HAC's initial routes in 1998 were Chitose-Hakodate, Hakodate-Asahikawa, Hakodate-Kushiro and Asahikawa-Kushiro, followed by Chitose-Kushiro and Hakodate-Memanbetsu in 1999 and Hakodate-Sendai in 2001. It began Okadama service in 2003 with service to Hakodate and Kushiro, for a total of nine routes. HAC also served Monbetsu from Chitose and Okadama in 2005-06.Air Hokkaido ceased operations on 31 March 2006 and its sole route, Hakodate-Okushiri, was taken over the next day by Hokkaido Air System.
HAC left the Japan Airlines group at the end of fiscal year 2010 (March 2011) as part of the corporate restructuring of JAL. JAL retained a 14% stake in the airline, making it the second-largest shareholder after the Hokkaido prefectural government. Japan Airlines ceased ticket handling and reservation services for HAC flights effective September 1, 2011. The Hokkaido prefectural government and various local governments continued to subsidize HAC services to various smaller cities in the prefecture.
HAC recorded losses of 296 million yen and had negative equity of 116 million yen in the fiscal year ending March 2013, and took several measures to improve its performance, including resuming codesharing with JAL and starting service from Sapporo to Misawa in July 2013. It was revealed in August 2013 that Liberal Democratic Party lawmakers in the Hokkaido government had been pushing JAL to once again take over HAC. As of December, JAL and the Hokkaido government were reportedly in negotiations to make HAC a subsidiary of JAL, as part of which JAL and Hokkaido government would each pay off half of HAC's excess debt, with the Hokkaido government possibly doing so by cancelling part of its 360 million yen loan claim against the airline.