Dan-Air owned prime real estate in the shape of their purpose built headquarters in Horley - 'Newman House' as well as Norway House in London, new offices at New City Court in the centre of the capital. Bilbao House was a large property of great value. Dan-Air also had travel companies, an insurance firm, leasing companies, bonded stores, and a catering company. What's more, the pension fund of £20,000,000 was transferred to British Airways. All of that for £1. All of the airline's flight crew had trained on specific aircraft. Only those qualified to fly Boeing 737 300 and 400 series aircraft would go on to British Airways. Most of the Dan-Air staff were made redundant. The pilots who found themselves unemployed would have to train on other types to find work. Pilots are bound to keep their licence up-to-date and they expire after a year without flying. The cost of converting to other types would be a heavy burden for individual pilots. To keep the licence in order would be a financial millstone to pilots. Many had lost their jobs following Air Europe's demise and now hundreds more would be looking for work.
Dan-Air were the only UK airline to use the Boeing 727. Fortunately for them, Sabre Airways was founded shortly after Dan-Air's sale. Sabre would grab some of the available charter work. they had purchased ex Dan-Air 727s and some crews found work. It is interesting to note that Sabre Airways would become XL airways and have many years of profitable flying.
Pilots received only two weeks basic pay for each year they had served in the company as a redundancy settlement. In contrast, the severance pay for the former board members who were in charge of the airline for the last two years received a figure totalling £742,233. Having sold aircraft and the airline along with its assets, David James issued a statement.
As the Company now has no assets, the Board is of the opinion that if the resolution of the voluntary winding up is not passed, the Board will have no alternative but to petition the court to wind up the Company - Yours Faithfully David N James." He later went on to say "I think what has happened is an unfortunate outcome, but it is an infinitely better solution than the awful alternative of receivership"
The Company has no assets? if that really was the case, then someone had sold them.
Was that the end of the story?
Some time after the event is was disclosed that British Airways was set to inherit a tax credit of between £50 million and £100 million. Even the worst case scenario would mean that by taking on Dan-Air's debt of £55 million it would benefit to the tune of £15 million for a £1 investment. The rebate was only to apply if and when Dan-Air or the new subsidiary makes a profit. The British Airways plan was to run the Gatwick arm of its company as an independent holding company known as European Operations At Gatwick (EOAG) Dan-Air explained that this was known at the time of the takeover, but Dan-Air had no hope of making a profit so it could not claim the cash.
Whilst the company folded and charter flights were grabbed by the charter carriers, staff who had transferred to the BA's new British Airways European Aviation At Gatwick would have different contracts to the ones that they held with Dan-Air. Some would be transferred to Heathrow and many contractual obligations were now disregarded and the unions seemed powerless to intervene. Shortly after the takeover many former flight deck crew got together and with a combined effort and with huge legal fees mounting, the crew took British Airways to a tribunal. BA was accused of corporate arrogance. The Dan-Air crews won their case. This meant that British Airways was looking at a huge bill of up to £8 million. The tribunal heard that:
'The criteria adopted to make the pilots redundant was unreasonable' Michael Ingle, solicitor, representing the Dan-Air Pilots' Action Group said: "British Airways had been disingenuous in portraying itself as Dan-Air's saviour, when in fact, it stood to gain several lucrative routes in the deal.' It was claimed that 'BA made much of the fact that it rescued Dan-Air when it completed the purchase in November 1992. It now appears rather disingenuous when British Airways achieved significant benefits from the way it structured the purchase.' Lawyers claimed that it had acquired some very large tax losses but gained valuable new routes with which to boost its loss making operation at Gatwick. 'There was a complete failure', the tribunal heard. 'To inform the pilots about their redundancies or tell them it was likely. There was also a complete failure to implement redundancies on the basis of seniority, which is traditional throughout the airline industry, including British Airways. There was also a complete failure by BA to consider if it had any alternative jobs for pilots throughout the whole group.' This successful claim was only the first hurdle in the pilots battle for compensation. On February 27th 1993 the group returned to Croydon to make a claim for the maximum compensation the tribunal could award, £10,000 each. After that, the airline staff planned to take their case to the High Court where they could claim up to £40,000 each which would take the BA bill to £8,000,000. One pilot claimed he was 100% sure that a former pilot, who he refused to name, had taken his life because of the upset. Several families, the pilots claimed, had split up, with pilots being forced to work overseas. It was claimed that most of the pilots who had found alternative jobs were paid far less than when they were at Dan-Air because of the seniority system. Having to work for another airline meant that any seniority accrued would be wiped out on commencement of service with another carrier. The pilots union BALPA was criticised by pilots for advising pilots to accept the redundancies. British Airways said that at the time of the takeover, because of Dan-Air's troubled financial status, it was not obliged to follow normal redundancy procedures, an argument rejected by the tribunal. Lawyers said afterwards that 'The landmark decision would allow workers rights to prevail'. The press had a field day calling British Airways "Brutish Airways" and one claimed that David James had treated Dan-Air like a horse with a broken leg.
