Sir Freddie Laker's Skytrain took on the world's airlines — and they crushed him in court

Sir Freddie Laker founded Laker Airways in 1966 as a charter airline, but his vision was the Skytrain — a no-frills, low-fare scheduled transatlantic service that would undercut the cartel of flag carriers. After a five-year regulatory battle, he won a licence in 1977 and launched on 26 September 1977 with a £32.50 one-way fare between London Gatwick and New York JFK — a fraction of what British Airways and Pan Am charged. The planes flew full from day one.

For four years Skytrain thrived, carrying over two million passengers and forcing competitors to cut their own fares. But in October 1981, Pan Am slashed its competing economy fares by up to 66%. British Airways and TWA matched within weeks. Laker, who had borrowed heavily to expand his fleet, could not survive a price war on both sides of the Atlantic. The airline was critically undercapitalised — its issued share capital was only £504,000 against debts of £270 million, and 90% of shares were held by Freddie Laker personally.

On 5 February 1982, Laker Airways ceased operations. It was the largest corporate failure in British history at the time, leaving 4,000 employees jobless and 6,000 passengers stranded. Freddie Laker sued 12 airlines — including BA, Pan Am, TWA, Lufthansa, Swissair, KLM, Air France and Sabena — for conspiracy and below-cost pricing. The defendants settled out of court for $50 million, with BA paying an additional £8 million to Laker personally. The settlements allowed Laker to pay off his debts, but the airline was gone.