The carrier traces its roots back to September 1964 (1964-09) when Kingdom of Libya Airlines was set up in conformity with law no.

Following the carrier starting services along the Tripoli–Benghazi run, the Libyans prevented foreign companies that also flew the route from operating there in order to allow the national airline to expand.

[6] Absorbing Libavia and United Libya Airlines operations,[7] international flights radiating from Benghazi and Tripoli began in October 1965 (1965-10), initially serving Athens, Cairo, London, Malta, Paris, Rome and Tunis.

[8] The early years saw Air France providing the company with technical assistance, KLM managing the sales and reservations, and BOAC taking care of traffic, finance and communications.

Furthermore, the government committed to cancel their debts with the company on a monthly basis, and any losses the airline would incur should be compensated by the state.

[19] The airline had 1,800 employees at April 1977 (1977-04); at this time, passenger and cargo flights radiating from Benghazi, Tripoli and Sebha to Athens, Algiers, Beirut, Cairo, Casablanca, Damascus, Jeddah, Khartoum, London, Malta, Paris, Rome, Tunis and Zürich were operated.

[25] By mid-1980, the number of employees had grown to 2,500, and Amman, Belgrade, Cotonou, Istanbul and Niamey were added to the route network;[26] later that year, Karachi was incorporated as a destination.

[28] At that time, Airbuses were equipped either with General Electric (GE) or Pratt & Whitney (P&W) powerplants, but the airline ordered Rolls-Royce engines to power them—something that had not been done before, as the former two were manufactured in the United States and there was a ban in force on providing Libya with technology that could possibly have military uses.

[31] The company had managed to buy a number of ageing US-manufactured jets, including Boeing 707s and Douglas DC-8s, since 1979; many of them were either cannibalised for spare parts or sold.

Employment at this time was 4,500; destinations served included Algiers, Amman, Amsterdam, Athens, Belgrade, Benghazi, Bucharest, Casablanca, Damascus, Frankfurt, Istanbul, Jeddah, Karachi, Kuwait, Larnaca, London, Madrid, Malta, Milan, Moscow, Paris, Rome, Sebha, Sfax, Sofia, Tripoli, Tunis, Vienna, Warsaw and Zürich, along with an extensive domestic network.

[25] During the year, Libyan Arab managed to bypass the US economic embargo against the country when the carrier acquired, through intermediary companies,[31][34] ex-British Caledonian GE-powered A310 aircraft for US$105 million.

[citation needed] Fleet and route network grew further when regional carrier Air Jamahiriya was merged into Libyan Arab Airlines in 2001.

[55][additional citation(s) needed] The airline pursues an expansion policy,[56] which is concentrated on European business and tourist customers.

Newly introduced destinations like Milan, Ankara,[57] Athens[58] and Madrid have led to a route network similar to the one offered prior to the 1992 trade embargo.

[61] In April 2012 (2012-04), Libyan Airlines was affected by a ban that was imposed by the European Union (EU) on all carriers having an operator's certificate issued in Libya from flying into the member countries.

[78] On 21 September 2010, it was announced that the two airlines, which had already begun extensive code-sharing and set up joint ground handling, maintenance and catering services, were to merge by November of that year, which was later postponed indefinitely, though.

[79][80] The proposed privatisation and merger with Afriqiyah Airways has also been postponed, despite the fact it was originally planned to be effective in November 2010.

The two carriers were later expected to merge in late 2011, however the Arab Spring and poor organisation forced this deal to be postponed many more times.

Both airlines are to merge by the first half of 2013, according to Libya's current Interim Transport Minister Yousef el-Uheshi – 12 to 13 months after negotiations are expected to resume in March 2012.