Reach for the Skies Page 14

  Pan American’s three Martin M-130 seaplanes made it the dominant international airline of the Americas and the Pacific region. The clipper service was dependable and elegant, and it seemed to its passengers to magically shrink the world beneath its wings. Imagine it: traveling all the way from San Francisco to Hawaii overnight! Hollywood bestowed on Pan American its supreme accolade—a movie called China Clipper, starring Humphrey Bogart.

  Early air travel was bumpy and expensive—but at least you got a real cup!

  Clipper passengers dressed in private dressing rooms, took in the view of the Pacific from large windows while eating gourmet meals in the dining room, and drank sizable cocktails—not least to deaden the persistent drone of the M-130’s rackety engines. Failing the cocktails, there was always the bridal suite. The Clipper ’s 74 seats converted into 40 bunks for overnight travelers. (No, I can’t make the math work, either.) The flight to Manila took 60 hours of flight time—more than five days.

  At least, that was the theory. Unfortunately, the fuel load required to reach Hawaii from California—an 18-to-20-hour flight—meant that Pan Am could carry only eight passengers on that leg, which was the linchpin of the whole service. As huge an improvement as the M-130 was on every airliner that had gone before, Trippe would need a new machine if he was to truly conquer the world’s oceans.

  Early in 1936, Pan American offered a $50,000 prize to the manufacturer who could build it an airliner for its long-awaited Atlantic service.

  On May 20, 1939—12 years to the day after Charles Lindbergh crossed the Atlantic in the Spirit of St. Louis—Pan American’s first Boeing B-314 flying boat, Yankee Clipper, left New York on a transatlantic mail run. Passenger services began a few days later, on June 28, when Dixie Clipper left New York with 22 passengers on Pan Am’s southern route, via Horta and Lisbon to Marseilles.

  The Boeing 314 Clipper could carry 74 passengers and 10 crew by day, and by night accommodated 40 passengers in seven luxurious compartments, including a 14-seat dining room and a private honeymoon suite at the tail end of the plane. It was large, luxurious, and reliable—and it could fly an astonishing 3,500 miles in one go. It operated the first nonstop service across the Atlantic, between Southampton and New York. After the outbreak of war, Winston Churchill himself commandeered a Clipper and made it his personal transport. The B-314 made intercontinental air travel possible, and it did so much sooner than anyone in government could have predicted.

  As far as the signatories of the Chicago Convention were concerned, civil aviation was a genie that had to remain firmly bottled, for the safety and security of the world. Scheduled airlines were never meant to operate in a free market but were really part of the air arm of each nation-state. Commerce didn’t come into it.

  Juan Trippe’s vision for Pan Am was much more political than commercial: he dreamed of creating a vast global airline system, servicing virtually every airport everywhere without worrying too much about volume or profit. During the Second World War, his vision was very nearly realized. Pan Am became a major contract carrier for the U.S. government, ferrying planes from Brazil across Africa to the Middle East. It flew Franklin D. Roosevelt to and from the Casablanca conference in early 1943. (On the way home, the president celebrated his birthday in the flying boat’s dining room.) Pan Am was, effectively, a civilian arm of the Air Force’s global Air Transport Command.

  Eventually, though, Trippe’s vision for Pan Am proved false. Pan Am was by far the most successful expression of Chicago Convention thinking, but by the time the convention was signed, realities on the ground and in the air had changed beyond all recognition.

  For a start, commercial planes could no longer be considered military assets. Planes were no longer mere variations on one theme. They had diversified. Modern military aircraft were flying ever faster and higher, and giving way here and there to other, quite different technologies: to rockets and guided missiles and satellites. The new military planes had no commercial application at all.

  Pan Am made intercontinental air travel a reality. Next stop: the Pacific!

  Commercial airliners, meanwhile, were getting bigger and safer and more capable, and people were waking up to the possibility of mass transit. Commercial aviation became a lot bigger and a lot more international, much faster than expected. The result was a commercial disaster so profound, its effects reverberate through the industry to this day.

