[4] Although the airport at Vágar had been constructed by the British Army during World War II, air traffic to the islands was limited in the 1960s.

Passenger numbers were steadily increasing and Danish carrier Maersk Air enjoyed the monopoly as the sole airline to serve the Faroe Islands.

A hangar was built at Vágar by the Faroese government in order to secure Atlantic Airways' home base in the Faroes, ensuring maintenance facilities were available on the islands.

The aim of the new airline company was to build up a Faroese aviation industry on a commercial basis and to ensure the Faroe Islands an air connection with the outside world.

The Faroe Islands suffered a severe economic depression in the early 1990s, and at its nadir in 1992, the Faroese government delivered 75 m DKK in aid to the struggling carrier.

[5] Maersk Air also ceased flights to Vágar in 2004, leaving Atlantic Airways as the only regularly scheduled operator to the Faroe Islands.

[6] The growing list of destinations and increasing passenger numbers, together with the stabilisation of the airline's finances, saw a second BAe 146 added to the fleet in 2000.

Atlantic Airways also entered the UK domestic market in 2006, becoming the only carrier to offer a direct service between Shetland and London, which it did on a twice weekly basis.

Atlantic Airways also operates a domestic service by helicopter, in many instances a vital connection to many of the islands, which otherwise can only be reached by sea.

[15] As of November 2024[update], Atlantic Airways serves the following scheduled destinations:[16] Atlantic Airways also operates charters for Danish tour operators to destinations such as Italy, Portugal (Porto Santo), Croatia, Greece, Bulgaria, France, Scotland, Norway and the Czech Republic, out of Copenhagen Kastrup and Billund airports.

[23] As of July 2023[update], with the addition of an A320-214 previously operated by Air France and delivered June 3, 2023,[24] the Atlantic Airways fleet consists of the following aircraft:[25] The AgustaWestland AW139 is the only primary helicopter used for flights to district villages.