by Alan Bristow
I was bathing in the glow of considerable financial success at Bristow Helicopters and as a non-executive director of British United Airways I was wary of being associated with what looked increasingly like a rapidly sinking ship. I offered my resignation to Myles Wyatt, but he refused to table it before the Board. He was looking with increasing dismay and horror at the state of BUA.
‘For goodness, sake, don’t rock the boat, Alan,’ he said. ‘The shareholders want to sell the airline while it still has some value. You’re a wheeler-dealer – why don’t you have a word with BOAC to see if they’re interested.’
I went to see Keith Granville, BOAC’s managing director, and indeed he was interested. He was a ranker, he’d come up through the company, and we got on very well. BOAC had all the advantages in the world but it had managed to run up debts of more than £60 million. Its chairman, Sir Matthew Slattery, and managing director Basil Smallpiece had resigned in 1964, and the new chairman Sir Giles Guthrie had been charged with returning it to profit. Keith Granville, appointed at the same time as Sir Giles, thought that taking BUA out of the picture would be a good start. In meetings over a period of several weeks a price was established – £37.5 million – and Heads of Agreement were drawn up. I took the document to Myles.
‘Excellent work, Alan,’ he said. ‘The shareholders will be very grateful.’
Just two days later, in a state of extreme agitation, he came to see me in my office on the seventh floor of Portland House. His face was red, and he was clearly furious. ‘What on earth do you mean, giving me those Heads of Agreement!’ he said. ‘I took them to Giles Guthrie and he tore them up in my face!’
‘You can’t blame me,’ I protested. ‘You saw Keith Granville’s signature on them.’
He calmed down a little. ‘I’m not blaming you,’ he said. ‘But we have a real problem here. Can we get this back on track?’
‘I’ll see what I can do,’ I said. Through political contacts I was able to arrange a meeting with the Board of Trade Minister, a diminutive ex-coal miner called Roy Mason, who had ultimate responsibility for BOAC. I went to his office in St James’s Square for an early evening appointment. He walked in carrying a bottle of whisky and two glasses.
‘I just thought we’d have a drink,’ he said.
We sat in armchairs in an ante-room and made small talk – he spoke briefly of his days down the mines, and showed interest in helicopter operations. But on the question of the BUA buyout, he was immovable.
‘The trouble is, Mr Bristow, we cannot use taxpayers’ money in a way that might be seen as bailing out a loss-making private company backed by a group of High Tory shareholders.’
‘But you’re not bailing out a loss-making airline,’ I said. ‘BUA is a profitable enterprise with a great future, especially if the government gets its boot off the company’s windpipe.’
‘Why do the shareholders want to sell then?’ he asked.
‘They see the way the airline industry is growing beyond their purse to compete. They understand the need to put more and more money into buying expensive wide-bodied aircraft with expectations of a return of five per cent or less. It’s a game that’s too rich for them.’
‘Whatever the situation,’ he said, ‘the government does not want to create the impression that it is there to rescue a lame duck. There’s absolutely nothing I can do to help you sell to BOAC.’
We chatted for a while longer – I found him a pleasant chap, very down to earth and well informed – then I had to go back to Myles Wyatt and give him the bad news.
‘What on earth do we do now,’ he asked.
‘Does Stuart-Shaw know what’s going on?’ I asked.
‘He hasn’t been told yet,’ Myles said.
‘Well, the first thing you’ve got to do is get rid of the bugger, because there’s only one way he’s going to take BUA, and that’s down.’
Myles reacted as though he’d been stung. ‘Well if you’re so fucking smart, why don’t you tell us how to run it?’
I was particularly surprised because Myles wasn’t given to strong language, and in fact it was the only time I heard him swear. I was well acquainted with BUA’s operations after five years as a non-executive director. Over the next few days I wrote a nineteen-page paper on how best to run the airline at a modest profit with a strategy based on creating several profit centres while using the influence of all our shareholders to maximise payload in those centres. Authority had to be delegated to managers, some of whom should be given director responsibilities, and costs had to be driven down. Myles liked the paper and circulated it to the shareholders. A couple of days later, he called me.
‘Alan, a propos your views on BUA, would you be able to come to dinner with me to discuss what might be done? Some of the shareholders will be there. We’ll have a sort of informal meeting of the Board.’
Myles had a house in Hill Street, Mayfair, and when I turned up I found the movers and shakers of the Board already gathered. There was Nick Cayzer, Sir Donald Anderson, Lord Poole, who was chairman of Lazards, and Sir Brian Mountain, chairman of Eagle Star. As we sat around the table, Myles opened the discussion.
‘Alan, the shareholders really liked your paper on BUA. Do you think you could make the North Atlantic pay?’
‘Unlikely,’ I said. ‘As I said in my paper, with BUA’s financial resources it could never provide the frequency of service required to achieve load factors in excess of sixty-five to seventy per cent on long haul routes, which are essential to give the shareholders a dividend year on year. The more you flew, the more money you’d lose. The best option is to concentrate on those existing routes where there is a real chance of making them more profitable. You have to get costs down on the domestic routes to make London to Glasgow, London to Edinburgh, London to Belfast financially worthwhile.’