  When you operate a scheduled airline, you are effectively told what to do by the government: take these slots, and fly to these destinations, at this frequency. There is no room for maneuvering. Every change of destination, every change to the schedule, is a matter of international negotiation.

  When you sell tickets to the public, those tickets entitle them to a seat on the plane. If the airplane isn’t full, you still have to take off and fly the people who did buy tickets. Now, this is fair enough: of course ticket holders should be guaranteed a flight. The problem is when the same flight runs empty, over and over again, week after week.

  In most other customer-service industries, if business goes bad, you can retrench. You can mothball a wing of your hotel; you can cancel those poorly attended matinees at your cinema. As a scheduled airline, you can’t do that. You have to stick to your schedule. If you don’t, the government will take you out of the air. An airline seat is not a hotel room or a cinema seat. If a cinema seat goes empty for a night or a hotel room goes empty for a week, you won’t earn any money, but you won’t incur much of a loss, either. An airline seat, on the other hand, costs you money every time you haul it up into the air.

  Because scheduled flights are given fixed departure times, airlines can’t expect to fill every plane all year round. Hurling empty seats about the sky is expensive, and the costs have to be recouped somehow. The only solution is to raise fares. That is why, from the end of the war to the late 1970s, international flights were largely the preserve of the rich. The Chicago Convention made it possible—even necessary—for state airlines to offer identical services at high prices, all with the sanction of the International Air Transport Association (IATA).

  But there were exceptions.

  From its opening in May 1928 to its closure in August 1939, Croydon Airport—the first purpose-built international air terminal in the world—was arguably the most visited tourist spot in Britain. Crowds gathered to watch the arrival of aviators and film stars. What they could not do was fly. For ordinary people, tickets were astronomically expensive. (In today’s money, a trip in the Boeing Clipper across the Atlantic would have set you back more than £50,000, or $85,000!)

  London’s airport between the wars was in Croydon, a place of glamour and romance.

  Holiday travel underwent a true revolution only after the Second World War. Shortly before Easter 1950, and after a series of fights with the Ministry of Transport, charter flying began in Britain, operated by Vladimir Raitz—later the inventor of that iconic sun-sea-and-sex charter outfit Club 18-30.

  I should explain quickly how charter airlines work. They supply equipment and staff to whoever wants to operate a plane. Usually it’s a tour operator, but they’ll take calls from anyone. Once when American Airlines stranded Joan and me in the Virgin Islands on our way to Puerto Rico, I called a local charter company and paid $2,000 to fly to Puerto Rico. I borrowed a blackboard, divided the charter cost by the number of people stranded, and wrote down the number. We got everyone to Puerto Rico for $39 a head.

  Charter is a different way to run an airline. It’s simple, it’s fair, it doesn’t cost much, and it’s commercially stable.

  The airline establishment hated it. Everything was done that could be done to limit the growth of charter air travel and preserve the monopoly of national flag carriers. One bizarre IATA rule stated that charter passengers needed six months’ membership in an “affinity group” whose main purpose was not travel. It was a petty inconvenience; spurious organizations sprang up at every airport, and you could pick up backdated memberships when yo
u arrived for your flight. “People would make up names like the Left-Wing Club or the Right-Wheel Club or the Birmingham Rose Growers’ Association,” remembered Freddie Laker, whose company Laker Airways was repeatedly fined for carrying bogus rose growers to America!

  By 1971 it was a circus—and Freddie Laker had become the ringmaster.

  Freddie Laker’s fascination with air travel goes back to the 1930s. He was standing with his mates outside a fish-and-chip shop in Canterbury, in Kent, looking down the road to the cathedral, “and we were having our fish and chips out of the old newspaper. Standing on the corner. And damn me if the Hindenburg was coming from Germany, of course going to America, and the Handley Page 42 with a four-engine biplane was coming from Croydon to go to Paris. I mean, you couldn’t think of two more dissimilar aerial objects than these two, and they crossed right over the top of Canterbury Cathedral. And I said to my mates: ‘That’s for me. I’m going into airplanes.’” Freddie would grow up to be rich and famous and loved: the man who tilted his lance at the Chicago Convention—and almost won.

