page_title: British United Airways
section_title: Reorganisation
hierarchical_section_title: British United Airways / History / Reorganisation
caption_attribution_description: English: Handley Page Herald 211 G-ASKK at Manchester Airport operating a scheduled service from Southampton
context_page_description: British United Airways was a private, independent British airline formed as a result of the merger of Airwork Services and Hunting-Clan Air Transport in July 1960, making it the largest wholly private airline based in the United Kingdom at the time. British and Commonwealth Shipping was the new airline's main shareholder.
  At its inception, BUA assumed the aircraft and operations of its predecessors. These included a fleet of 90 assorted fixed-wing aircraft and helicopters that continued to operate mainly non-scheduled services. Gatwick became BUA's main operating base while Stansted was the main base for trooping flights until 1964.
  An order for ten BAC One-Eleven jet aircraft in May 1961 launched BUA's fleet re-equipment programme in support of its long-term policy to develop primarily as a scheduled airline. This was also the first time a private British airline had placed a launch order for a new jet. In January 1962, BUA merged with British Aviation Services, the holding company of rival British independent airlines Britavia and Silver City Airways. This made BUA the largest unsubsidised airline outside the United States.
context_section_description: At the end of 1965, Laker decided to relinquish his post as managing director and leave the company to set up his own airline.
  Following Laker's departure from BUA, Max Stuart-Shaw was appointed as BUA's new MD. Stuart-Shaw was a former senior manager at Central African Airways. His brief was to oversee the successful implementation of the board's original policy decision taken in the early 1960s to transform BUA into a scheduled airline. Although Laker had largely succeeded in welding the various constituent airlines that made up BUA into a single, integrated enterprise towards the end of his tenure while ensuring the business remained profitable, it lacked the quality of a frontline scheduled carrier. Despite the growth in scheduled activities during that period, the airline was still perceived as mainly a charter and freight operator. When Stuart-Shaw took over from Laker, he strengthened BUA's management organisation by developing the personnel department, expanding the planning unit, as well as reorganising operations and engineering. He also improved the quality of the airline's marketing. As a result, BUA witnessed a major improvement in the quality of its promotional material and in the number of flights departing on time, making its punctuality record one of the UK airline industry's best.
  Alan Bristow, the founder of Bristow Helicopters, succeeded Stuart-Shaw as BUA MD in December 1967 following the latter's decision to relinquish the chief executive role only two years after his appointment. By the time Bristow took over, BUA was losing money.
  BUA had recorded its first-ever loss in 1965, mainly as a result of the high depreciation charges its newly acquired jet fleet incurred and substantial losses the ex-BOAC South American routes generated. Over the following two years, the airline's financial situation rapidly deteriorated. In 1966, the loss amounted to £250,000. The following year it almost doubled. Preliminary loss projections released during summer 1967 had shown that a continuation of this trend would produce a negative result of more than £1 million in 1968 and an even higher deficit the year after. This scenario undermined the board's case for additional shareholder funds to finance the purchase of new long-haul jet equipment to replace the remaining Britannias and caused growing anxiety among shareholders, who threatened to withdraw their support unless there was a marked improvement in the airline's long-term prospects.
  A detailed analysis of BUA's financial results had shown that raising the airline's profile and quality during Max Stuart-Shaw's tenure meant that costs were growing faster than revenues. Other factors contributing to BUA's rapid cost escalation included high launch costs of several, initially unprofitable scheduled services, as well as an unexpected falloff in traffic as a result of a credit squeeze combined with new overseas travel restrictions due to a tightening of existing exchange controls. This was further compounded by the large number of overheads resulting from the group's complex organisation in which many functions were duplicated and the limited opportunities for independent airlines to operate scheduled services on domestic and international trunk routes in competition with the corporations.
  BUA had built up the high cost base of a major scheduled airline while low-yield charter traffic, a substantial amount of which was fluctuating, low-margin short-haul trooping between the UK and Germany, constituted a large part of its business. On the other hand, scheduled services generated inadequate revenues, which were insufficient to support the airline. Simultaneous development of new scheduled services and integration of existing regional operations in the Channel Islands and on the Isle of Man with the vehicle ferry network proved a costly distraction for overburdened senior sales and commercial managers, taking up a disproportionate amount of their time. Although revenues and the workforce had doubled between 1962 and 1968, total output had risen by less than half over th
caption: BUA Handley Page Dart Herald 211 G-ASKK in the airline's final livery, at Manchester Airport in 1967.
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