bid, which valued British Caledonian Group at £36 million, in May 1986. (That bid materialised after several rounds of inconclusive talks exploring ways of combining the short-haul businesses of Air Europe and British Caledonian (BCal) in a new joint venture, which had taken place between ILG and British Caledonian Group since the end of 1985.) At the time BCal's senior management dismissed ILG's bid as "derisory" because it valued the entire British Caledonian Group's assets far below their minimum expectations. ILG decided to launch a new counter bid for the entire British Caledonian Group at the end of July 1987, following British Airways' outright rejection of ILG chairman Harry Goodman's offer to purchase BCal's short-haul operation for a fair price and to merge that operation with the short-haul operations of ILG subsidiary Air Europe, in return for not having the proposed BA-BCal deal referred to the Monopolies and Mergers Commission (MMC). Air Europe was concerned that a new entity combining BA and BCal had the power to destroy the UK's remaining independent airlines, especially with regard to their ability to compete with such a behemoth. At the time Air Europe had ambitions of its own to become a major short-haul scheduled operator. It was planning to launch eleven new routes from Gatwick to Europe, thereby replacing and enhancing the services BCal had provided. Given a combined BA-BCal's superior financial strength, considerably lower borrowing costs and far greater economies of scale, Air Europe's management felt that it would be imprudent to launch these new routes if it had to compete with BA out of Heathrow and Gatwick as well. Therefore, its parent ILG had decided to make a counter bid, which it hoped would either kill off BA's proposal to take over BCal lock, stock and barrel or result in it being referred to the MMC. To enhance its credibility as a serious contender, Air Europe's bid contained a detailed proposal to return BCal to profitability by way of a reorganisation. This proposal had been prepared by a retired BA head of route planning whom ILG had specifically hired for this purpose. The proposal itself entailed separating BCal into four discrete businesses, each of which would have had its own management who would have been accountable for the performance of their own business unit. The businesses into which BCal was to be split included a long-haul operation using the existing BCal