In September 1972 and following nationalisation Yemen Airlines was reorganised and renamed "Yemen Airways Corporation (YAC)". At March 1975 YAC had 60 employees; the airline's fleet consisted of four DC-6Bs and four DC-3s that served domestic destinations and an international network that included Asmara, Cairo, Djibouti, Dhahran, Jeddah and Kuwait. On lease from World Airways, YAC operated a pair of Boeing 737-200 aircraft for two and a half years until the carrier ordered an aircraft of the type in mid-1976. In early 1977, a new airline was jointly established by the governments of the Yemen Arab Republic and Saudi Arabia, with both countries holding 51% and 49% of the shares, respectively, and the name "Yemen Airways" was adopted on 1 July 1978. In April 1978, a two-year contract for the provision of two Boeing 707-320Cs that included the supply of aircrews and engineering support was signed with British Midland Airways (BMA). In July 1979, the carrier signed a three-year agreement with Pan Am for the provision of technical maintenance and personal training. Two de Havilland Canada Dash 7s were ordered. The unilateral cancellation of the contract signed with BMA by Yemen Airways led the British carrier to file a claim against the Yemeni airline, which resulted in the impoundment of one of its Boeing 727-200s.