Freddie Laker

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Freddie Laker
Freddie Laker

Sir Frederick Alfred Laker (6 August 1922 – 9 February 2006), was a British airline entrepreneur, best known for founding Laker Airways in 1966, which went spectacularly bust in 1982. Laker was one of the first airline owners to adopt the "no-frills" airline business model that has since proven to be very successful world-wide with companies such as easyJet, Jetblue, Ryanair, Southwest Airlines and Virgin Blue.

Contents

[edit] Biography

Laker, originally from Canterbury, Kent and an old boy of the Simon Langton Grammar School for Boys, started working in aviation with Short Brothers in Rochester. He was a member of the Air Transport Auxiliary during and immediately after World War II (1941-46).

After World War II he went into business as a war-surplus aircraft dealer. The Soviet blockade of West Berlin in 1948, during which all available aircraft were needed to fly essential supplies into West Berlin, allowed his business to flourish.

By 1954 Channel Air Bridge, his second airline venture, was flying cars and their owners in Bristol Freighters from Southend to Calais. Following the acquisition of Channel Air Bridge by Air Holdings in 1960, he became managing director of British United Airways.

Having departed British United in 1965, he formed his own airline - Laker Airways - in 1966, initially operating charter flights with a pair of turboprop planes acquired second-hand from BOAC. The livery was a mixture of black and red with a bold LAKER logo on the tailplane. He was proposing to offer a brand-new, revolutionary concept of economic air travel requiring passengers to purchase their tickets on the day of travel as well as to buy their own food. These flights were to be operated by Laker Airways and marketed under the "Skytrain" trademark.

Following the successful launch of "Skytrain" in 1977, he was knighted the following year in recognition of his services to the airline industry.

Sir Freddie Laker divided his final years living both in his waterfront home in Lucaya, Grand Bahama Island where he kept his yacht, The Lady Jacqueline, and in Florida. Sir Freddie died on February 9, 2006, at the age of 83 in a suburban Miami hospital in Hollywood, Florida following complications from cardiac surgery to implant a pacemaker. He was survived by his fourth wife, Jacqueline Harvey, a former airline hostess he married in 1985 and also by his two children: a daughter, Elaine, by his first wife Joan (with whom he also had a son who died in 1968 at age 17 after crashing a sports car Freddie had given him for his birthday [the marriage collapsed that same year]) and a son, Freddie Allen Laker (also a successful entrepreneur, born to his third wife, Patricia Gates (with whom he also had another son who died in his infancy).

[edit] Business ventures

Throughout his working life, Laker was involved in a number of aviation-related business ventures. Even when he was working for others, his decisions had far-reaching strategic consequences for the business that employed him.

[edit] Early business ventures

Laker's early post-War business ventures (prior to 1960) included:

  • Air Charter.

This was his first airline venture, which he founded early in 1947. [1] Air Charter was based at London's old Croydon Airport. [2] The airline participated in the 1948-'49 Berlin Air Lift. Its fleet consisted of war-surplus Handley Page Halifax bombers that had been converted into freighters as well as a small number of ex-RAF Avro York transporters. [3] (Following the end of the Berlin Air Lift in 1949, Laker had most of Air Charter's Halifax's scrapped using the facilities of his new Southend-based sister company Aviation Traders. Laker sold the Air Charter Yorks that were still airworthy to other Independent airlines, two of which were acquired by Dan-Air in 1956. [4])

On April 14, 1955 Air Charter inaugurated its first vehicle ferry service between Southend and Calais using a Bristol 170 Mark 32 "Super Freighter". [2]

In January 1959 Air Charter became a subsidiary of the Airwork group. [2] (Airwork merged with Hunting Clan and several other contemporary, Independent British operators to form British United Airways the following year.)

Following a rationalisation of Air Charter's flight crew and ground staff in February 1959, Laker decided to transfer all vehicle ferry services along with the Bristol 170 fleet to the newly formed Channel Air Bridge. [2]

Air Charter was eventually absorbed into the newly formed British United Airways in June 1960. [1])

  • Aviation Traders.