Dinner was largely a two-way conversation between Myles and myself, with the shareholders listening and saying little or nothing. ‘You say in your paper we have to rationalise the fleet,’ said Myles.
‘Too many costly old aircraft have been inherited from the companies you’ve taken over,’ I said. ‘You’ve got Dakotas on the Blackpool service, DC-6s, Britannias, you’re still running Sammy Morton’s Doves and Herons, but the days of the piston-engined airliner are over. Even the 200 series BAC 1-11s you’ve got are outdated. You need to get rid of them and buy new BAC 1-11 500s. They carry more people and they’re far more economical on fuel and maintenance.’
‘Where do you see the scheduled services going?’ asked Myles.
‘You’ve got the wrong balance between scheduled and non-scheduled services. You’ve got scheduled services on routes that ought to be charter. The only overseas scheduled services that are making any money are to Nairobi and Santiago. You’re thirty per cent charter and seventy per cent scheduled, and that’s far too heavily biased towards scheduled at this time.’
I went home after the brandy and cigars, leaving the shareholders to discuss matters among themselves. Next day, Myles called me into his office.
‘Alan, I’d like you to take over as joint managing director of BUA with Max.’
‘Sorry Myles,’ I said. ‘There’s no way I could run in double harness with him or anyone else. If I took the job it would have to be on my own as CEO, and on my own terms.’
‘I’m disappointed,’ said Myles. ‘I thought you’d jump at it.’
‘Myles, I’m happy at Bristows. We’re making a lot of money – we’ve already topped £6 million in profits. It’s a lot to walk away from, even to be given the challenge to return a major independent airline to a sound trading basis.’
‘The shareholders are keen to let you have a go,’ Myles said.
‘Before I took the job, the shareholders would have got to give me full, unfettered authority to do things my own way, without having to refer any of my decisions to the Board for approval,’ I said. ‘I can’t wait around for these shipping boys to make themselves available – one’s in Australia, Lo
rd Poole is otherwise engaged ... you can’t run a business like a gentlemen’s club. I can’t function profitably in that environment.’
‘Alan, these men are all very successful businessmen in their own right and they are trying to run an airline in the highly regulated environment that you and I have to live in.’
Two days later I was invited again to Hill Street, with Myles intimating that he wanted to discuss in some detail the terms under which I’d take the job. This time I had only three dining companions – Myles, Nick Cayzer and Brian Mountain. Nick avoided alcohol and asked for a grapefruit juice, and I took my cue from him and had a shandy. It was a very sober and serious meeting. Nick was impatient.
‘Come on,’ he said. ‘We’ve got to get this done.’
‘Well,’ I said, ‘first you’ve got to give me absolute authority to do anything I think needs to be done.’
‘Yes, I understand that,’ said Nick.
‘I don’t want to report to the shareholders at Board meetings for the first twelve months. If I don’t eliminate the debt and turn the corner into a general operating profit within twelve months, I go back to enjoying the helicopter game as if nothing had ever happened. ‘
‘What do you want to do the job?’ asked Nick.
‘I don’t want any money, but I do want a stake in the company.’
Sir Brian Mountain, a good friend and shooting enthusiast with whom I’d stayed at his home in the South of France, spoke up. ‘In the circumstances Alan, we’d like to give you a proper remuneration.’
‘Well,’ I replied, ‘you’re giving me a chance to do something very different, an enormous management challenge, and quite frankly it appeals to my ego. I don’t want any pay, but I would like twenty per cent of British United Airways.’
It was a major gamble on my part. Pulling BUA back from the brink was a tall order. If I rescued the airline, I could do very well out of it. If BUA couldn’t be saved, I was working for nothing. To my surprise, the shareholders agreed to my terms without debate.
‘Just to make things crystal clear,’ I said, ‘I can appoint whomever I like without asking your approval, I can shut the company down without consulting you, I can raise capital to buy new aircraft without having to refer to the Board, and I can have all this in writing.’
There was a certain amount of sucking of teeth, but eventually it was agreed. And not only did they agree to it, but they stuck by it, too. Towards the end of the meeting, Brian Mountain spoke again.
‘Alan, we don’t think you should be completely on your own in this. We’d like you to have one member of the Board to whom you can refer if you need to, and we think that should be Nick Cayzer. He’ll be chairman of BUA, and you’ll be deputy chairman and chief executive.’
I had no problems with that. I’d always got on very well with Lord Cayzer, whom I respected enormously as a great business brain. I left Hill Street confirmed as the man in charge of British United Airways, and thus began a three-year ego trip. Max Stuart-Shaw was made deputy chairman in charge of research and development, and since we weren’t doing any research and development he saw through the offer and resigned. I went back to my colleagues at Bristows and explained the situation to them.
