Alan Bristow

by Alan Bristow

  ‘Nick, we’re going to make money on these aircraft,’ I told him. But he didn’t seem convinced.

  I also bought two more VC-10s, one to replace a damaged one, in order to be able to get rid of the propeller-driven Bristol Britannias, and I began negotiating to buy a used Viscount to service a new route. Harold Bamberg’s British Eagle International Airlines had one for sale and I sent Bill Richardson to Heathrow to look it over, specifying that the engines had to have at least half their allowable lives left. Bill called me next day. ‘It’s a good ’un,’ he said. ‘I’ve seen the engine logbooks and they all have plenty of hours left.’ I arranged with Bamberg to buy the aircraft subject to a full inspection at Gatwick, and it was flown down.

  A couple of days later, Bill Richardson called me again. ‘We’ve been screwed,’ he said. ‘This isn’t the aircraft I saw at Heathrow. None of the engines have more than a couple of hours left on them.’ It turned out that Eagle had switched all four engines after Richardson’s inspection. Eagle was in desperate trouble – the manner of their bankruptcy in 1968 was a stark illustration of the difficulties of operating an independent airline in those days. BOAC complained that Eagle was trying to turn a charter operation to the Caribbean into a scheduled service. The Air Transport Licensing Board revoked Eagle’s authorisation to fly there, cutting about five million dollars from Bamberg’s revenues and finishing him off. Bizarre though it may seem now, the market was strictly regulated by the International Air Transport Association, which took the view that competition between airlines would compromise safety and fixed the fares so that inefficient state airlines could maintain their monopolies. Not only that, but international routes worked on a bilateral basis, so in most cases only one airline from each country could fly a route – and getting a licence from one country didn’t guarantee that you’d get a licence from the other. Charter operators were always trying to get around the rules. By IATA diktat, only ‘affinity groups’ whose main purpose was not travel could charter aircraft, and anyone who flew had to have been a member of the group for six months. Of course, this led to the growth of all sorts of organisations like the Dahlia Society and the Left Hand Club, and back-dated membership was available at some airports. Freddie Laker himself was fined for carrying bogus rose growers to America, and all of this nonsense did nothing for safety and a great deal to promote inefficiency.

  BUA was constantly walking on eggshells with the regulators while desperately driving out costs. I stipulated that we had to get more than 2,000 revenue hours every year out of every aircraft, and we achieved almost 2,500 with some. Then we had to fill them. Ted Bates and Alastair Pugh were given the task of getting the load factors up. They had to get our agents to work better, and they did, with some inspired incentives that didn’t compromise our profitability. I was very impressed by one of Pugh’s schemes to build traffic on a new route to Hong Kong, for which there was at that time virtually no market. Pugh sent the pilots into every Chinese restaurant in Britain to offer the owner a return ticket for £90, thus kick-starting demand.

  One of the compensations of working at Gatwick was that I could park the Yellow Peril under my office window, and the flight home took five minutes. Sometimes I’d be held briefly by Air Traffic Control for a landing airliner, but otherwise I came and went as I pleased. I also enjoyed spending time on the hangar floor, talking to the sweepers, the refuellers and the engineering foremen, or discussing operational matters with pilots in the crewroom. The days were long – I even had to give up golf, that’s how bad it got – but our cash flow improved from the first week and new ideas kept increasing revenues and driving down costs. With more than 300 pilots and 400 cabin crew, the bill we had to pay BOAC for statutory medical checks was astronomical. I hired Peter Chapman, a young doctor from the RAF Institute of Aviation Medicine at Farnborough who had done a lot of the medical research for Douglas Bader’s paper on pilot duty hours – the Bader Report still forms the basis of the flying time regulations of today. Chapman set up a medical department in one of BUA’s Portakabins, saved all the money we’d been giving BOAC and took on all medical work at Gatwick, eventually turning the medical centre into a profit-making operation.

  With my other hand, of course, I was still running Bristow Helicopters. In fact, George was making an excellent job of it, and while I spent a day or two a week in Redhill, there was rarely any drama. I spoke to George every day, and to my Redhill secretary Valérie. There was only one real problem while I was away, and I have to take responsibility for it. George had rung me one day and said BHL could buy a job lot of Agusta-Bell 206 JetRangers at a preferential price of about $70,000 each.

