Caledonian Airways was a wholly private, independent British charter airline formed in April 1961. It began with a single 104-seat Douglas DC-7C leased from the Belgian flag carrier Sabena. Caledonian grew rapidly over the coming years to become the leading transatlantic "affinity group" charter operator by the end of the decade. During that period, passenger numbers grew from just 8,000 in 1961 to 800,000 in 1970. The latter represented 22.7% of all British non-scheduled passengers. It also became Britain's most consistently profitable and financially most secure independent airline of its era, never failing to make a profit in all its ten years of existence. By the end of 1970, Caledonian operated an all-jet fleet consisting of eleven aircraft and provided employment for over 1,000 workers. At that time, its principal activities included group charters between North America, Europe and the Far East using Boeing 707s, and general charter and inclusive tour (IT) activities in Europe utilising One-Elevens.

In 1970 Caledonian bought British United Airways (BUA), the largest contemporary independent airline and leading private sector scheduled carrier in the United Kingdom, and rebranded as British Caledonian.