Following the end of the Berlin Air Lift in 1949, Laker established Aviation Traders at Southend-on-Sea, Essex, England, as an aircraft scrapping and manufacturing plant. Numerous war-surplus bombers and transporters were converted into freighters at Aviation Traders' Southend plant. This included the conversion of several DC-4/C-54 "Skymaster" airframes into "Carvairs" for various operators around the world.

In addition, Aviation Traders re-engined certain early post-War piston-engined aircraft types and it also produced an all-new aircraft design, the ATL-90 "Accountant".

Aer Lingus Carvair loading a car at Bristol Airport, Bristol, England, in 1965
Aer Lingus Carvair loading a car at Bristol Airport, Bristol, England, in 1965
  • Channel Air Bridge.

His second airline venture began flying cars and their owners across the English Channel in 1954, initially using a fleet of Bristol Freighter twin-engined, piston-powered planes. These were later supplemented and eventually superseded by the larger-capacity, four-engined "Carvairs". The "Carvair" design was based on the Douglas DC-4 piston-engined airliner. It involved raising the aircraft's cockpit "above" the fuselage in a 747-style bulge so as to create more space for vehicles and/or passengers on the main deck. It also involved replacing the DC-4's original tail fin with a newly designed, larger DC-7-style fin as well as equipping the aircraft with a Bristol Freighter-type nose-loading cargo door, more powerful brakes and a stronger undercarriage.

In 1960 Channel Air Bridge was acquired by the Air Holdings group, the holding company of British United Airways. (British United was to become Britain's largest independent airline of the 1960s.) However, Channel Air Bridge continued operating under its own identity for more than two years. [2]

On January 1, 1963 Channel Air Bridge merged with Silver City Airways, which had pioneered commercial cross-Channel vehicle ferry flights in 1948. [5] The merged entity began trading as British United Air Ferries. [5]

In the meantime, Laker had been appointed British United's managing director.

During his tenure (1960-1965) British United became the first wholly privately owned, UK independent airline to re-equip its entire fleet with brand-new, state-of-the-art jet aircraft.

In 1961 British United became the launch customer for the BAC 1-11 short haul jetliner when it placed an order for ten series 200 aircraft. Laker had personally negotiated this deal with the manufacturer. This was the first time that an Independent airline had placed an order for brand-new jets. The first of the new 1-11s entered service on April 9, 1965, inaugurating a new scheduled route from London Gatwick to Genoa. Laker also placed an order for Vickers VC-10 series 1103 long haul jets on behalf of British United. The first two aircraft were delivered towards the end of 1964. (These aircraft differed from other operators' VC-10s by having a large cargo door on the right-hand side of the forward fuselage where the aircraft's first class section was located. They also had extended wing-tips that were slightly bent downwards, increasing the aircraft's range and improving its lift at "hot-and-high" airfields. Unlike all other shorter fuselage, "standard" VC-10s, which had thrust reversers in their outer two engines only, this particular model had thrust reversers in all four of its Rolls-Royce Conway engines, thereby giving it additional braking power on shorter runways. These design changes were initiated by Laker himself and implemented at Aviation Traders.)

By the end of that decade, British United boasted an all-jet fleet, which gave it a decisive competitive edge over its contemporary Independent rivals.

Laker was furthermore instrumental in securing the transfer of the traffic rights for BOAC's chronically loss-making South American routes to Argentina, Brazil, Chile and Uruguay to British United. British United commenced service on these routes in November 1964 using its brand-new VC-10s and managed to make them profitable within five years.

In 1965 Laker decided to leave British United to set up his own airline following a major disagreement with British United's chairman Miles Wyatt.

[edit] Subsequent business ventures

Laker was involved in the following business ventures during the later post-War years of the 20th century (post-1960).

