TOURISM IN RETROSPECT: 30 Years since Laker collapse ...

The news of the collapse of Spanair earlier this week comes almost on the thirtieth anniversary of another major airline failure. On 5th february 1981 ?the last flights were operated by one of Europe's earliest discount carriers, Laker Airways, as the whole of the Laker airline and tour operating business filed for bankruptcy.

Sir Freddie Laker (1922-2006) had pioneered cheaper air travel for almost two decades since he founded his own airline in 1966. He had been involved in the aviation business since World War II and the formation of own company allowed him to introduce some pioneering ideas to the airline business.

Initially Laker Airways was a charter airline focused on the rapidly growing Mediterranean package holiday business of the late 1960s. ?Laker introduced the concept of a 'time charter' method of charter contracts for tour operators that reduced the cost of each seat if aircraft were scheduled to optimum usage. By 1972 Laker Airways could claim to be the first independent British carrier to introduce the wide-bodied jet with the arrival of DC-10 aircraft.

Laker's dream was to introduce cheap flights across the Atlantic. His efforts were thwarted by bi-lateral arrangements of the early 1970s, but the 1977 Bermuda II agreement between the UK and the USA provided the opportunity for which he had been waiting. On 26th September 1977, the first Skytrain flight, hosted by Laker himself in his flamboyant PR style, left Gatwick for New York; the fare was ?59 one way ex UK and $135 ex USA.

The service was a huge success and popular with the public. Arguably, at this point, Laker's ambitions got the better of him. He placed orders for new aircraft to operate a planned series of 'no-frills' routes across Europe. The regulatory ethos of the time stalled such plans and Laker became burdened with increasing financial overheads.

Exchange rates also turned against him, as major expenses were dollar based, whilst major cashflow was sterling based. A worldwide problem with all DC10 aircraft in 1979 and the downturn of the early 1980s meant Laker Airways found itself unable to service the debts, despite having a sound operational business.

After days of clandestine negotiation and search for new capital, the bankers pulled their support on 5th February 1982. Laker Airways had debts of over $250 million with little significant assets to offset them. It was considered by some wiser to have an off-peak bankruptcy, rather than a major mid-summer collapse that would have stranded even larger numbers of travellers.?

It was not only the airline, Laker Airways, but the tour operating division too. This included the Lord Brothers brand and, in the north of England, Arrowsmith, though by 1982, these had been rebranded Laker Holidays and Laker Holidays (North).

After much complicated litigation across many aspects of the failure, including alleged unfair competition from large carriers such as British Airways, TWA and Pan-American, Laker re-launched himself into the airline business in the early 1990s. Based in the Bahamas, Laker Airways (Bahamas) operated mainly leisure charter flights in the North American market. Plans to relaunch transatlantic operations did not materalise. This airline closed in 2005, just months before Laker himself died

Source: http://tourismpast.blogspot.com/2012/02/30-years-since-laker-collapse.html

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Source: http://aviccbo.posterous.com/tourism-in-retrospect-30-years-since-laker-co

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