  Freddie Laker’s affordable airfares made him some powerful enemies.

  Freddie Laker’s early mentor in the airline business was Arnold Watson, the publicity manager for Castrol, later chief test pilot at the Air Transport Auxiliary. The ATA flew planes from the factory to the RAF stations, from one station to another, and from the field back to the factories for repair and servicing. ATA pilots weren’t trained for combat, but during the war they put in more hours than anyone else in the air. Of all the thousands of auxiliaries employed in the war effort, ATA pilots had real prestige.

  With Arnold Watson, Freddie made all sorts of ideas and plans about what would happen to civil aviation after the war. They were good plans, and on April Fool’s Day 1946, Laker became one of the first eight employees of Britain’s original flag carrier, British European Airways. “But I only stayed three months. It was rather boring and, you know, sort of nationalised.”

  Freddie went instead into the war-surplus business, the scrap business, even the fruit business. It took the Soviet blockade of Berlin to drive Freddie back to his first love, aviation.

  At the end of the Second World War, the remains of the Third Reich had been divided among the Allies. Portions of Germany were assigned to Britain, France, the United States, and the Soviet Union. The capital, Berlin, lay to the east, well inside the Soviet sector; and since it was the capital, it was treated separately. As a signatory to the Yalta Agreement, you received, along with your portion of Germany, a side helping of Berlin.

  In 1948, as the cold war grew ever chillier, Soviet forces blocked the Allies’ land routes to the city. The standoff was bloodless, and, short of shooting planes out of the sky, there was no way the Soviets could stop planes from flying in and out of the capital.

  The government offered to pay air carriers to break the Soviet blockade; Freddie just treated it as another job—at first. “The way we looked at it, it was: ‘Oh, well, let’s go and do this and get on with the job and we’ll earn a few pounds.’ But after a bit, you know, two or three months down the road, it became a crusade.”

  A remembrance stamp recalls the Berlin Airlift.

  Allied supply planes were buzzed and harried, but no shots were fired. The Soviets assumed that the hastily organized airlift to relieve besieged Berlin—an effort that would have to feed, clothe, and heat two and a half million Berliners—could not be sustained. They assumed it would dribble away after a few weeks, and then the Allies would concede the capital. They were proved wrong.

  It was Dunkirk all over again. The British government minister Ernest Bevin told the secretary of state for air, Arthur Henderson, to “fill the sky with our planes.” In just over a year, from August 1948, 2.3 million tons’ worth of aid was flown into the beleaguered city.

  British, Commonwealth, and U.S. planes brought Berlin 13,000 tons of food each day.

  Only a fraction of the total cargo airlifted to Berlin was carried by civilian aircraft, but this takes nothing away from the pilots and companies that took part in the operation, flying battered old warplanes that were by then, for the most part, little better than a few thousand rivets flying in close formation. Freddie’s company—a near-bankrupt business vehicle called Bond Air Services, which he’d revived with six war-surplus Halifax bombers and hangars full of spares—was a typical airlift outfit. Freddie’s Halifaxes were, in his own estimation, “absolutely useless. But having said that, it was the only thing that we had.”

  In their biography Fly Me, I’m Freddie! Roger Eglin and Barry Ritchie capture the spirit of the time: “In March 1949, Bond pilot Joseph Viatkin was taking off from Berlin’s Gatow airport after delivering a load of dehydrated potatoes. When an engine failed at 10,000 feet, he shrugged, flew on three and the engineers promptly slotted in another engine.” Six weeks later, the same plane ran into a construction trench and was promptly bulldozed out of the way to make way for the airplanes already taxiing up behind it. “Laker’s men cut the Halifax up for scrap at the side of the runway.”