[edit] Laker Airways

Laker Airways was formed in 1966. This was Laker's third and most prominent airline venture. Laker Airways commenced commercial airline operations in March of that year with a fleet of two ex-BOAC Bristol Britannias. These were subsequently supplemented and eventually replaced with a brand-new fleet of BAC 1-11 jetliners as well as a pair of second-hand Boeing 707 jets.

Initially, Laker Airways was a charter airline. For many years it had been the most profitable as well as the best-run charter airline in Britain.

Laker Airways had pioneered many new, cost-saving as well as profit-enhancing, commercial concepts and operational techniques.

Laker Airways also became the first Independent British airline to operate widebodied equipment when it introduced its first two McDonnell Douglas DC-10-10 series aircraft into commercial airline service in November 1972, the first European operator to do so. These aircraft were the first UK-registered DC-10s.

In 1973 Laker Airways operated the world's first Advanced Booking Charter flight. By the mid-1970s it had become the undisputed, global ABC flight market leader.

Laker Airways scored another "industry first" when it introduced its first daily "Skytrain" low-fare scheduled service between London Gatwick and New York JFK International Airport on September 1, 1977.

[edit] Skytrain

On June 15, 1971 Laker Airways submitted an application to the UK's Air Transport Licensing Board (ATLB), one of the forerunners of today's Civil Aviation Authority (CAA), to launch the world's first daily transatlantic, low-fare scheduled service between London and New York, charging a then incredibly low one-way fare of £32.50 in winter and £37.50 in summer. This was two-thirds less than what the major, established "flag" carriers were charging at the time. The proposed service was to be marketed using the "Skytrain" trademark and was to be initially operated with 158-seat, single-class Boeing 707-138Bs that were acquired second-hand. "Skytrain" was to be a "walk-on", "walk-off" operation that did not require any advance reservations. Instead seats were to be sold to the travelling public at each end of the route on a "first come, first served" basis only.

The ATLB rejected Laker's application the same year itself. Laker appealed against the ATLB's refusal to grant a licence for his proposed "Skytrain" service. The appeal was successful and the ATLB eventually granted Laker the requested licence in February 1972.

However, on March 30, 1972 the UK Government revoked Laker's licence and instructed him to re-apply to the CAA, which came into being on April 1, 1972.

Laker duly re-applied to the CAA for permission to operate eleven weekly "Skytrain" services each way between London Gatwick and New York JFK during the summer and seven weekly round-trips during the winter. [6] The summer schedule was to be operated with Laker's brand-new DC-10 widebodied jet aircraft to take advantage of increased demand he anticipated for his new low-fare service during the peak months from June to September as well as of the DC-10's low break-even load factor of only 52%. [6] The winter schedule was to be operated with 707 narrowbodies as specified in Laker's original application to the ATLB. [6]

The newly formed CAA approved Laker's application on October 5, 1972. However, it specified Stansted rather than Gatwick as the service's UK departure/arrival point. [6] (The unexpected change in the UK departure/arrival point for Laker's "Skytrain" service was intended not to undermine the planned launch of BCal's daily Gatwick-JFK full-service scheduled operation for which the CAA had already granted that airline a 15-year licence - along with another 15-year licence for a daily Gatwick-Los Angeles International Airport full-service scheduled operation - during the so-called "cannon ball" hearings earlier the same year.)

The UK Government designated Laker Airways as a scheduled transatlantic UK "flag" carrier on January 11, 1973. [6]

However, under intense pressure from the established airlines, including Laker's archrival and next-door Gatwick neighbour BCal, against a backdrop of huge losses and overcapacity on the North Atlantic in the aftermath of the global energy crisis caused by the Organization of Petroleum Exporting Countries' oil embargo, the UK's Labour Government of that era decided to revoke Laker's licence on July 29, 1975.

Freddie Laker took the Government to the UK High Court, which overturned the Government's decision to revoke the airline's licence for a "Skytrain" service between London and New York.

