On March 1, 1965, Peninsula Airways became incorporated and purchased the fixed base operation (FBO) in King Salmon.
Charter service was also extended into the Aleutian Islands, Dutch Harbor, Atka and Adak with Grumman G-44 Widgeon amphibious aircraft.
This required setting up an operating base at Cold Bay, with hangars, offices and employee housing.
Included in the deal was a hangar and office facility with approximately six aircraft and scheduled year-round service to all points on the Island.
At the same time, a contract was awarded to Peninsula Airways by Alaska Regional Hospital to provide 24-hour medevac service.
In 1991, Peninsula Airways began doing business as PenAir and became a code sharing and Mileage Plan partner with Alaska Airlines.
PenAir was the first regional airline in the United States to make the 10-19 seat required conversion, including a dispatch department.
[2] In 2007 the airline revealed its plan, for a 25-year plan for Unalaska's airport planned by Alaska Department of Transportation, to consider the introduction of Bombardier Q400 by year 2016 to replace the Saab 340B for Unalaska,[3] and it had even looked into using Saab 2000 but this aircraft type isn't used anywhere else in the United States at that moment meaning that the airline would have had to undertake the costly process of getting the aircraft certified with the FAA;[3] while in 2015 PenAir's president mentioned the leasing of Saab 2000 for the Unalaska-to-Anchorage route,[4] and adding that larger planes like the Bombardier Q400 wouldn't have been economical on the route.
[4] Meanwhile, the airline expanded its operations outside of Alaska in 2012 after bidding on and being awarded Essential Air Service routes in the Northeastern United States.
From Denver, PenAir operated service to Dodge City and Liberal, Kansas and Kearney, North Platte, and Scottsbluff, Nebraska.
[8][9] On August 30, 2017, PenAir announced it would cease all Denver operations effective after September 10, 2017 due to a mass resignation involving 17 crew members.
All Alaska Airlines code sharing flights in the lower 48 states in the U.S. were operated by PenAir with the Saab 340B.