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History - Breaking the Mold

Sir Freddie Laker, Founder of Laker Airways

Sir Freddie Laker started his career in aviation sweeping floors at the Short Brothers aircraft factory. By the time he finished his working life he had brushed away the cobwebs from the entire industry.

From the outset, Laker moved swiftly upwards, eventually winning a five-year stint as Managing Director of British United. However, his entrepreneurial spirit couldn’t be contained, and in 1966, he established his own airline, Laker Airways.

The carrier began life as a small charter operator but soon made its mark on the industry at large. Little escaped Laker’s attention. The airline pioneered a reduced thrust take-off for its BAC One-Eleven aircraft, which prolonged engine on-wing times and even earned praise from Rolls Royce. Fuel savings were available from a faster climb to cruising altitude and a reduced baggage allowance. This pursuit of cost efficiency eventually led the airline to order DC-10s and it became the first European carrier to operate the aircraft. For Laker Airways, it offered break-even economics with a load factor of only 52%.

However, the real innovation came in the regulatory field. When Laker Airways was set up, the transatlantic market was heavily guarded by the big carriers, and the 1946 Bermuda Agreement between the United Kingdom and the United States remained highly restrictive.

 One loophole was to offer charter flights to groups or clubs—the so-called ‘affinity group’ rules. The rules were easily circumvented with passengers joining fictitious clubs as they checked in, but they were nonetheless awkward. Flights had to be booked at least three months in advance, for example.

Laker was instrumental in fighting the authorities on both sides of the Atlantic to revise these unworkable laws. The result was the first ever Advanced Booking Charter (ABC) flight, flown by Laker Airways in 1973. This greatly simplified the charter business and ushered in the concept of cheaper fares and shorter booking periods.

But for Laker it was a small step. His vision was to establish a scheduled service along the same lines. In 1971, he had applied for a license to operate a daily flight between London Gatwick and New York JFK. Fares would be a third of the current market rate and passengers could book on the day of travel. His application was unsuccessful.

Although he won a subsequent appeal, politics made Laker’s joy shortlived as the UK Government forced him to reapply once more through the newly set up Civil Aviation Authority. Laker got a license at the third time of asking—but it was not the one he wanted. Stansted was deemed to be the appropriate arrival/departure point in the UK and winter capacity was limited, making the economics very difficult.

It was the worldwide financial situation that ended even that brief triumph. By 1975, the oil crisis had caused a severe slump on transatlantic routes, leading to overcapacity.

The UK Government revoked Laker’s license. He was undaunted by this continual blocking and took his case to the High Court.

Meanwhile, the United Kingdom and United States were finally getting to grips with the antiquated Bermuda Agreement. By the time Bermuda II came into effect in 1977, Sir Freddie had won his lawsuit. Laker Airways became a designated carrier on the Gatwick-JFK route and his branded Skytrain service started in September of that year. Low-cost international travel had arrived.

Although Laker Airways went bankrupt in 1982 following an intense fare war with better capitalized carriers, particularly Pan Am, its founder had prompted revolutionary change in the aviation industry.

The obvious transformation was the introduction of cheap transatlantic fares, but his influence spreads further than that. Laker opened the floodgates of popular travel on a global basis. Airlines could no longer fall back on minimum fares and protected markets; governments could no longer rely on old, overly complex rules. The public demanded cheap, accessible travel and Laker had devised a business model that did just that.

Laker also brought another glimpse of the future. His personal popularity heralded a new direction in branding. Laker liked to joke that he always got free taxi rides in London and New York, such was his support.

His colorful language in opposing the status quo made him instantly recognizable to many. Sir Richard Branson, founder of Virgin Atlantic, was one of many inspired by him. “I think we all have a lot to thank him for,” he said, following Laker’s death in 2006. “If it hadn’t been for Sir Freddie you wouldn’t most likely have had Virgin Atlantic. You wouldn’t have had the easyJets of this world.”

Both Virgin Atlantic and AirAsia now have aircraft named in honor of Sir Freddie Laker—a man who overthrew aviation’s ancien régime and laid the foundation for today’s travel market.

 

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