It took another two years until Laker gained final approval - including a reciprocal permit from the relevant US authorities, which was granted on June 13, 1977 by US President Jimmy Carter [6] - to commence "Skytrain".

(In the meantime, Peter Shore, the then Secretary of State for Trade, had conducted a review of the Government's aviation policy and in 1976 announced a new "spheres of influence" policy that ended "dual designation" for British airlines on all long-haul routes. As a result of this new aviation policy BA and BCal were no longer permitted to run competing scheduled services on the same long-haul routes and the latter was forced to withdraw from the London-New York and London-Los Angeles routes, leading to the revocation of BCal's Gatwick-JFK and Gatwick-L.A. licences. The same year, Edmund Dell, the then Secretary of State for Transport, renounced the original Bermuda air services agreement of 1946 and initiated bilateral negotiations with his US counterparts on a new air services agreement, which resulted in the Bermuda II treaty of 1977.)

Laker's long-running "Skytrain" application was finally granted in 1977 upon designating the airline as the second UK flag carrier between London and New York under the then just-concluded Bermuda II UK-US air agreement. At the last minute prior to the inaugural "Skytrain" flight from London to New York Laker also received Government permission to use its Gatwick base as the service's UK departure and arrival point, rather than Stansted as originally specified in its licence.

"Skytrain" took to the air for the first time on September 1, 1977 when the service's inaugural flight departed London Gatwick for New York JFK. The inaugural service was operated by one of the airline's 345-seat McDonnell Douglas DC-10-10 widebodied aircraft. The fares charged at the time were £59 one-way from London and $99 one-way from New York.

"Skytrain" became a financial success in its first year of operation itself leading to further expansion over the coming years, in terms of both new routes as well as additional frequencies.

As a result of his clever publicity stunts to market the then brand-new London-New York "Skytrain" service, Freddie Laker himself became popular with the public ("the forgotten man's hero" [7]) and was regarded as one of Margaret Thatcher's "golden boys" of industry (along with Sir Clive Sinclair and Sir Alan Sugar). The former Conservative Prime Minister was a self-confessed "Freddie Laker fan".

However, it was James Callaghan's "pro-union" Labour Government that awarded Laker his knighthood for services to the airline industry in 1978, rather than Margaret Thatcher's subsequent "pro-business" Conservative administration.

As "Skytrain" expanded, the airline placed orders for additional McDonnell Douglas DC-10 widebodies, including the company's first order for five longer range series 30 aircraft, which were delivered from December 1979 onwards to support its growing number of destinations and frequencies.

The airline also became one of the early buyers of the first Airbus airliner, the A300, ordering ten of these widebodies in 1979 and had plans to deploy the aircraft on a new network of intra-European "Skytrain" routes in a big way.

"Skytrain" came to an end when the airline went spectacularly bankrupt on February 5, 1982.

[edit] Laker Airways' collapse and the end of Skytrain

In 1982 the company went bankrupt, owing over a quarter of a billion pounds. The airline made its last flight on February 6, 1982, the day after it went bankrupt.

There were numerous reasons for what was termed the biggest corporate failure in Britain at the time:

