Budget airlines are all the rage today. You can fly to Nice for less than the price of a train fare from London to Manchester. But budget airways haven’t always been a sure-fire winner. As Freddie Laker learned to his cost. In 1982 – not a million years ago – Laker Airways, the first ever “budget” airline, went bust, owing £270 million.

In the 1970s, Laker Airways’ low-fare Skytrain service from Britain to the US made air travel possible for millions of tourists, who had previously regarded it as the preserve of the rich. Skytrain offered an amazing one-way fare of £57 between London and New York.

However, although he had always made a profit, Laker was a hostage to the banks. He had an overdraft of £9 million with the Clydesdale Bank. The years 1981 to 1982 saw rising oil prices, recession and a falling pound. These factors, compounded by the fact that other airlines deliberately undercut Laker’s fares, meant the writing was on the wall for Laker Airways.

When the plug was pulled thousands of passengers were stranded around the world as Laker aircraft flying from Britain were recalled in mid-flight.

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