The airline was established in July 2004 as a start-up airline known as Shilin Airlines.
In July 2004 it was reported that Hainan Airlines was investing 2.93 million yuan and providing three Dornier aircraft to the new company. An affiliate of Hainan Airlines, Shanxi Airlines, was investing 47.07 million yuan and providing a Boeing and a de Havilland Canada Dash 8 aircraft and Yunnan Shilin Tourism Aviation Co. would invest 1 million yuan.
On 23 December 2005, Shilin Airlines changed name to Lucky Air. It started operations with a flight between Kunming and Dali within Yunnan on 26 February 2006.
The airline is owned by Hainan Airlines, Shanxi Airlines and Yunnan Shilin Tourism Aviation. It has 263 employees (at March 2007).