On the morning of 26 September 1977, a McDonnell Douglas DC-10 with the word Skytrain painted along its fuselage took off from London Gatwick for New York's JFK. Its passengers had not booked their seats weeks in advance. They had turned up, paid £59 for a one-way ticket and walked on.

That fare was about a third of what the established airlines charged to cross the Atlantic. The man behind it, Freddie Laker, had spent six years fighting regulators in London and Washington for the right to sell it, and he had won.

The Laker Skytrain lasted a little over four years. When Laker Airways collapsed in February 1982 it was described as Britain's largest corporate failure. Yet the idea it proved, that ordinary people would fly across an ocean if the price was right, outlived the airline and influenced the low-fare carriers that followed.

A transatlantic ticket you bought like a train fare

Skytrain was not simply a cheaper version of an ordinary airline seat. It was a different product. There were no advance reservations: passengers bought their tickets on the day of departure and boarded a scheduled flight, the walk-on, walk-off model that gave the service its railway name.

The economics depended on volume. Laker's DC-10s each carried 345 passengers, and the low fare only worked if most of those seats were filled. In return, travellers who had never been able to afford a transatlantic trip suddenly could.

The fare in the other direction was $135 from New York. In the White House statement approving the service, President Jimmy Carter gave the London to New York fare as $101.48, the dollar value of the sterling price at the time.

The Faded Kingdom's documentary on Freddie Laker tells the full story, from the £59 fare to the collapse of Laker Airways.

Six years of being told no

Laker announced Skytrain on 30 June 1971 at the Savoy Hotel in London. He was already a successful operator: he had made money supplying aircraft for the 1948 Berlin Airlift, run British United Airways and founded Laker Airways in 1966 as a charter carrier.

What followed was a regulatory marathon. Britain's Air Transport Licensing Board rejected the first application, then granted a licence on appeal in February 1972. The government revoked it within weeks, the new Civil Aviation Authority approved it again later that year, and in July 1975 the Labour government withdrew it once more.

Washington was no easier. Reason magazine, writing in 1977, reported that the Nixon administration had stalled the plan to protect American carriers, while Britain later backed away to shield the state-owned British Airways. Laker took the British government to court over the 1975 decision and won.

The aircraft were ready long before the paperwork. British Movietone filmed a Laker airliner in Skytrain markings in April 1973, more than four years before the first passenger flight.

Laker made himself the face of the fight. He presented Skytrain as a service for what he called the forgotten man, the traveller priced out of flying by the airline cartel, and he was happy to pose beside a sign that read Fly Me, I'm Freddy.

British Movietone footage from April 1973 of a Laker aircraft in Skytrain markings, years before the service was allowed to start.

Bermuda II and a presidential signature

The breakthrough came through diplomacy. Britain renounced the 1946 Bermuda air services agreement with the United States, and the replacement treaty, known as Bermuda II, followed in 1977. The British government had also come round to the view that Skytrain would bring in tourist dollars.

In June 1977 Carter approved the Civil Aeronautics Board's decision to let Laker fly Skytrain between New York and London for a one-year trial. Carter had campaigned for more competition in air travel, and his statement made clear that he saw Skytrain as a test case for something bigger.

The following year the Airline Deregulation Act opened up the American domestic market. Skytrain was not the cause, but it arrived at exactly the moment the old regulated order was cracking.

Laker himself was far from grateful. The terms of the trial, Reason reported, meant his DC-10s would fly roughly half empty in the winter months. “What an indictment of free enterprise when they tell you you have to control the people who fly,” he told the magazine.

Then the first Skytrain left Gatwick on 26 September 1977, and the public answered the argument. The service made a profit of about £2 million in its first year, and rival airlines were soon cutting their own fares to compete.

Bigger, faster and deeper in debt

Success bred ambition. Skytrain added Los Angeles in 1978 and later Miami and Tampa, and from 1979 the Civil Aviation Authority allowed Laker to sell bookable seats rather than walk-on tickets only. Laker also had grander plans for a round-the-world service that regulators never approved.

The fleet grew to match. Laker added long-range DC-10-30s and, in September 1978, ordered Airbus A300B4s, a deal covered by news agencies at the time. Much of this expansion was financed with borrowing in US dollars while most of the airline's income came in sterling.

Then the luck turned. After the American Airlines DC-10 crash at Chicago in May 1979, the type was grounded for weeks that summer, costing Laker Airways millions of pounds. The 1979 oil price shock, high interest rates and swings in the pound against the dollar added to the pressure.

The incumbents hit back on price. In October 1981 Pan Am cut some transatlantic fares by as much as two-thirds, according to accounts of the collapse, and Laker's cost advantage shrank just as his debts peaked.

Laker was still the airline's loudest salesman. Thames Television's Afternoon Plus interviewed him in 1980, as the expansion gathered pace and before the bills fell due.

Freddie Laker interviewed on Thames Television's Afternoon Plus in 1980, at the height of Skytrain's expansion.

5 February 1982

The end came quickly. In the early hours of 5 February 1982, Laker Airways went into receivership at the request of Midland Bank. Reports put its debts at between £250 million and £270 million.

Flying stopped at once and Laker's aircraft were impounded. Several of its DC-10s later joined British Caledonian, one of the airlines Laker would soon take to court.

The lawsuit that followed

Laker did not accept that his airline had simply failed. He sued 12 IATA airlines under American antitrust law, alleging that they had conspired to drive Laker Airways out of business with predatory pricing. The defendants included British Airways, British Caledonian, Pan Am, TWA, Lufthansa, Swissair and KLM.

The case was settled out of court in 1985. The airlines' payments, reported at around $50 million, went largely to Laker's creditors, and British Airways also agreed a separate settlement with Laker personally. Exact figures differ between sources, but the outcome was clear: the defendants paid rather than fight the claim in court.

The Laker Skytrain legacy

Laker was knighted in 1978 and never stopped running airlines. In the 1990s he launched a new Laker Airways from Freeport in the Bahamas, which flew until the mid-2000s. He died in Florida in February 2006, aged 83.

His most famous heir is Richard Branson, who launched Virgin Atlantic in 1984. Laker told Branson, and easyJet founder Stelios Haji-Ioannou, that if British Airways came after them they should “sue the bastards”. In 2017 Norwegian put his portrait on the tail of a Boeing 737 MAX and called him a pioneer of low-cost flying.

Laker Airways is long gone, and nobody queues on the day for a transatlantic seat any more. But every airline that sells a cheap fare across an ocean is running a version of the experiment that began at Gatwick on 26 September 1977. The Laker Skytrain did not survive. Its idea did.

Sources: Wikipedia (Laker Airways; Freddie Laker), The American Presidency Project (Jimmy Carter, Skytrain Service statement, June 1977), Reason magazine (October 1977), Flight International / FlightGlobal, Aviation Week, NBC News / Associated Press, Airways Magazine, Business Travel News, Breaking Travel News, Norwegian press release (2017), Mirrorpix / Alamy archive caption, AP Archive, British Movietone