At 05.08 hours on 17 Jan 1941, U-96 was chasing an unknown steamer that already evaded three G7e torpedoes when the unescorted Almeda Star (Master Harry Cecil Howard, Commodore of the Blue Star Line) was spotted about 35 miles northeast of Rockall. The U-boat then fired a fourth G7e torpedo at the first steamer at 07.10 hours, but it was also evaded and the boat forced to dive by gunfire. At 07.45 hours, U-96 fired one G7e torpedo at the Almeda Star, which stopped after a hit amidships. As the ship did not sink after being hit in the stern and amidships by two coups de grâce at 08.05 and 09.07 hours, the U-boat surfaced to shell the ship. The Germans observed four lifeboats and still saw people on deck before opening fire from 09.32 to 09.48 hours, hitting with about 15 of 28 incendiary shells. Only small fires were started which soon went out, so another torpedo was fired at 09.55 hours. The torpedo hit the forepart and caused her to sink by the bow within three minutes in 58°40N/13°38W.

Seven destroyers were ordered to search the area, but found no survivors. The master, 136 crew members, 29 gunners and 194 passengers were lost. Among the passengers were 21 officers and 121 ratings of the FAA (749, 750 & 752 FAA-Sqdn) en route to RNAS Piarco, Trinidad.