In June 1987 Air UK announced that it would start a new charter airline based at London Stansted Airport which would start operating in 1988 with two leased Boeing 737-200 aircraft. The company Air UK (Leisure) Limited was formed in 1987 with Air UK providing 30% of the £2.5 million capital, B&C Holding (the parent company of Air UK) 30% with the rest from the travel group Viking International.
The airline started operations in 1988 with two leased Boeing 737-200 aircraft and placed orders for four new Boeing 737-400s from a leasing company for delivery in October 1988. The first flight was from London Stansted Airport to Faro Airport in Portugal. The airline became the first operator of the Boeing 737-400 in Europe when the first aircraft was delivered on 14 October 1988.
The airline went on to operate seven Boeing 737-400s on both charter and scheduled services and to base aircraft at Manchester and Gatwick Airport as well as Stansted.
In 1993 the airline introduced two leased Boeing 767-300 aircraft on behalf of British holiday tour operator Unijet.