Air New England, Inc., was incorporated as a Massachusetts company on September 25, 1970, originally located in Barnstable, MA with directors Joseph Whitney (president), Nelson Lee and George Parmenter.

[9] Until 1974, Air New England was categorized as an air-taxi, or commuter, that part of the US airline business that was unregulated because it flew small aircraft, which at the time were defined as carrying 30 or fewer passengers with a maximum payload of 7,500lbs.

ANE's original network linked New York LaGuardia and Boston to three destinations in Massachusetts (New Bedford, Hyannis and Nantucket) and three in Maine (Portland, Augusta and Waterville).

[15] It triumphed by first concentrating on the Islands and Cape business (Martha's Vinyard, Nantucket, Hyannis), undercutting Executive (which, although larger, had a far worse cost structure),[16] largely driving them out of this area by 1972.

[17] Then, fed by profits from the Islands and Cape, ANE moved its attention to the north, again undercutting Executive.

[20] ANE's summer 1974 network linked LaGuardia and Boston to four destinations in each of Maine and Massachusetts, as well as one in New Hampshire and two in Vermont.

[21] The recommendation of the CAB's administrative law judge and its staff was to give these unprofitable New England routes to unregulated air taxi or commuter operators.

The Board's solution was to certificate ANE, giving them the routes Northeast and Mohawk had been unable to fly profitably, relieving Delta and Allegheny of the obligation.

[22] There had been US carriers certificated for international routes only (like Trans Caribbean Airways in 1957) and domestic carriers originally certificated to fly a single route only (Aspen Airways in 1967, TAG Airlines in 1969 and Wright Air Lines in 1972) but nothing like Air New England.

It was a near-certainty this would make ANE's life harder, yet it failed to immediately apply to the CAB for increased subsidy.

Established CAB practice was that subsidy changes dated from the day new rates were requested – no backdating.

It did expand outside of New England, but such routes in the 1 October 1981 timetable, just before it died, have a random nature to them – Boston-to-Albany-to Rochester-to Cleveland-to Baltimore.

"[33][34] In September 1981, Wright Air Lines signed a tentative $10 million deal to purchase ANE.

[39] On 17 June 1979, an Air New England de Havilland Twin Otter aircraft crashed while approaching Barnstable Municipal Airport in Hyannis, Massachusetts.