British United Airways (BUA) was created in 1960 by the merger of Hunting-Clan and Airwork. It assumed the aircraft and operations of its predecessors, now operating out of the rapidly growing Gatwick Airport. BUA soon merged with British Aviation Services, the holding company of rival independent airlines Britavia, and Silver City Airways to form a new group, Air Holdings Limited.
Prior to the merger, Silver City Airways had been the primary independent provider of air ferry services in the UK, giving BUA a monopoly in this area. Further expansion came with the collapse of the South American Division of BOAC (the former British South American Airways), enabling BUA to build its long-haul network. In 1966 BUA was the first airline to operate all-jet domestic services.
By 1966 British & Commonwealth owned a 46 per cent controlling stake in Air Holdings. The largest shareholders were shipping companies – P&O, Blue Star Line and Furness Withy – but operations of BUA were by leading aviation figures from the former Airwork group: Sir Myles Wyatt, Alan Bristow and Freddie Laker, in addition to Anthony Cayzer (who succeeded Sir Myles Wyatt as chairman of BUA in 1968).
In the late 1960s a parliamentary committee recommended the creation of a “Second Force” private sector airline through amalgamation of the main private operators. The Edwards committee considered BUA and Caledonian the two main contenders but rejected the proposed reallocation of a substantial part of BOAC’s network to BUA.
A continuation of poor results for BUA led British & Commonwealth to consider disposal. Caledonian expressed an interest in a merger, but an approach to BOAC received preliminary approval from the government for a takeover. The sanctioning in principle of the purchase of BUA by BOAC caused something of a political storm. The Conservatives and independent airlines considered it an attempt by the Labour government to neutralise its own policy and plans for a “Second Force” alternative to state-controlled airlines.
Caledonian sought a revocation and transfer of BUA’s licences for scheduled flights. Following a debate in the House of Commons, approval of the BOAC-BUA merger was withheld. This opened the way for Caledonian to make its own bid for BUA, eventually acquiring it in November 1970 to become British Caledonian.