  ‘How many?’ I asked.

  ‘We can get fifteen.’

  The helicopters were built under licence in Italy. ‘Are the parts interchangeable with the American ones?’ I asked.

  ‘Absolutely,’ said George. ‘The tolerances are the same.’

  ‘But we haven’t got a contract to use them on, have we?’

  ‘No, but you know what you always say about the fashion parade, Alan – BHL must offer the latest, best-equipped helicopters or the customers will look elsewhere. If we get these helicopters, the work will come.’

  Offhandedly, and foolishly, I told him to go ahead. I don’t know why he wanted fifteen; probably a show of bravado. But these helicopters were delivered while I was at BUA, and BHL had a hell of a time with them. We were the guinea pigs for an Allison engine that kept failing. No one was killed, but it caused a lot of damage and it took years to sort out. We were self-insured, so we couldn’t claim on anybody and had to fix everything at our own expense. Needless to say, American parts didn’t fit because Italian manufacturing tolerances were so sloppy. Its high-inertia rotor made it a good helicopter to land engine-off, and it needed to be. I accused George of bouncing me into a bad decision when I was preoccupied, but I can’t shirk the responsibility. But with the exception of the JetRanger issue, BHL ran smoothly.

  Before I knew it, a hugely enjoyable year had gone by. Even without looking at the figures I knew we had made enormous strides towards returning the airline to profitability, but when I got the actual numbers from Nick Nickalls I was able to demonstrate to the Air Holdings Board that there was black ink on the bottom line, that we had pulled back from the brink, had restored value to the airline and were moving into more profitable territory for 1968. The shareholders heaved a sigh of relief, but their determination to sell was undiminished. We went on trying to buy our way into new business by expanding our scheduled service routes, but because of the way the industry was structured, it was very difficult to find profitable destinations. BUA turned a profit again in 1968, by which time the government had recognised that the industry was grossly out of balance and had set up a committee headed by Sir Ronald Edwards to review the future of civil aviation. The state-backed corporations BEA and BOAC – soon to merge into British Airways – were ten times the size of any independent airlines, among which the two major players were BUA and the charter airline, Caledonian Airways. There were a number of smaller, fragmented airlines trying to survive, like Michael Bishop’s Derby Aviation, recently renamed British Midland. I gave evidence to the committee but left the day-to-day representation to Alastair Pugh.

  There were some sensible and intelligent people on the Edwards Committee, including my old friend Sir Philip Shelbourne, although he remained neutral and did me no special favours. There was an economist called Stephen Wheatcroft who knew something about airlines, and oddly enough, a fairly impressive trade unionist, Rodney Bickerstaffe, who had a talent for cutting through the clouds of verbiage and getting to the nub of the matter. They sat for a long time taking evidence from airlines, and their report, ‘British Air Transport in the Seventies’, recommended wholesale changes in the way the industry was regulated, including the formation of a Civil Aviation Authority. The outcome was seen to be crucial to the future of BUA, and the key recommendation concerning the independent airlines was that BUA
and Caledonian Airways should merge into a single company, to create a ‘second force’ in aviation to balance the corporations, and should on that basis be granted different routes. It became necessary for me to arrange an accommodation with Caledonian Airways, which in effect meant selling the company to Caledonian because with BUA back on an even keel and making profits, the shareholders wanted to recoup their investment. I briefly examined the possibility of a management buyout with the Commandos, but we couldn’t raise the wind.

  I knew Adam Thompson, Caledonian’s founder, very well. He was an ex-Navy pilot, a good businessman and a reasonable golfer – he played off ten. I used to go up to Gleneagles to stay with Adam and his wife Dawn, but Caledonian was only a fraction of BUA’s size and he couldn’t raise the £32 million required to buy out Air Holdings. Adam had a financial advisor from the Royal Bank of Scotland, a very helpful chap called Trevor Bond, but he couldn’t see how Caledonian could raise the capital required. At Air Holdings Board meetings there were long discussions about how deals might be structured, but none of them stood up to scrutiny. Eventually I suggested: ‘Why don’t we do a lease-purchase deal?’ The idea was dismissed fairly peremptorily, but after the meeting, British and Commonwealth’s finance director Jim Thompson came to me.

