Easy Come, Easy Go: The History of Go Fly
When the low-cost revolution began in the UK and Europe in the late 1990s, legacy carriers such as British Airways (BA) were slow to react.
When the low-cost revolution began in the UK and Europe in the late 1990s, legacy carriers such as British Airways (BA) were slow to react.
DALLAS - When the low-cost revolution began in the UK and Europe in the late 1990s, legacy carriers such as British Airways (BA) were slow to react as they believed these new entrants would never last.
But as emerging airlines such as easyJet (U2) and Ryanair (FR) began to eat into BA's passenger numbers, CEO Bob Ayling knew he needed to react. So, he launched 'Project Lupin' to look at ways in which BA could compete with these new low-cost carriers (LCCs).
At first, Ayling looked at purchasing FR or U2, but talks with both soon fell through. It was then decided that BA would create its own no-frills spin-off.
Ayling wanted a completely independent company to run alongside BA, free from its high costs and expensive overheads. It needed to compete directly with its low-cost rivals while complementing rather than cannibalizing its short-haul network.
British Airways' New York General Manager Barbara Cassani was brought in to head the project. Like many LCC bosses before her, she headed to Dallas, home of Southwest Airlines (WN). But rather than visit Her Keller, Cassani went onboard as she wanted to focus on customer service, something she felt was lacking with her rivals.
On November 17, 1997, BA announced its new LCC known as 'Operation Blue Sky.' With a starting capital of £25m, Cassani sourced three Boeing 737-300s and announced its new base as London Stansted (STN).
The fledgling airline had a base and aircraft, but still no name. Numerous suggestions were put forward, including 'Blue Sky,' 'Osca Airlines,' and 'A to B', cleverly spelling BA backward. On January 30, 1998, it was revealed the carrier would be christened 'Go Fly' with Wolf Ollins designing the retro sixties style logo and branding.
Cassani and her team worked hard to get ready for Go's launch. However, both U2 and FR attempted to stop the new airline. Both claimed that Go was being created to drive them out of business. The outspoken boss of FR, Michael O'Leary, said, "BA has no idea how to run a low-fare airline."
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O'Leary added, "I know more about flying Concorde than Bob Ayling does about running a low-cost airline, and I've never flown on Concorde."
easyJet went further and initiated a High Court Civil Aviation Action against BA. Despite gaining some high-profile support from Sir Freddie Laker and Sir Richard Branson, easyJet's case failed. Go was allowed to fly, and instead of grounding their newest rival, it simply created more publicity.
On May 22, 1998, Go's maiden flight took off from STN bound for Rome (CIA). Initial routes from STN included Milan (MXP), Copenhagen (CPH), Bologna (BLQ), and Lisbon (LIS).
The airline added further new routes, but Go was losing money. In June 1999 'Operation Summer Sun' was announced to tap into the lucrative 'bucket and spade' market from the UK to Mediterranean hotspots.
When BA boss Bob Ayling left the airline in early 2000, his successor, Rod Eddington, immediately made it clear he had no intention of keeping Go. On November 6, 2000, the subsidiary was put up for sale. Interested parties included rival easyJet (U2) and Dutch flag-carrier KLM (KL). But it would be venture capital company 3i who took on the business in June 2001 for just £100m.
With new owners came a new outlook. Passenger numbers were expected to grow from 2.8 million in 2000 to closer to 4 million in 2001, and the plan was to open a new base each year for the next three years. Bristol (BRS) came first, opening in March 2001. Cassani then looked at the East Midlands (EMA), Newcastle (NCL), Edinburgh (EDI), and Glasgow (GLA) for further expansion.
The airline subsequently chose EMA, with the new base opening on March 14, 2002. The carrier served six routes initially, including Alicante (ALC), Malaga (AGP), Faro (FAO), Prague (PRG), GLA, and EDI, with 56 departures per week.
A mini-hub was also established at Belfast International (BFS), with flights to STN, EDI, and GLA flown twice daily.
Go was going from strength to strength. Discussions with 3i after the takeover revolved around the airline's flotation, which would allow its planned US$2bn aircraft order. The airline was looking at both Airbus and Boeing, which offered competitive rates following 9/11.
The carrier grew to become the third-largest LCC in the UK, with 38 routes and 24 737s in its fleet. Despite the industry downturn after 9/11, passenger numbers were increasing, with Go's average load factor an impressive 76.5%.
However, rivals FR and U2 had both approached 3i with a view to buying Go. FR's approach came to nothing, but U2 was keen to push forward with a takeover. In December 2001, easyJet put in an offer of £390m in cash and U2 shares.
Management subsequently rejected the offer. But U2 persisted and upped their bid to £400m. Despite announcing a four-fold increase in pre-tax profits to £17 million for the year ending March 31, 2002, 3i suffered mounting losses and eventually agreed to hold exclusive talks with the Luton-based carrier.
On May 16, 2002, 3i announced that they had accepted the deal. Go was purchased for £384m. The airline's final flight took place on March 29, 2003, between STN and Nice (NCE).
The acquisition temporarily made easyJet the largest low-cost airline in Europe overnight, with its fleet increasing to 54 from 30.
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Featured image: G-IGOE was the airline's third 737 to join the fleet. It would join easyJet following the takeover. Photo: kitmasterbloke, CC BY 2.0, via Wikimedia Commons.
