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History of EOAC

Glorious Flying - Style Matters

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By 1975 the airline had withdrawn to Geneva and were selling or leasing it's aircrafts out.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.


 


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