Why you should care
Because before there was Sir Richard Branson, there was Sir Freddie Laker.
In singing the virtues of the private sector and free enterprise at the Conservative Party Conference in 1981, British Prime Minister Margaret Thatcher was careful to highlight an example — a particular entrepreneur — certain to resonate with the British public. “[I]t is thanks to Freddie Laker that you can cross the Atlantic for so much less than it would have cost you in the early 1970s,” the Tories’ Iron Lady proclaimed. “Competition works.”
Freddie Laker was in many ways the original Richard Branson, a flamboyant, media-savvy English entrepreneur who set out to disrupt business as usual in the airline industry. The outspoken, sometimes vulgar Laker would take on everyone from the U.S. and U.K. governments to major airlines and the cartel-like International Air Transport Association, in an effort to open up the skies to low-cost flights and bring air travel to the masses. In fact, even as Thatcher praised Laker, her transport minister was approving the massive fare cuts by British Airways that would help reduce competition and bring the ambitious Laker, like Icarus, crashing to Earth. But oh, what a wild ride it was — and the impact is still felt today.
Laker felt there were millions more working-class customers who would take to the skies.
Like Sir Richard, Sir Freddie was a poor student but a burgeoning entrepreneur. One of his first businesses as a young man was selling seedlings to housewives out of an old Ford van. Unlike Branson, however, Laker rose from a working-class family, and his affinity for the airline industry grew out of his own deep experience within it. “Laker was a first-class aircraft engineer and had seen and done it all in terms of aviation,” Ania Grzesik, author with Gregory Dix of the forthcoming book, Icarus: The Life and Lessons of Sir Freddie Laker, tells OZY.
Laker, who had flown cargo planes during World War II, made his first foray into the airline business in 1948, buying old bombers to make runs during the Berlin Airlift. After working as an engineer, designer and manager in the industry, he decided, at age 43, to start his own airline: Laker Airways. The 6-foot-1 businessman loved nothing more than talking to strangers about their travel experiences, and in the early 1970s, an idea started to take shape for a trans-Atlantic air shuttle service that would be as easy as catching a bus.
It was a tough time to be a new airline. Pan Am had just gone bankrupt and other carriers were losing money hand over fist. But by 1972, 8.5 million Britons per year were holidaying abroad, and Laker felt there were millions more working-class customers who would too … if they could afford it. Like Uber and other disrupters today, Laker’s Skytrain service faced a daunting web of laws, regulatory authorities and industry collusion. But Laker persisted, and six years and three court cases later, Skytrain’s first flight to New York left from London’s Gatwick Airport on Sept. 26, 1977.
While other airlines like British Airways and Pan Am charged fares closer to $500, Skytrain’s no-frill services cost around $250. No reservations were needed; you could walk right up to the counter and buy a ticket. The telegenic Laker with his big grin took to the airwaves touting Skytrain’s great deals, emerging as a populist hero taking on an entrenched industry. Buoyed by an overall boost in air traffic — the number of North Atlantic passengers grew 28 percent in 1978 — Skytrain became the fourth-largest trans-Atlantic carrier.
But things slowly went south for Laker. In 1979, OPEC increased oil prices, and American Airlines Flight 191 crashed on takeoff from Chicago, temporarily grounding other DC-10s, including much of Laker’s fleet. Then, in 1981, Laker, who had expanded — and overextended — that fleet, declared war on his fellow carriers by announcing a new first-class service, an assault on their bread-and-butter. It proved the final straw for the upstart Skytrain. In response, Pan Am cut its transatlantic fares by 59 percent, British Airways and Trans World Airlines followed suit, harming themselves but effectively vanquishing Skytrain, and Laker.
Before Laker Airways, which owed hundreds of millions of pounds to banks and creditors, finally went bankrupt in February 1982, donations from the public totaling more than 3.5 million pounds poured in to support the struggling British icon. But there was no need to feel sorry for Sir Freddie: He knew the risks. “Life is too short to be bitter about taking a hiding in business,” Laker — who died in 2006 — told the BBC in 1994.
Laker’s battles would help bolster the legal and business war fought by Virgin Atlantic, helmed by Branson, against British Airways during the 1990s. Many who had worked for Laker, wound up at Virgin, say Grzesik and Dix, and Sir Freddie himself was a friend and mentor to Branson, who adopted some of Laker’s bravado in promoting his own airline. As Branson acknowledged in the 2010 book Dirty Tricks: British Airways’ Secret War Against Virgin Atlantic, “it’s much easier to follow a pioneer than to be a pioneer.”