Named after its owner Vee Neal Frey, Vee Neal Airlines was established in 1979 and began initial operations from Latrobe, Pennsylvania. In May 1980, the operation was expanded to include scheduled air services between Latrobe and Pittsburgh, Pennsylvania with a Cessna 402.
Between June 1980 and 1982, Henry Fish and a John P. Leemhuis lobbied civic and business leaders in the Erie, Pennsylvania area to raise venture capital to expand Vee Neal Airlines. After receiving financing, six British Aerospace Jetstream 31 aircraft were ordered to fashion a route system that would ensure air service links on a nonstop basis to key cities. In December 1983, the airline was renamed to Jetstream International Airlines (JIA) after it took delivery of its first two Jetstream aircraft. Within a year of renaming the airline, it relocated its maintenance department and corporate headquarters from Latrobe to Erie, Pennsylvania.
In September 1985, the airline affiliated itself with Piedmont Airlines. Jetstream International Airlines was acquired by Piedmont Airlines in August 1986 and became a wholly owned subsidiary shortly thereafter. In 1987, Jetstream once again moved its corporate headquarters to Dayton, Ohio and established maintenance bases in Dayton and Hagerstown, Maryland.
Following the USAir acquisition of Piedmont in November 1987, JIA began operating as Allegheny Commuter from the USAir hub in Philadelphia. In July 1988, JIA became a wholly owned subsidiary of USAir and operated in the colors of US Air Express, later US Airways Express. In 1989, JIA began feeder service to USAir's Indianapolis hub and moved the maintenance base in Hagerstown to Indianapolis in 1990. This maintenance base was closed in May 1994 in conjunction with a further shift of flying to USAir's Pittsburgh hub.
In November 1995, USAir renamed Jetstream International Airlines to PSA Airlines in order to protect the trademark of Pacific Southwest Airlines, which was once a large carrier on the West Coast that USAir had acquired. Later in that month, PSA also moved its corporate headquarters to Vandalia, Ohio. By March 1996, all of Jetstream International Airlines' namesake Jetstream 31 aircraft had been replaced and the airline had transitioned to a fleet of Dornier 328 aircraft. In February 1997, USAir changed its name to US Airways and PSA began operating under the US Airways Express brand.
In August 2002, US Airways Group, Inc. and its subsidiary, PSA airlines, filed voluntary petitions for reorganization, under Chapter 11 of the U.S. Bankruptcy Code. PSA emerged from Chapter 11 on March 31, 2003. As a result of its emergence from Chapter 11, PSA Airlines was chosen for placement of Bombardier CRJ-200 and Bombardier CRJ-700 aircraft. In September 2004, the last Dornier 328 was retired from the PSA fleet.
In April 2004, a new crew base was opened in Philadelphia while the crew bases in Akron and Pittsburgh were later closed in November 2004. A new maintenance base was opened in Philadelphia in September 2004 and another in Charlotte, North Carolina was opened in January 2005, replacing the Pittsburgh maintenance base. In February 2005, PSA opened its Charlotte crew base.
In September 2004, US Airways Group, Inc. and its subsidiaries (including PSA) for the second time filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. US Airways and its subsidiaries emerged from Chapter 11 and the America West Airlines/US Airways merger was officially made final on September 27, 2005. The recently opened Philadelphia crew and maintenance bases also closed in September 2005.
In January 2008, US Airways flight activity at the Pittsburgh International Airport was significantly reduced due to market condition changes. US Airways mainline employees took over the US Airways Express flight operations at the airport and PSA ceased providing ground handling services at the airport.
In August 2015, PSA Airlines announced a maintenance base would be established at Cincinnati/Northern Kentucky International Airport.
In August 2016, PSA Airlines announced a new 45,000 square foot maintenance base would be opening in the later part of 2016 at the Greenville-Spartanburg International Airport (KGSP).