Formation
Imperial Airways was created following the advice of the government Hambling Committee (formally known as the "C.A.T Subsidies Committee") report of 15 February 1923, that the main existing aircraft companies should be merged to create a company which would be strong enough to develop Britain's external air services and offered a £1m subsidy over ten years if they merged. Agreement was made between the President of the Air Council and the British, Foreign and Colonial Corporation on 3 December 1923 for the company, under the title of the "Imperial Air Transport Company" to acquire the existing transport services in the UK. The agreement set out the government subsidies for the new company: £137,000 in the early years diminishing to £32,000 in the tenth year as well as minimum mileages to be achieved and penalties for failure to achieve these.
Imperial Airways Limited was formed on 31 March 1924 from the British Marine Air Navigation Company Ltd (three flying boats), the Daimler Airway (five aircraft), Handley Page Transport Ltd (three aircraft) and the Instone Air Line Ltd (two aircraft). The government had appointed two directors Hambling himself (who was also President of the Institute of Bankers) and Major J. W. Hills a former Financial Secretary to the Treasury.
The land operations were based at Croydon Airport to the south of London. IAL immediately discontinued its predecessors' service to points north of London, the airline not being interested in serving what they regarded as the 'provinces'. Thereafter only IAL aircraft operating ad hoc charter flights deigned to fly 'North of Watford'.
Industrial troubles with the pilots delayed the operation of services until 26 April 1924, when a daily London-Paris service was opened with a DH34. Thereafter began the task of expanding the routes between England and the Continent, Southampton-Guernsey on 1 May 1924, London-Brussels-Cologne on 3 May, London-Amsterdam 2 June 1924, and a summer service from London-Paris-Basle-Zürich on 17 June 1924. The first new airliner commissioned by Imperial Airways, was the Handley Page W8F City of Washington on the 3rd November 1924.
In the first year of operation the company carried 11,395 passengers and 212,380 letters. In April 1925, The Lost World (a recent blockbuster film) was shown to the passengers on the London-Paris route. This was the first time that a film had been screened for passengers on a plane.
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