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| Skytrain to America |
Sir Freddie Laker pioneered the idea of cheap air travel and
introduced the first ‘no-frills’ concept to aviation with his ‘Skytrain to
America’ in 1977.
This entrepreneurial venture
was so ahead of its time that rival airlines conspired successfully to crush his business.
Before Skytrain, international flights were for the rich.
After the Second World War it was thought that competition between airlines might
lead to a dereliction of passenger safety, and so the market was strictly
regulated by the International Air Transport Association.
IATA allowed state airlines to maintain a monopoly offering
identical services at high prices. (By 1971 the only exception was charter
airlines catering for the growing package holiday trade. Under an IATA
rule intended to preserve the monopoly, charter passengers needed six months'
membership of an "affinity group" whose main purpose was not travel,
groups such as the Dahlia Society or the Left Hand Club – see previous post)
Laker, whose airline was being regularly fined for carrying
large numbers of bogus Rose Growers to America, came up with an easier system.
Passengers who wanted a cheap flight could queue for a ticket at the airport,
just as they would at a railway station before taking a train. It took six years
of campaigning and lobbying to persuade the British and American governments to
agree to the idea.
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| Queuing for Skytain tickets at Victoria |
The first Skytrain took off for New York in September 1977. Laker
offered no frills but at £59 it cost a third of any other ticket. He made £1
million profit in the first year, and by 1980 was carrying one in seven
transatlantic passengers.
The other major airlines soon took action, offering cheap fares
for the first time and when Pan Am cut the price of its regular service by
two-thirds in October 1981, Laker's passengers deserted him.
And then, in February 1982, Laker Airways went into
receivership with debts of £264 million. The collapse was so sudden that its
flights were turned round in mid-air! At
first it seemed that Laker had overstretched, borrowing heavily to finance 15
new planes just as the pound fell against the dollar.
But in 1983 the liquidators Touche Ross began an anti-trust
action in America, claiming a billion dollars from 10 major airline and the
allegations went beyond predatory pricing. British Airways, Pan Am, TWA and
Lufthansa were all said to have colluded to plot Laker's downfall.
In particular, several airlines had threatened the
manufacturer McDonnell Douglas that they would buy elsewhere if it rescheduled
Laker's debt. (The Justice Department found the evidence in a school project by
the daughter of a McDonnell Douglas director!)
The action threatened BA's privatisation, and in 1985 the
defendants settled out of court the £35 million owed to Laker's creditors,
staff and passengers. Laker himself reluctantly accepted £6 million in
compensation and retreated to the Bahamas.
Frederick Alfred Laker was born in Canterbury on August 6
1922. His father, a merchant seaman, deserted the family when Freddie was five,
and his mother then worked as a cleaner. At the local Simon Langton School
Freddie did not shine academically but told friends he was going to be a
millionaire. His first job was delivering coal for an uncle.
At 16 he joined the flying-boat builders Short Brothers of
Rochester as a teaboy and apprentice engineer, and studied maths and economics
at night school. In the Second World War he worked for the Air Transport
Auxiliary where he excelled at improvising repairs. He became flight engineer and
then qualifyed as a ferry pilot himself.
By 1946, with a loan from a friend he set up Aviation
Traders, dealing in war-surplus and then carrying passengers and freight in
converted Halifax bombers. Laker made his first fortune from the Berlin airlift
of 1948. The government chartered every available aeroplane from the many small
independent airlines at generous rates. His profit, however, came from selling
spare parts to the other airlines.
When the airlift ended, Laker judged the market to be
overcrowded, and, as others went under, had his team at work smelting 6,000
engines for a saucepan manufacturer. In 1951 he returned to charter, carrying
troops for the Army in aircraft rebuilt from crashed ones
In 1953 his Channel Air Bridge began flying passengers, and
then cars, from Southend to Calais. In 1958 he sold his business, which was
merged with others to form British United Airways. He became managing director
of BUA, and it grew into the largest independent airline.
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| British United Airways |
In 1965 he resigned, forming Laker Airways to capitalise on
the booming package holiday trade. Three innovations made the airline successful:
1) Laker chartered his aircraft to tour companies
at a rate that cost them less the more they flew.
2) He saved money on fuel by telling his crews to
fly at higher altitudes than usual and by pioneering the reduced thrust
technique on take-off.
3) He also kept his fleet busy off-season, flying
winter tours to the Mediterranean and Muslims to Mecca for the Haj.
Laker enjoyed the good life. At his peak he bought a
Rolls-Royce each year and racehorses for his Epsom stud. He was once
photographed zooming around the Gatwick runway pretending to be a Spitfire and
he was voted "Man of the Year" and in 1978 knighted by the Callaghan
government.
Yet he never lost his Kentish accent and had a reputation
for frugality. Laker's management style
was to dominate. He knew each aspect of his business as well as any employee,
and, while inspiring great loyalty, knew his own mind and got his own way.
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