On December 8th David James said he was donating £100,000 to a hardship fund set up to help unemployed staff of the defunct Dan-Air. But his act of magnanimity failed to impress Dan-Air shareholders and employees, as they turned out in droves to attack the deal. Shareholder after shareholder stood up to criticise the sale and the performance of Mr. James during a rowdy meeting to approve the voluntary winding up of Davies & Newman, Dan-Air's parent company. Faced with the barrage of dissent, Mr James, chairman of Davies & Newman, disclosed that he was contributing £60,000 severance pay and £40,000 of fees to a trust to support hardship cases.
But this was not enough to placate shareholders, including a former Dan-Air Captain with 22 years' service who was receiving just £4,000 in redundancy pay. 'Shareholders had been treated with contempt.' - one small investor said to loud cheers, while another accused James of having 'conned' staff about the prospects of saving the airline. Some accused the banks of 'shamefully helping destroy another business' but others laid the blame squarely at the door of Mr. James and fellow board members. There were gasps when James disclosed that severance payments to directors of Davies & Newman totalled £742,233. James conceded that the situation for pilots was not satisfactory but said their severance payments had to be seen in terms of the 'overall aggregate cost to make the deal possible at all'.
Maintaining an urbane delivery throughout, James explained that Dan-Air had fallen foul of the vicissitudes of the charter market, its own image, the banks and an ageing, expensive aircraft fleet. The deal with BA was not a pretty one but it had more merits than the 'awful alternative' of receivership. But his critics were not persuaded. 'At the moment there are three losers - Britain, the employees and the shareholders,' pronounced Peter Frankel, one of the latter group. Although the resolution to wind up Davies & Newman was defeated overwhelmingly on a show of hands it went through on a poll with a 97.23 per cent vote in favour after proxy votes from institutions had been counted. Dan-Air was no more.
A PERSONAL VIEW
There is still tremendous affection for the company throughout the World. This website has had more than one and a half million individual visits in the years it has been running. I have worked for perhaps too many hours to make the website current and modern. The research I undertake had become a passion of mine. Digging up old news is fascinating. Talking, as I have with former staff is great fun - hearing some of the sadly unprintable stuff is often hysterical. There is a great deal of mystery in the UK aviation world. At ground level staff are happy to talk about theories as to why things happen - Some theories, may well be true - but cannot be put on the site for obvious reasons. The higher one gets whilst researching - the tighter the lips get to full disclosure. Some people did talk off record and their views are often shocking. Rival airline staff have also been part of my research. Some of them reserve utter contempt for people within their industry. Whatever the politics of the airline world used to be, it is a fascinating industry. I am not always 100% sure when I write what I research, if anyone is interested. Then, when I do an update on the site I get a raft of people e-mailing me to debate the matter. So I hope the 2025 updates will bring you a whole set of topics to discuss.
The fact is - I don't really mind at this stage if I am the only one who is interested in my writing. I just love doing it. My only sadness is that I was not able to continue writing about the airline in what would be its 73rd year this year. I wonder if the board would have got in touch to say 'Well done - will you come and run our website for us?' or if I would be getting a call telling me to take it down as they don't approve. Perhaps something half way! Recently I was contacted by the brother of a board member who died in the early 1970s. He was very complimentary thankfully. If you have anything you would like to see on the site - please get in touch and let me know. admin@danairremembered.com
The site was never set up to make money, or to point the finger at David James and the 1990 onwards board. It was to tell the story as accurately as it could be told. The aim was to celebrate the wonderful memories and history of this incredible airline. To pay tribute to the staff - of all departments. To show what flying with Dan-Air was like. This is the 72nd anniversary of Dan-Air's taking to the air, I wanted to say 'Thank You' - you may be gone - but you are not forgotten.
July 2025
DISCUSS THIS SUBJECT
1
review
Mike Hearn
Saturday 25 Sep 2021
Absolutely brilliant!
.....................love the fleet summaries showing the individual aircraft!!!!
...............................should be done for other 'long gone airlines' including overseas ones like Pan Am!
.....................love the fleet summaries showing the individual aircraft!!!!
...............................should be done for other 'long gone airlines' including overseas ones like Pan Am!