Having forced the world's major airlines to lower some of their fares to compete with him, Sir Freddie Laker now wants to raise some of his fares to compete with them.
This anomaly stems from Laker's pending application with the British government to remove all restrictions from his operating license so that he can offer an expanded number of services and fares on his flights to the United States.
The creator of the low-cost, no-frills, no-reservation Skytrain air service to New York and Los Angeles, Laker complained this week to the Civil Aviation Authority that he needs to offer a greater range of services to compete effectively against his three largest competitors.
Laker contends the big three - Trans World Airlines, Pan American World Airways and British Airways - have lowered some of their fares below their cost in a predatory way to skim traffic away from him, while his restrictive license leaves him powerless to fight back. Now he wants to attract some of their customers by undercutting their economy fares with cheaper reserved seats.
If the larger airlines are successful in trying to "kill off" his Kytrain service, Laker charged, they will be free to raise their fares again. "We are here to stop them from cutting my throat and putting an end to low-fare transatlantic services," he said.
Approval by the British government of Laker's application would put Laker Airways on the same procedural basis as other airlines serving the United Kingdom, allowing Laker to alter services as easily as do other airlines. The license he now holds limits his scheduled operations solely to the one-class Skytrain service.
While other airlines with unrestricted licenses are able to alter their fares and services by fling tariff amendments for approval with the aviation authority here, Laker is required to go through an elaborate hearing procedure - like the one he is now engaged in - to get a variation in his operating license.
If he is successful, he plans to offer the public several options on both the New York and Los Angeles routes:
Skytrain standard service, a continuation of the current same-day reservation service, would be the cheapest of the Laker tickets available: $229 round trip in the summer and $279 off-season for New York-London.
Skytrain excursion service would allow bookings 21 days in advance with a seven-day minimum stay requirement but not maximum. Reservations could be changed only upon payment of a $50 fee. This fare from New York would range from $329 to $319 round trip, depending on the season.
Skytrain "reservaseat" service is the least attractive part of the package from the other airlines' point of view. It would allow travelers to reserve a seat just as they do not other airlines, but at $599 roundtrip from New York during the peak season and $499 off peak, between 20 and 25 percent lower than the coach fares of the big three. A change in reservations would cost a free again.
The proposed services are all based on the "unconventional" Skytrain service Laker pioneered, he points out, since each provides only point-to-point transporation - no interlining of baggage, no joint fares with other airlines, no stopovers, no-in-flight meals or other services. His fares would allow the customer to pay only for what he or she wants.
For instance, because it costs the airline more to make a reservation for a traveler than not to - with computers and additional personnel required - the person who wants a reservation should pay more for it, Laker thinks, and people who don't want them shouldn't have the costs associated with them.
Laker's current Skytrain service from New York - interrupted this week because of the grounding of the DC-10s he files on the route - is by no means a failure.
Last year, it carried more than 240,000 on the route for a 14 percent share of the New York-London scheduled market. The passengers carried on the route boosted the proportion of travelers carried on British airlines to more than 50 percent - one of the goals the British were seeking when they denounced the Bermuda agreement with the United States several years ago.
And Laker is making money on the New York route although he says he is losing "a lot" on the Los Angeles route, which has yet to catch on since its September 1978 beginning. But on the New York route, Laker is not making the kind of money he likes to make. At current fares, he needs to fill 88 percent of his seats, he said in an interview, to make a proper return on his investment. What is proper?"Eighteen to 20 percent."
If Laker's application is not approved, he threatened to sue Pan Am and TWA in the United States charging predatory practices. But Laker noted that antitrust cases in the U.S. take a long time, and it could be five years or more before he got any relief. "That's the American definition of predatory: when the prey is dead," he said.
While the two major American flag carriers do not participate in the British hearings, both TWA and Pan Am spokesmen reject Laker's charges. "We have analyzed our various fare levels and we think the budget and standby fares we offer, and which the various governments have approved, are appropriate for Pam Am," said Martin R. Shugrue Jr., regional managing director of Pan Am for the UK and Western Europe. "Our intent is certainly not to drive Mr. Laker out of business. We think there is enough market to go around." CAPTION: Picture, FREDDIE LAKER . . . sees competitors skimming