  ‘Alan, do you know any company that’s done a lease-purchase deal like this?’ he asked.

  ‘No, I don’t. But I can’t see anything in the way of it, provided a joint Caledonian-BUA operation has cash flow enough to meet the payments.’

  Jim Thompson got together with Caledonian, and they did a simple sketch on the back of an envelope to show how it would work. A deposit of three and a half million was agreed, with sixty monthly payments to make up the balance. At first Caledonian couldn’t raise the deposit and talks were broken off, but eventually they managed to find it. We were effectively ‘going banker’ for Adam Thompson. One of Caledonian’s stipulations was that as far as the public was concerned, Caledonian was buying BUA, and it was agreed that no one should talk about the deal in any other terms until after the final payment, at which point it became true. In 1970, the company became Caledonian BUA, later changed to British Caledonian, and by 1975 Adam Thompson owned all of it. He defaulted on only one monthly payment; Nick Cayzer called me in to discuss it, and I advised that Caledonian be given a little leeway because I thought they were good for the money. And indeed, they were.

  Freddie Laker and I remained good friends for life, and he kept me abreast of developments as he set up Laker Airways and took on the major airlines at their own game. Unfortunately it all came to a sticky end, and in 1983 Touche Ross, as liquidators of Laker Airways, began an anti-trust action in America claiming a billion dollars from ten airlines who were accused of predatory pricing in order to drive Laker off the North Atlantic. British Airways, Pan Am, TWA and Lufthansa were accused of having conspired to plot Laker’s downfall. Some airlines had run loss-making services against him, others had bracketed his schedules, running flights immediately before and after his to ruin his trade. Several airlines had threatened McDonnell Douglas that they would buy their aircraft elsewhere if it agreed to extend new terms to Freddie, who still owed money on the DC-10s he was using. Touche Ross had a good case; the American Justice Department had found the evidence in a school project by the daughter of a McDonnell Douglas director.

  Freddie had made an enormous success of Laker Airways – too much of a success for the major airlines to stomach. He’d tried to interest Myles Wyatt in a ‘cheap and cheerful’ North Atlantic service when he was running BUA. I was in favour of it, but it was always a marginal thing and the shareholders didn’t care for it. Even if it worked flawlessly you made three per cent gross. But when Freddie was working on his own account he played it beautifully. His DC-10s were cheaper to run and less maintenance-intensive than BUA’s VC-10s and he didn’t have to cope with the overheads he’d had at BUA. He ran Skytrain as a de facto charter – you line up, sleep outside, get a seat for £49 and the load factor is always 100 per cent. Freddie got money at six per cent from a Japanese bank and had backing from Eric Knight at Lombard, the same man who helped me buy my Bell 47s for the first Shell contract in Bolivia. But Skytrain’s success was undermined by a cartel of airlines and in 1982 it went bust owing £35 million to creditors, staff and passengers.

  The resulting anti-trust action threatened the planned privatisation of British Airways, and BA’s Chairman Lord King was keen to get it settled. Freddie had taken the cheap option and hired an American lawyer on a no-win, no-fee basis. I told him he was making a mistake, but Freddie said the all-or-nothing approach would make the lawyer all the more hungry. This lawyer had somehow convinced Freddie he’d personally get £36 million – don’t ask me how the figure was arrived at. Freddie kept me abreast of developments, but I was in a difficult position because I’d known John King since his days at Pollard Bearings after the war, I rode to hounds with him, we shot together and we got on well. At one of the regular luncheon parties King ran to make sure we all carried on supporting Margaret Thatcher after the 1979 election the subject of Laker’s lawsuit came up. Lord King knew he was in the wrong, but he waved his hand dismissively. ‘It’s just an irritation, Alan,’ he said.

  ‘It might be an expensive irritation for you,’ I said.

  ‘I’d like to get it out of the way, but he’s been bloody silly,’ said Lord King. ‘He’s got himself a £36 million claim, and it’s just ridiculous.’

