Despite facing a major crisis, BCal continued adding new aircraft, routes and flight frequencies in an effort to maintain a competitive operation. Two more 747s joined the fleet during 1986. This permitted a major capacity increase on the popular Gatwick—Dubai—Hong Kong route. During that year, Muscat, Gaborone and Aberdeen joined the network. BCal's acquisition of a fifth 747 the following year permitted the launch of a new route from Gatwick to Tokyo on 31 May 1987, at a frequency of three return flights per week. In addition, for the first time in five years, two new European routes were launched from Gatwick. These served Milan Linate and Nice at a frequency of 13 and three return flights per week, respectively. By July 1987, BCal had already exhausted most of the proceeds from the asset disposal programme. The proceeds from the sale of two DC-10s to Continental Airlines was all that was left to keep the airline in business. Senior management realised that the company was unlikely to survive on its own and that it needed to act fast if it wanted to avoid BCal's collapse. Therefore, the search for a financially strong partner acquired a renewed sense of urgency. Several rounds of talks that were aimed at achieving a full-scale merger ensued with various airlines in the UK, the US, Canada and Europe. BCal's future prospects as a stand-alone, medium-sized airline operating a variety of short-, medium- and long-haul scheduled services were rapidly diminishing against a background of looming consolidation in the airline industry. This was driven by the giant US carriers that had begun channeling their traffic flows into powerful hub-and-spoke operations, rather than feeding these into the networks of BCal and other international partner airlines, in the wake of US deregulation. In addition, BA's impending privatisation and the Government's refusal to fully implement the recommendations contained in the CAA's airline competition White Paper meant that BCal was unable to acquire the economies of scale it needed to compete with these airlines on a level playing field. This prevented BCal from achieving higher volumes over which to spread its fixed costs. It also deprived the airline of the capacity to generate the funds to continue investing in fleet renewal, further network expansion and new information technology systems. BCal's basic dilemma at the time can be summed up as follows:  It had become a mid-sized airline that was too big to be a specialist, niche operator. Yet it was too small to effectively compete with BA and the US giants in terms of economies of scale and scope.