Air UK was formed on the 1st of January 1980 when Air Anglia, Air Wales, Air Westward and British Island Airways merged to form a united company. It grew to become one of the most important regional operators, carrying over a million passengers a year.

British Air Transport held the majority of the shares in Air UK, but in 1987 KLM obtained a shareholding of 14%. Air UK subsequently began operating routes to Amsterdam, which became a large part of the business - connecting to KLM flights in Amsterdam.

Charter operations where started in 1980, but this ceased soon afterwards. As the company grew, so did the fleet, going from old Fokker F27's, Shorts 360's and other older turboprops to newer Fokker 50's, Fokker 100's, and Bae 146's.

In 1987, Air UK Leisure was set up, and was run as an independent company and in 1996 was sold off to Unijet - the airline part of Unijet was later to become part of Thomas Cook Airlines and JMC.

KLM then increased the share of Air UK to 45% in 1992 and then, in 1997 KLM took full ownership. In 1998 the name changed to KLM UK and the colourscheme was changed, closely matching KLM's corporate livery. Within months, the entire company had dissapeared and was absorbed into the KLM Group. KLM UK lasted until 2003. KLM Cityhopper, the charter part of the airline was then set up, using the Fokker aircraft originally used by Air UK.

Air UK was completely dissolved as a company after the merger and all traces of the company dissapeared, although there is an example of an Air UK aircraft at the Duxford Museum in England.

The Air UK brand stood for reliability, great service, value for money and choice. In 2005, plans were drawn up to revive the AirUK brand and there are hopes that the new Air UK will be up and running by 2008 using two RJ100 aircraft. Plans to use new Bombardier C series aircraft from 2010 will be looked at pending the success of the new Air UK.