Formerly a wholly owned subsidiary of Northwest Airlines and later Delta Air Lines, in July 2010, the company was sold to Trans States Holdings.

Compass ceased operations on April 5, 2020, citing reduced travel demand stemming from the COVID-19 pandemic, along with their ownership's failed attempts to secure additional flying.

In order to adapt to the agreement, and fulfill a need to serve the regional markets with smaller, more efficient aircraft and a dramatically reduced wage labor force, Northwest bought the operating certificate of bankrupt Independence Air on March 10, 2006, for $2 million.

On September 28, 2006, Compass Airlines officially received approval from the United States Department of Transportation to begin operations.

On April 5, 2007, Compass Airlines received FAA certification to begin commercial passenger operations with a single CRJ200 (N601XJ).

On July 1, 2010, Delta Air Lines announced that it sold Compass Airlines to Trans States Holdings for US$20.5 million.

The flight attendants negotiated and approved a five-year contract with the company on May 1, 2013, following a failed vote on a tentative agreement in late 2011.

The new contract gave employees pay increases, a larger 401(k) match, a signing bonus, and other working condition improvements.

Unique to the North American market, these E175s were certified with a MGTOW of 89,000 lbs, as was allowed by the Northwest Airlines pilot scope clause, at the time of purchase.