Thread: Pincers
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Old 05-04-2005, 04:00 AM
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Yeoshua Yeoshua is offline
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Default Re: Pincers

Laker Airlines
Sir Freddy Laker - Laker pioneered low cost trans-Atlantic travel. He primarily sold American holidays to British travelers. He started out at a time when the pound was strong and the dollar weak. Business was good and he contracted to buy American aircraft at a price set in dollars. Major airlines like British Airways, Britannia and Monarch, tried to undercut Laker by running their services at a loss. Addes to that the problems for the dollar being strengthened not only was his pound revenue worth less in terms of dollars so more pounds had to be devoted to paying for the new planes but the weaker pound resulted in less travel. Laker had fewer pounds but a bigger bill for the planes. The result was bankruptcy.

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