Last revision May 4, 2001
Emergence 1966-1970
EOAC was founded in 1966 by a business consortium in an early attempt to break
into the airline industry then controlled by the national airlines. Initially
the airline was successful, forging an alliance with and gaining support from
one of the largest corporations of the time and flying scheduled routes, charters
and cargo routes on behalf of the same airline.
The Industry Overcast 1970-1980
By 1970 EOAC operated out of major hubs at London, Birmingham, Liverpool and
Bristol in the UK, and had opened bases at Geneva, Berlin, Paris, Rio de Janeiro,
Tokyo and Hong Kong. In four short years the fleet had grown to more than
80 aircrafts. The last years of the 1960s had been a difficult time for the
smaller British airlines and the powers behind EOAC had enlarged the fleet
through an aggressive strategy of new orders and the purchase of existing
fleets. It is little wonder that EOAC never once saw a profit in these early
years. However the EOAC board was confident that their alliance would pay
off and still more aircrafts were ordered. As the British aviation industry
stalled the board turned to the US manufacturers and placed huge orders with
Lockheed and Boeing. Not wishing to be left behind, an order was placed for
Concorde. Sadly, it would not last.
In 1974, as Britain's airlines were restructured by the government the hammer
fell. EOAC found it's partner no longer interested in maintaining flights
operated by a privately owned company. Now in desperate trouble, fighting
for slots at the former UK bases of operation and facing hard competition
for customers, EOAC were forced to withdraw from the UK market. The Berlin
operation was closed. Rumors abounded of unfair practice behind the scenes
but nothing was ever proven and the subsequent legal wrangles only cost the
company more money.
By 1975 the airline had withdrawn to Geneva and were selling or leasing it's
aircrafts out. The airline industry was in poor shape, however, and the fuel
crisis, industrial disputes and other events had hurt EOAC badly. In nine
years of operation there had never been a profit. There was little room for
maneuver either. Most scheduled airlines, as members of IATA, had to accept
air fares worked out at traffic conferences and approved by governments. All
kinds of practices were used by operators to cut rates illegally and many
were fined for this malpractice. Some operators set up non-IATA subsidies
which competed with everyone, including the parent airline. Like most airlines
EOAC had to stop and think and many doubted that the airline would go on.
In June of that year the management board of EOAC met with the shareholders
to thrash out the future of the airline. Early on it was apparent that the
shareholders were in no mood to give up on the venture. Too much had been
invested and aviation was still expanding. The losses, however had to stop.
The management team were given five years to turn the airline around.
Older aircrafts were sold off or converted to cargo and the fleet reduced
in size. In 1974 the fleet stood at 132 aircrafts. By the start of 1977 this
had been reduced by more than 30% and some level of stability achieved. EOAC
was still loosing money, but at least it was no longer disappearing faster
than it could be counted. Finally, in 1979 the airline made a profit.
Despite this turn around there were still problems. The regional fleet in
particular was in urgently need of replacement, indeed very few of the aircrafts
on the fleet could actually be described as fuel efficient.
Reinventing 1980s
Fuel prices again rose in 1979 due to instability in the Middle East and EOAC
reported another loss in 1980. The investors, however had seen enough and
moved to secure the future of EOAC. More funds were made available and the
airline continued at a loss.
Eventually new aircrafts were ordered. Traffic from Geneva steadily rose and
by the end of the 1980s, after enormous investment the European Overseas Airways
Company was finally generating a profit. Not having the size to compete with
the national carriers EOAC opted for a different approach, offering luxurious
and spacious cabin appointments, even on regional routes. Fending off hostile
and sometimes questionable tactics by larger airlines EOAC continued to grow
steadily through the troubled 1980s. Finally, in 1989 EOAC launched their
first expansion in almost twenty years with the opening of facilities at Brussels
National. At the same time Paris operations were moved to Charles de Gaulle.
Growth 1990-2000
The 1990s have been kinder to EOAC. Further expansions at Geneva and improved
political conditions within the airline industry have allowed EOAC to expand
with more freedom. The rapid rise of Brussels National as a major airport
and as 'capital' of Europe, the opening of the skies to free competition between
airlines and the growth of air traffic have all combined to make EOAC a strong
and viable airline. As other airlines have pulled out from Geneva, EOAC have
expanded and now can be considered as one of Europe's strongest airlines.
Further expansions are planned and EOAC has now completed it's long held dream
to re-enter the UK Market.
Today and beyond
Despite the mounting costs the future for European Overseas is nothing if
not ambitious:
For the European Division, known in the internal division structure as EAC,
the future looks very bright. After some ten years of investment, a new fleet,
the deregulated operating environment and the move back to the UK all combine
to give an optimistic future. Recently the company has sought to spread it's
costs by inviting regional airlines to tender for franchise operations in
order to spread costs. EAC has consistently turned in a profit for the last
seven years even including the costs of deliveries of the new Airbus A320
aircrafts.
The long haul arm of the company is also looking healthy although less financially
secure. Despite the huge costs this division has incurred (the move to Heathrow,
huge orders with both Boeing and McDonnell Douglas) it is still seen in many
ways as the flagship service of EOAC. As such and despite the current restructures,
the EOA division's future is assured so long as the shareholders maintain
their stance.
For the Far Eastern Division things are looking up. The economic troubles
of the region have proved costly for EOAC but rumours that EOAC will reduce
it's presence there in order to balance the books and finance it's European
expansion have proven to be unfounded.
European Overseas Americas, based in Rio de Janeiro have still not turned
in a profit since the division's foundation in 1968 Despite this, recent restructures
seem have been successful, with significantly greater passengers being carried
at lower costs during the last financial year. Added to this, the 'exclusivity'
of the South American division almost guarantees that the division will continue
in its present form for some time.
The final question that hangs over EOAC is de-merger. In certain quarters
(among rival airlines in particular) there have been calls to untangle the
web of ownership that hides behind the company. What is certain is that the
companies shareholders, a mixture of European and worldwide corporations,
have ties and relationships extending far beyond the airline. Ownership of
the airline seems to vary depending on the economic necessities of the moment
and this has earned some enemies as previously unknown shareholders make sudden
appearances to intercede on the airlines behalf at just the right time. While
the airline maintains a certain stately dignity it is almost certain that
at some time the de-merger will actually occur and that the corporate background
will be exposed.
Until then, the flying will remain.
Related items:
Fleet History - EOAC fleet throughout decades.
History Forum - discuss virtual timeline, real historical events of the airline industry and how they affected development of EOAC. Add your touch to the virtual life of our fine VA.