  • Both Britain and the US were in recession and other airlines who were blaming Laker for the losses they had incurred as a result of being forced to compete with "Skytrain" desperately wanted it to fail.
  • BCal's senior management's intense displeasure at the Government's decision to revoke its own - at the time unused - Gatwick-JFK and Gatwick-L.A. licences in order to enable Laker to substitute BCal as the designated second UK flag carrier on both of these routes under Bermuda II's strict dual designation rules undermined BCal's future expansion plans and, therefore, made it more likely that BCal would join in or lead any campaign to put Laker out of business.
  • Laker's outspoken opposition to the anti-competitive practices to which IATA member airlines resorted at the time to stifle any serious attempt to compete with them made Laker many enemies in the IATA camp who wanted to be rid of the competitive threat Laker posed to them in the long term, including many airlines that actually did not compete directly with Laker's "Skytrain".
  • Laker Airways had expanded too quickly in the late 1970s/early 1980s when it took delivery of a large fleet of brand-new DC-10 and A300 widebodies, which had been bought with funds borrowed at too high a rate of interest.
  • The company was undercapitalised and did not enjoy the financial back-up of any significant assets, which seriously undermined its ability to withstand a concerted and prolonged campaign to put it out of business at the depth of the 1981/2 recession at the hands of its financially stronger competitors.
  • Laker Airways incurred a revenue loss estimated at $13m when the world-wide DC-10 fleet was grounded as a result of having its certificate of airworthiness temporarily withdrawn in the aftermath of the American Airlines DC-10 crash at Chicago O'Hare in May 1979.
  • Some passengers may also have perceived the DC-10 as unsafe as a result of a string of fatal accidents involving the aircraft within a short timespan during the late 1970s (including the 1979 AA Chicago crash).
  • The implications of Laker Airways' strategic decision to build its business on discount travellers only.

The fallout from the company's demise descended into litigation, which delayed the privatisation of British Airways.

[edit] Laker Airways Mark II

Laker was undaunted and almost immediately attempted to re-launch the airline on the back of a strong public following (a relief fund gathered over a million pounds, helped by an endorsement from the music band The Police who had used the airline to tour America).

Laker, by now living in the Bahamas, got off the ground again in the early 1990s, moving his refounded business' base to Freeport. Laker Airways (Bahamas) flew from there until it shut down in 2005. It was Laker's fourth and final airline venture.

[edit] Laker's legacy

Laker is remembered for his famous advice to fellow airline entrepreneurs Sir Richard Branson, of Virgin Atlantic, and Stelios Haji-Ioannou, of easyJet, to "sue the bastards", a reference to the bullying tactics of British Airways in trying to force upstarts out of business. Virgin Atlantic later named one of its Boeing 747s The Spirit of Sir Freddie.

[edit] Notes

  1. ^ a b Airliner World - The Laker Airways Skytrain, Key Publishing, Avenel, NJ, USA, July 2005, p. 72
  2. ^ a b c d e Airliner World - Britain's Carferry Airlines, Key Publishing, Avenel, NJ, USA, July 2005, p. 34
  3. ^ Fly me, I'm Freddie!, Eglin, R. and Ritchie, B., Weidenfeld and Nicolson, London, 1980, pp. 14-19
  4. ^ Aviation News - UK and Irish airlines since 1945 (Part 34 [Dan-Air Services], Vol. 64, No. 12, p.954, HPC Publishing, St. Leonards on Sea, December 2002
  5. ^ a b Airliner World - Britain's Carferry Airlines, Key Publishing, Avenel, NJ, USA, July 2005, pp. 33/4
  6. ^ a b c d e f Airliner World - The Laker Airways Skytrain, Key Publishing, Avenel, NJ, USA, July 2005, p. 73
  7. ^ Fly me, I'm Freddie!, Eglin, R. and Ritchie, B., Weidenfeld and Nicolson, London, 1980, pp. 161-171

[edit] References

  • Eglin, Roger, and Ritchie, Berry (1980). Fly me, I'm Freddie. Weidenfeld and Nicolson. ISBN 0-2977-7746-7. 
  • Airliner World - Britain's Carferry Airlines, January 2004. Key Publishing.  (Airliner World online)
  • Airliner World - The Laker Airways Skytrain, July 2005. Key Publishing.  (Airliner World online)
  • Aviation News - UK and Irish airlines since 1945 (Part 34 [Dan-Air Services], Vol. 64, No. 12, December 2002. HPC Publishing.  (Aviation News online)

[edit] External links

[edit] Footnote

In the film "Rude Boy" (1980) featuring the pioneer British punk band The Clash, lead singer Joe Strummer introduces a song titled "I'm So Bored with the USA" in a live concert venue with the words "This song is made possible by Freddie Laker."

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