At the time of its startup, Panama had been ruled by a military dictatorship government since 1968, but together with Aeroperlas, the company became one of the biggest and most prominent airlines in the country.

On 20 December 1989, in the wake of the United States invasion of Panama, two Britten-Norman Islander aircraft owned by PARSA were damaged beyond repair in fighting action.

On New Year's Eve 1997, PARSA suffered its first fatal accident when a Britten-Norman Islander crashed into the jungle 6.5 kilometres short of Rio Sidra Airport, Darien, killing all on board.

Shortly afterward, the airline introduced new scheduled services to other regional destinations around Panama and began to acquire turboprop aircraft such as the Saab 340 and the Bombardier Dash 8-300 series, replacing the aging British Aerospace Jetstream 31 and Fokker F27 Friendship fleet.

[7] In November 2012, Air Panama launched an updated version of its website (www.airpanama.com), with a new operational system that allowed travelers to purchase tickets in real time, and to see flight schedules and status.

Between August and November of the same year, the airline acquired two Boeing 737-300s as part of a strategic expansion plan into the international market, which started with the launch of scheduled commercial services to Medellín, Colombia, in June 2014.