Airspeed Limited was established to build aeroplanes in 1931 in York, England, by A. H. Tiltman and Nevil Shute Norway (the aeronautical engineer and famous writer, who used his forenames as his pen-name). The other directors were A. E. Hewitt, Lord Grimthorpe and Alan Cobham. Amy Johnson was also one of the initial subscribers for shares.
Initially producing the AS4 Ferry, a three engined, ten passenger biplane, the company went on to concentrate on transport monoplanes. In March 1933, the firm moved to Portsmouth and, in the following year, became associated with the Tyneside ship builder Swan Hunter & Wigham Richardson Limited and became Airspeed (1934) Limited in August 1934. During this period, it developed the AS8 Viceroy for an intercontinental air race.
All Airspeed aeroplanes under manufacture or development in 1936 were to use a Wolseley radial aero engine of about 250 horsepower (190 kW) which was under development by Nuffield, the Wolseley Scorpio. The project was abandoned in September 1936 after the expenditure of about two hundred thousand pounds when Lord Nuffield got the fixed price I.T.P. (Intention to Proceed) contract papers (which would have required re-orientation of their offices with an army of chartered accountants) and decided to deal only with the War Office and the Admiralty, not the Air Ministry.
According to Nevil Shute Norway it was a very advanced engine (and the price struck Shute as low; much lower than competing engines on the basis of power to weight ratio), so its loss was a major disaster for Airspeed (and Britain). But when he asked Lord Nuffield to retain the engine, Nuffield said I tell you, Norway ... I sent that I.T.P. thing back to them, and I told them they could put it where the monkey put the nuts! Shute wrote that the loss of the Wolseley engine due to the over-cautious high civil servants of the Air Ministry was a great loss to Britain. Shute said that admitting Air Ministry methods of doing business ... would be like introducing a maggot into an apple .. Better to stick to selling motor vehicles for cash to the War Office and the Admiralty who retained the normal methods of buying and selling. 
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