  ‘How much of an irritation is it?’ I asked.

  ‘Well, I suppose six or seven million would be the lot,’ he said. ‘You’re an old friend of Laker’s. Perhaps you can bring him to the table.’

  ‘I know both of you pretty well,’ I said. ‘If I can help, I will.’

  It would have been better to stay out of it, because whatever advice I gave was likely to upset one or the other, or both. Soon afterwards Freddie called me. ‘Can you lend me half a million?’ he asked.

  ‘What for?’

  ‘I have some debts I would like to pay.’

  I suspect it was to keep his stables running, but I was happy to help him out. ‘Of course I will,’ I said. ‘You can give it back when you’ve settled with John King.’

  ‘There will be plenty of money to go round on that day,’ Freddie said.

  ‘I hope so,’ I said. ‘I spoke to King the other day and he’s very anxious to get shot of the whole bloody affair. Between you and me, I don’t think your lawyer’s advising you very well.’

  Freddie bridled. ‘What do you mean?’

  ‘Don’t snap at me, man. I’m trying to be honest here.’

  ‘I’m sorry. What did King say?’

  ‘Well, as far I can ascertain from a conversation with King they’re talking about six or seven million.’

  Freddie was incredulous. ‘Don’t be daft, Alan. My man says £36 million.’

  ‘Yes, this is where the problem has arisen, Freddie. Your chap seems to think he can get out of a British court the kind of money he might get out of an American court, and it’s just not going to happen.’

  ‘How do you know King’s serious?’ Freddie asked.

  ‘I’ve known him a lot longer than I’ve known you, Freddie. There’s no doubt he accepts they’ve been naughty boys at British Airways, but £6 million is the order of the money and if you don’t take it you’re going to court. The court won’t be any more generous than that, and you could end up with nothing. British Airways can spin it out a lot longer than you can. Financially, you can’t hang on much longer.’

  That was a nasty punchline, but it was true. I tried to soften my tone. ‘For goodness sake Freddie, don’t put your head in the sand and listen to your lawyer, listen to your old friend Bristow – take what King’s offering.’

  ‘I can’t do that.’

  ‘Fred, I have no other advice for you. If somebody’s got a loaded pistol at my head and says he wants to pay me £6 million to put it down, I’d give it very serious thought. He’s got a gun
at your head and he’s making you an offer, and you’re listening to your American lawyer who’s saying the gun’s not loaded.’

  ‘But he destroyed my company!’

  ‘Well, them’s my words, Fred.’

  Freddie sighed. ‘I appreciate that Alan. I’ll take you up on that half million, I’m sure I shall need it.’

  A short time later a meeting was arranged on Jersey – neutral territory – between Laker and King. King offered six and a half million pounds, and Freddie had the good sense to accept it. Freddie went off to live in Florida, and when we spent Christmas together on my boat in Grand Bahama he was in good humour. Apart from paying Laker the £6 million, British Airways contributed to a £35 million pot to pay off Laker’s creditors. Lord King privatised the airline successfully, and I met him very rarely thereafter until the day in 1986 when he called me into his office to offer me a knighthood, an offer that was to destroy our friendship for all time.

  CHAPTER 18

  Shooting for Business

  The first oil to come out of the North Sea was brought up by an Amoco-led consortium whose semi-submersible rig Sea Quest, on charter from BP, drilled well No. 22/18-1 in the Arbroath Field in May 1969. A sample was decanted into a pickle jar appropriated from the Sea Quest’s canteen and carried ashore by a Bristow helicopter. They gave me a few drops of it as a keepsake, in a thing the size of an aspirin bottle, and for many years it sat on a shelf in my office. It’s probably worth something now, if I could find it. North Sea oil is taken for granted today, but its discovery and exploitation is by far the most important economic development in the UK in my lifetime; I shudder to think what life would be like in this country without it. Hundreds of billions of pounds have been drawn out from below the seabed to create the Britain we know today. It is probable that North Sea oil could have been exploited without using helicopters, but it would have taken far longer, cost far more, and returned far less. Because of its vital contribution to North Sea oil exploration and development, the helicopter helped to shape modern Britain.