In 1947, a proposal to form an airline in Aden using a pair of Bristol Wayfarers did not materialize. An engineering base was established by BOAC in Asmara, Eritrea, in January 1948 as part of BOACs No.5 Line, which was centered on Aden and served Cairo, Nairobi and the Red Sea area. On 7 March 1949, Aden Airways Ltd was established as a wholly owned subsidiary of BOAC. A fleet of six BOAC Douglas DC-3 aircraft were based at Aden and these were taken over by Aden Airways. Operations commenced on 1 October 1949 with the aircraft operating under their United Kingdom (G-) registrations. On 1 February 1950, the aircraft were placed on the Aden (VR-A) register.
On 31 March 1950, share capital of Rs.800,580 (£60,043) was issued. BOAC owned all the shares. The ownership of the shares passed to Associated British Airlines (Middle East) Ltd in 1955 and B.O.A.C. Associated Companies in 1957.
Aden Airways experienced a seasonal increase in passenger numbers due to the pilgrimage to Mecca. Extra aircraft were leased to cover these flights, notably Avro Yorks from Skyways in 1954 and 1955. On 28 February 1960, Aden Airways took delivery of their first Canadair C-4 Argonaut. A May 1960 order for Avro 748s was later cancelled. From 1 January 1962, Aden Airways entered into an agreement with East African Airways Corporation to pool services on the Aden - Nairobi route. In September 1963, the first turboprop Vickers Viscounts entered service. In 1967, the political situation in Aden was deteriorating and Aden Airways therefore ceased operations on 30 June 1967.