AS the message went out over cockpit radios, pilots silently banked their planes into a regretful U-turn. Turn back, came the instruction, return to London, Laker Airways is no more. Hundreds of eager passengers came down to earth right back where they started on February 5, 1982, when Laker Airways went bust. Sir Freddie Laker, who died on Thursday, must have felt an acute affinity with their condition.

What followed is unrivalled in British business history. Despite the fact that planes had to turn around in mid-air and that 5000 passengers were stranded abroad, the public, on hearing that Laker Airways had gone bust, started phoning the company, asking if they could donate money to keep the firm alive.

At the time, it was estimated that pounds-1 million was raised. Laker tried to resurrect his airline within weeks, but was blocked by the same powerful industry forces that he always claimed put him out of business in the first place.

Not many businessmen change all our lives. Not many men in suits have the public eager to bail them out with hard cash. Not many men invent an industry. Freddie Laker did all that, and joined the legion of mavericks who, over the years, have made the airline industry a battlefield of Davids and Goliaths.

Though the world will remember Laker for the imitators who followed him, such as easyJet's Stelios Haji-Ioannou or Ryanair's Michael O'Leary, he was in fact much more radical than them, as he gleefully pointed this out in a recent BBC interview.

"I think it's great they are still doing it and have produced low-fare operators, " said Laker. "But if you think about this low-fare operation in Europe and even the US, it's still on shorthaul journeys. There's no-one with a dedicated low-fares operation across the Atlantic."

Scotland's Zoom now does exactly that, but was launched almost 25 years after Laker's first transatlantic flight. No other airline has joined them. The world, it seems, is still catching up with Freddie Laker.

In the uncertain days and months following the second world war, there was a roaring trade in surplus military aircraft. Laker traded planes and made the most of the opportunity offered when the Berlin airlifts put a premium on planes. All available aircraft were needed to fly supplies into Berlin as the iron curtain came down across the city.

Laker made his fortune. His horse trading even stretched to the smelting down of many of the 100 planes and 6000 engines he had accumulated and the sale of the metal to a saucepan manufacturer. He used the proceeds to buy his first Rolls-Royce.

Having swept the floor in a Kent aircraft factory as a boy and served for three years as a ground engineer and transport pilot in the RAF, planes were always going to be Laker's business. By 1954, he was flying passengers and cars to Calais, and by 1960 he found himself the managing director of British United Airways after a flurry of industry consolidation.

It was only in 1966, though, that Laker made his mark, founding his own airline, a carrier whose influence over aviation 40 years later is still all-powerful.

Using second-hand airliners from British Airways's predecessor BOAC, Laker Airways made itself a charter airline serving the nascent package holiday business. But Laker was soon dissatisfied with regulations which he claimed were designed to keep prices high.

Taking on Labour and Tory governments, Laker set about revolutionising the industry. He proposed an airline that would operate like a railway: customers would turn up, buy a ticket and pay for meals and extras as they travelled.

The development was a success, attracting a new and younger market that, until then, was not used to flying. But it also attracted the ire of the International Air Transport Association, which embroiled him in a six-year court case. The civil servants standing in his way, he declared, were "bums and gangsters".

Laker's biggest battles were ahead, and he fought for seven years for the right to fly across the Atlantic. He finally won, and his first transatlantic flight left London for New York on September 26, 1977.

The fares were astonishing. A one-way ticket to New York was dollars-135 at a time when economy seats on flag-carriers cost dollars-385. Almost as revolutionary was Laker's attitude to travel.

"Laker changed things, " says John Boyle, founder of Zoom Airlines. "Airlines were elitist, they only wanted the top-end farepaying passengers; they treated leisure passengers - normal people - like cattle.

"People had to deal with myriad restrictions on a cheaper ticket, it was a very hostile environment for a customer. Laker said he wanted to fly ordinary people, make it available and affordable, and that's what he did."

History, and the courts, have vindicated Laker in his claims that the aviation world joined ranks to strangle his passengerfriendly business, but at the time the battle was too great. The six largest airlines operating US-UK routes - BA, Pan Am, TWA, Air India, Iran Air and El Al - were later found to have held secret meetings to mastermind the downfall of Laker Airways. Laker would be awarded millions of pounds in compensation.

But already battle-weary after his legal struggles, Laker had to face the biggest hurdle: all of a sudden, the airlines dropped their economy fares by up to 66-per cent, right down to Laker's prices. That is what sent customers to competitors and, combined with a high interest rate and a falling pound, spelled the end for Laker Airways.

Richard Branson has cause to remember Laker fondly. "He was a larger-than-life figure, with a wicked sense of humour and a great friend, " says Branson. "Perhaps his best advice was to make sure that I took BA to court before they bankrupted us - not after, as he did. "Sue the bastards!" were his exact words."

It was Branson, more than anyone, who reaped the benefit of Laker's innovation. Seeing the massive potential, Branson started Virgin Atlantic and faced an airline industry that was not quite as hostile as it had been to the ground-breaking Laker.

"There would not have been a Virgin if there had not been a Laker, " says Boyle. "Having battered the hell out of Laker, British Airways, I think, just invited Branson and Virgin into their club."

