The British Government Code and Cypher School (GC&CS) based at Bletchley Park housed a small industry of code-breakers and traffic analysts.

By June 1941, the German Enigma machine Home Waters (Heimish) settings, used by surface ships and U-boats, could quickly be read.

In 1941, B-Dienst read signals from the Commander in Chief Western Approaches informing convoys of areas patrolled by U-boats, enabling the submarines to move into these "safe" zones.

[3] To assist the Axis land forces in North Africa and to guard against British landings at Algiers and Oran Oberkommando der Marine (OKM, Grand Admiral Erich Raeder) ordered that along with six U-boats sent to the Mediterranean in September, U-boat attacks were to be made on British convoys to Egypt via Gibraltar.

Karl Dönitz, Befehlshaber der U-Boote (BdU, Commander of the U-boats) opposed these orders because the Gibraltar to Britain convoys and their reciprocals were a sideshow compared to the North Atlantic and because most British supplies went around Africa rather than through the Mediterranean.

[4] For three weeks, no OG and SL convoys were found and wolfpacks Bosemüller with seven U-boats and Kurfürst with eight submarines failed to sink any ships.

Seewolf was disbanded and then northbound ships of Convoy HG 73 were spotted by an Italian submarine west of Gibraltar.

Searching 600 nmi (1,100 km; 690 mi) west of the English Channel, observers on U-124 saw smoke on the horizon on 20 September.

F4F Wildcats (Martlets in British service) from Audacity attacked the Condors and shot one down; one Martlet strafed U-124 or U-201, forcing it to dive but another Condor seriously damaged the rescue ship Walmer Castle (906 GRT) that had stopped to rescue survivors from Baltallin and Empire Moat and had not caught up with the convoy and was sunk by Marigold.

The convoy commodore was Rear-Admiral Kenelm Creighton in the cargo liner Avoceta and the convoy was protected by a Western Approaches Command escort group consisting of the sloop HMS Fowey and eight corvettes, reinforced by the auxiliary cruiser and CAM ship (catapult aircraft merchant ship) HMS Springbank.

The convoy sailed from Gibraltar on 17 September 1941 and German agents across the bay in neutral Spain reported its composition, escort strength and departure time.

Condors from Kampfgeschwader 40 (KG 40) from Bordeaux and the Italian submarines Leonardo da Vinci, Alessandro Malaspina, Morosini and Luigi Torelli on patrol west of Gibraltar were ordered to search for the convoy, while three U-boats further north were deployed in a search patrol line across the convoy's probable route.

Shaw returned after half an hour to report that the Condor was too fast; he could parachute into the water or attempt the flight to Gibraltar and chose the latter, landing safely.

On 25 September U-124 made contact in heavy seas and fired on a ship identified as a cruiser; this may have been Springbank but no hits were achieved, Empire Stream was sunk and the survivors rescued by Brgonia, six mambers of the crew and two stowaways being lost.

A few hours later U-124 sank Cortes and Petrel, Lapwing stopped to pick up survivors from these two ships but was torpedoed just before dawn.