About the time it ceased operations, it was federally certificated as a local service carrier to fly smaller routes in Arizona, New Mexico and Texas by the Civil Aeronautics Board (CAB), the now-defunct US federal agency that at the time tightly regulated almost all air transportation in the United States.

In the meantime, on March 17, 1946, Arizona Airways started intrastate service with a 21-passenger DC-3 featuring a Thunderbird livery, initially on a circular routing that included Tucson, Phoenix and five other points.

[8] In July, the CAB examiner recommended against the transaction[9] and in February 1947, the CAB Board itself voted to defer a decision on the transaction until the Board settled the general question of air service in Arizona and New Mexico, since that case was also open.

[17] The airline enjoyed near constant news coverage, hardly a week went by without at least one article in the Arizona Republic, the state's biggest newspaper, and usually several, often updating progress on the CAB cases.

In the airline's favor was it knew the territory and was backed by many of Arizona's "leading businessmen," showing the wisdom of statewide service and board representation.

Certification was subject to upgrading airports to Federal standards (radios and other infrastructure) and shoring up its balance sheet, since Arizona Airways had few assets left.

[20] Finally, in late June Monarch Air Lines said it would buy Arizona Airways.

Acquisition terms were modest: 6,000 shares of Monarch stock and assumption of $150,000 in Arizona Airways liabilities.