Branson's was never a no-frills airline, but, and it benefited from Laker's breaking of the hold that flag carriers had over the transatlantic routes. A more important disciple company, though, had long ago started operating out of Texas.

In 1971, five years after Laker invented the model, Herb Kelleher started flying no-frills services all over the US from a base in Dallas. Kelleher cut out free meals, assigned seating and made sure he operated with as few aircraft as possible. This neatly matched the Laker philosophy.

LAKER told the BBC in 2002: "None of [the flag carriers] seemed to have the idea that perhaps they had too many aeroplanes, perhaps they were spending too much money on aeroplanes and not enough getting the aeroplanes in the air for the right number of hours."

Keeping planes in the air became a mantra for Southwest.

It was Southwest's success which inspired Stelios Haji-Ioannou to found easyJet and Michael O'Leary to turn Irish regional operator Ryanair into a no-frills carrier. As barriers to cross-border flying fell away in 1987, 1993 and 1997, budget airlines proliferated.

Haji-Ioannou acknowledges the debt. "He was a true pioneer who inspired all of us in aviation to hang on in there and not be bullied by BA, " he says.

"I first became aware of his struggle when I was studying at the London School of Economics. He won a landmark case of unfair competition and his advice to me when I met him in the late 1990s was to sue BA. He used a more colourful word."

The Laker touch was everywhere, and by the late 1990s the flag carriers were in serious trouble. Slow to lower prices, slow to embrace direct telephone and internet booking, slow to change labour practices and cut away traditions, they struggled to compete. When Haji-Ioannou started easyJet everything - planes, people, phone operators - was contracted in: he was not even running an airline in any traditional sense of the word. Yet he, and Ryanair and later Zoom, had the likes of the mighty BA on the ropes.

Flag carriers responded by setting up their own no-frills subsidiaries, a strategy which proved an expensive failure. BA's Go was eventually sold to easyJet, while KLM's Buzz was sold to Ryanair.

The worldwide slump in travel that followed the September 11, 2001, terrorist attacks in the US hit the Atlantic-exposed flag carriers harder than most.

Through all this Laker-aping turbulence, still nobody proposed a business as radical as his original plan. It was only in 2002 that Zoom started flying from Glasgow to Canada on a no-frills basis.

Founder Boyle said that Laker's model does provide for a viable business, that his company will make "good profits" this year, but that flag carriers are as aggressive as ever. "I think airlines that cross the Atlantic try to create the illusion of cheap travel, " says Boyle. "They put their fares down when competition appears; they are good at keeping out start-ups and competition."

Laker himself returned, for a while, to his old stomping ground of Prestwick airport. By 1982, he had expanded the transatlantic flights to include Prestwick, and in the 1990s was persuaded to try again on a smaller scale with Laker Airways, a joint venture with a Texan oil man. He is still remembered fondly there.

"I was there in the mid-90s when Freddie was operating the Florida flights and they were a fantastic success, " remembers Tom Wilson, a former managing director of Prestwick Airport and now a consultant for New Zealand company Infratil. "I had the pleasure to meet him personally and he was just a super guy, very very passionate and enthusiastic about the industry."

Laker himself, by all accounts, never embittered by his ordeal, ended his days in the Bahamas indulging his love of boats.

"I had 29 airlines ganged up against me, " he said a few years ago. "You can say what you like about Margaret Thatcher, but I was her icon when she was talking about competition. 'Look at Laker Airways; competition pays', she would say. But of course as soon as the heat was put on, she got me kicked out."

As he surveyed the legions of low-cost airlines that now pepper Europe and the world from his vantage point in the Bahamas aboard his yacht the Jacqueline, named after his fourth wife, he may have regretted losing the battle with the big boys in 1982. But it is hard to dispute the fact that, in the end, Freddie Laker won the war.

LAKER'S WORDS OF WISDOM

On boats: I'm in the airline business because sailors don't make enough money to buy boats

On Branson: He's a genius. If there hadn't been a Richard to follow on from Freddie Laker, there would have been plenty more restrictions on the airlines

On boats: I kick the tyres of my aircraft and shout at them when they go wrong. But I kiss the Jacqueline

On ageing: I'm 81 years old now [in 2003], and most people think I'm about 65. I feel about 40, and I think I'm going to last as long as Bob Hope

On boats: Aeroplanes are just an aluminium tube that you can use to make money. You can't love them the way you do a boat

On money: Being broke is nothing. I was born broke, and if I was broke tomorrow, I wouldn't stay broke long

LIFE AND TIMES

1922 Laker is born in Canterbury

1948 He makes his first fortune trading planes in the aftermath of the second world war

1966 Laker Airways is founded, initially as a charter airline

1971 Southwest is founded in the US, adopting the Laker model to considerable success

1978 Flies first transatlantic flight; seats cost just dollars-135

1982 Goes suddenly into bankruptcy due to competitors' drastic dropping of prices

1984 Richard Branson's Virgin Atlantic, which was inspired by Laker's BA-busting tactics, flies its first transatlantic flight

1995 Easyjet is founded, offering no frills flights in the UK

2002 Zoom offers the first no-frills transatlantic scheduled flights from the UK since the demise of Laker Airways 20 years previously