‘I’ve been given the chance to rescue BUA, and I’ve taken the job,’ I told them. ‘They’ve given me absolute authority to do whatever I see fit with the company. I’ll have to give at least five days a week to BUA and only two to Bristow Helicopters, so you, George, will have to step up. If I haven’t turned BUA around in a year I’ll be back full-time, but I hope and expect that it will go on rather longer.’
I was appointed on a Friday, and the following Monday I turned up at BUA’s offices in Gatwick as the new boss. My girlfriend at the time, Diana Mounsdon, was chief stewardess of BUA, and in order to forestall the problems that can arise when the boss is having an affair with a senior member of the staff on the quiet, I turned up in my Rolls-Royce that morning with Diana sitting alongside me. There were some extraordinarily good people at BUA, especially those who’d worked closely with Laker, but almost everything else was wrong – they had the wrong aircraft, the wrong routes, and the wrong attitudes. Costs were out of hand. My first target was the white elephant of Portland House, BUA’s London headquarters. I thought having seven floors in a prestigious building was an extravagant waste and I was determined to get rid of it. Not only would it reduce our costs, but it would impress on the staff that we needed a change of mindset – we were not BOAC, and the sooner we realised it the better. I arranged with Norman Payne, who ran Gatwick for the British Airports Authority, to have a collection of Portakabins installed in a car park and for all the staff to move there. It was a big job – BUA employed more than 2,000 people at the time. I was visited by a union official called Clive Jenkins, with whom I was to have several battles. He told me I couldn’t just expect employees to give up working in central London for jobs at Gatwick.
‘How many of them live south of the river?’ I asked him.
‘I’ve absolutely no idea,’ he said.
‘How many object to the move?’
‘I don’t know,’ Jenkins went on, in his strangled Welsh accent. ‘But that’s not the point, Mr Bristow. You can’t just move people around like toy soldiers on a table. I don’t think you understand trade unionism.’
‘BUA is in a serious crisis,’ I said. ‘I’m here to eliminate £16.2 million worth of debt and to get a very sick airline back into profit. I think you’ll find that most of our employees will be perfectly happy to go to Gatwick, because the alternative is for them to have no jobs to go to at all.’ In fact, it turned out that the majority of BUA employees lived south of the river and were happy to make the move, and as a side-effect, we were able to stop paying the London Weighting Allowance, which improved the profit and loss account. BUA was also able to get out of the rental agreement at Portland House by passing the lease on, and even made some money out of it.
Dealing with BUA’s unions was a wholly new experience for me. Luckily I had at my side Mick Sidebottom, who had been Freddie’s gofer and who knew the protocols. Mick was extremely efficient and had a complete understanding of all the arrangements we’d agreed with the unions, and I had to lean heavily on him, on our sales director Ted Bates and on the chief financial officer Nick Nickalls for advice on union matters. I also had an excellent chief pilot in Captain Mac MacKenzie, a supremely reliable planner in the form of Alastair Pugh, and Freddie’s old secretary Pauline Jarvis, who knew more than most about how the airline business worked. The company had been rudderless and the workforce was demoralised, but the change of command had the effect of energising them and instilling a far more positive attitude. They knew the ship was heading for the rocks and I looked like a lifeboat, so there was little internal resistance to my plans.
A fortnight after I’d taken over, Mick Sidebottom came into my office with a letter. ‘Mr Bristow,’ he said, ‘I’ve had a communication from the British Airline Pilots Association requesting a meeting to talk about amendments to their existing agreement.’
‘Sound like trouble,’ I said. ‘Better have them in.’
A room was set aside for the meeting. The BALPA contingent, headed by a militant called Captain Norman Tebbit, tabled a series of demands. They wanted to hold us to ransom, demanding increases in this thing and that, better insurance, more time off, a reduction in hours flown, everything that cost me money – plus an increase in wages. We had around 300 pilots on the payroll at the time, and Mick Sidebottom quickly calculated BALPA’s demands were going to cost BUA between £2 million and £2.5 million a year. This was most unwelcome, and I made my displeasure clear to Tebbit. In retrospect, I’m not sure how far Tebbit’s heart was in his work. He eventually became an anti-union cabinet minister in a reforming Conservative government, and whenever I had dealings with him in the 1980s, neither of us referred to his days as a union militant.
Tebbit had brought with him a firebrand lawyer called Mark Young, the l
eader of the BEA pilots at BALPA, Captain Lane, and the union’s general secretary, Air Commodore Philip Warcup. I invited Mick Sidebottom, Nick Nickalls, Ted Bates and Alastair Pugh. Like Tebbit, Air Commodore Warcup seemed uncomfortable in his role. ‘You’re on the wrong side of this table, Warcup,’ I told him. ‘You ought to be over here helping me to get a bankrupt company solvent, rather than over there trying to milk it to death.’ Warcup shifted uneasily in his seat. ‘Anyway, I can’t afford this,’ I went on. ‘If you pursue your claim, I’ll just have to shut the company down.’
That got Tebbit’s attention. ‘You can’t do that,’ he said.