Lloyd International Airways Ltd was a private, British independent airline formed in 1961 to operate worldwide charter flights. It commenced operations with a single Douglas DC-4 piston airliner from Cambridge Marshall Airport. Lloyd International concentrated on passenger and cargo charters with four-engined, long-range aircraft. It also had links in Hong Kong since its inception and flew to the Far East regularly. During the mid-1960s, the airline began re-equipping its fleet with Bristol Britannia and Canadair CL-44 turboprops, all of which featured large cargo doors and palletised freight systems. Long-range Boeing 707 jets joined the Lloyd International fleet during the early 1970s for use on affinity group passenger and freight charters to North America and the Far East. Lloyd International ceased operations in June 1972.
History
In 1960, Brian Lloyd and Alastair Macleod, two experienced shipping managers and shipbroking partners, joined up with chartered accountant John Louis Mingaye Crick and began formulating plans to take over an existing airline as part of a diversification strategy into the airline business. After months of unsuccessfully trying to raise capital for their planned acquisition, financial backing was finally obtained the following year from Bolivian tin magnate J. Ortiz-Patiño and Greek shipping magnate Nicholas Mavroleon to set up a new airline from scratch. This airline was to specialise in Far East "tramping", concentrating on ships' crews and freight. The founders chose the name Lloyd for their new venture. J. Ortiz-Patiño and Nicholas Mavroleon became the respective chairmen of the airline and of Hong Kong-incorporated Far East Aviation Company Ltd, a group holding company.
Lloyd International Airways commenced operations in 1961 with a Douglas DC-4 acquired from Icelandic airline Loftleiðir. Its first engagement was a series of charter flights carrying ship crews between the United Kingdom and several destinations in the Far East. It soon found other charter work for the aircraft, which led to the acquisition of two more DC-4s in 1962.
Lloyd International's first two years of operations were unprofitable, mainly as a result of uneconomic charter rates caused by excess capacity. Other contributing factors included an expensive emergency lease of a replacement aircraft for a DC-4 destroyed in a refuelling fire and high overheads due to a top-heavy administrative structure.
Budgeting and cost control, introduced in 1963, ensured that charterers were only quoted profitable rates. This resulted in a partial withdrawal from the cut-throat British inclusive tour (IT) market and the opening of an office in Hong Kong to capture a greater share of lucrative Far East cargo traffic.
To ensure every single operation showed a clear profit on a full costing basis, i.e. inclusive of all overhead costs, the company required each operation to be budgeted in detail before deciding whether to accept it. The managing director's authorisation was required to dispense with this rule in exceptional cases where the risk of accepting a contract that was only marginally profitable, i.e. excluding overheads, was outweighed by the risk of having an aircraft sit idly on the ground. An immediate financial analysis that compared actual costs and revenues with their budgets followed the completion of each flight, thereby instantly gauging that flight's profitability and validating the effectiveness of the firm's pricing policy. A policy of requiring aircraft commanders to pay for all operating expenses other than fuel in cash proved to be an effective method to exercise instant cost control over fees and charges incurred for products and services supplied by third parties, such as ground handling fees, technical support services and catering supplies.
In addition, the principle of strict cost control was also applied to aircraft maintenance and flight operations. This entailed outsourcing all engineering work as the fleet was too small to warrant Lloyd International setting up its own maintenance department. It furthermore involved "buying" flying hours at a fixed rate. Moreover, through Wheelock Marden, Lloyd International was indirectly associated with the Hong Kong Aircraft Engineering Company. This enabled it to draw on that company's extensive spares pool in Hong Kong. (Other than Hong Kong, Lloyd International pursued a policy of not stationing any spares along regular routes flown by its aircraft. Instead each aircraft carried its own spares kit — usually consisting of a spare wheel and brake — and a ground engineer.)