  The cargo Bond’s Halifaxes could carry was extremely limited. As Freddie recalled:We carried oil drums, coal, vegetables, potatoes and things like that. I think we did something like 4,700 flights. And after the airlift I thought, well, what are we going to do now? We’ve made some money, what’s going to happen? And I came to the conclusion that most people would stay in flying airplanes, and that they’d all get very competitive, and that nine out of ten of them would go out of business. So I thought well, this is the time for me to stop. And I actually stopped flying for over a year.

  Freddie went into the scrap business full-time, turning old warplanes into aluminum ingots. He claimed he was more than happy servicing and recycling planes, and that his flying days were over. But by then the business had gotten into his blood.

  First, in 1949, he flew joyrides and charters for Billy Butlin’s new postwar holiday camps. Then, once the “nine out of ten” little air companies set up after the war were dead and gone, and seeing that the government, too, was a large and growing customer for charter air services, Freddie bit the bullet and set up an airline.

  It didn’t take him long to run up against the petty regulations restricting the development of charter air. The stupidity of the thing drove him to the breaking point: why couldn’t passengers who wanted a cheap flight simply line up for a ticket at the bloody airport, the way they already did at railway stations and bus terminals?

  Freddie turned up at Gatwick with his lawyer and a Bible and got his passengers to swear allegiance to their make-believe clubs. The authorities were unimpressed; some 30 people were removed from a flight. “I shouted and got headline treatment and vowed to fight it,” Freddie recalled. Seven years of legal battles followed.

  Throughout the 1970s, Freddie fought through every imaginable obstruction to realize his dream. On June 15, 1971, Laker Airways submitted an application to launch Skytrain, the world’s first lowfare scheduled service between London and New York. The “walk on, walk off” operation would sell tickets to whoever turned up first. The fares were incredibly low: £32.50 in winter, £37.50 in summer—a third of what it would cost you to fly with a flag carrier. His opponents tried to force Skytrain to use Stansted Airport rather than Gatwick, and even tried to limit the number of seats he could sell each day to 189, though his DC-10s had room for 345!

  “I fought, kicked, shouted at them day after day,” Freddie recalled. When he won through the British courts the right to fly across the Atlantic, he had to fight the same battles all over again in the courts of the United States where Pan Am and TWA did everything possible to keep him out. Nevertheless, in June 1977, President Jimmy Carter finally gave Skytrain the green light.

  “I fought, kicked, shouted at them day after day.”

  Freddie Laker

  Skytrain was a huge financial success from the start—but, as Freddie once said, to become a millionaire in the airline business, it helps to start out as
a billionaire. On February 4, 1982, the operation went suddenly and spectacularly bankrupt, owing more than a quarter of a billion pounds. I think it was in 1988 that Freddie Laker first explained to me exactly how it happened.

  The scheduled airline industry favors big airlines over small ones. Suppose a big airline slashes its fares and operates at a loss, taking customers away from the little guy. By cutting its fares, the big airline fills its seats, so it’s getting at least some return per seat. And it can always recoup money from its other routes and from the profits it will make once it has killed its competition. The little airline, meanwhile, has to lug empty seats into the air. (That’s the deal you have to sign, if you want to fly a scheduled service.) In doing so, it incurs spiraling costs.

  Big airlines have been putting small competitors out of business this way for decades. When BA created the budget carrier Go, it essentially copied easyJet’s business plan. Sir Stelios Haji-Ioannou, easyJet’s founder, protested: “Go,” he said, “has been given permission by BA to lose £29 million and then close in three years having put its rivals out of business.” (Lucky for Stelios, it didn’t work, and Go was eventually sold to easyJet!)

  Squeezing a competitor is ugly. When a big airline cuts prices on all the routes a small competitor flies and makes up its losses by increasing fares on its other routes, it is, in my opinion, behaving unethically. Often enough, the game gets dirtier still, and flag carriers of several nations gang up to share the burden of squeezing a competitor out of business. This is what happened to Freddie.