RAK Airways was founded in 2006 and launched operations in early 2007. The carrier was hard hit during the financial crisis of 2007-2010 and ceased operations in 2009.
In 2010 the airline announced that it would be resuming operations with a "value-for-money" business model, aiming to position itself between full-service and low-cost carriers. RAK Airways is the first Middle Eastern airline to actively use social media, engaging with its passengers via Twitter and Facebook.
In February 2011, it was revealed that RAK Airways was planning on launching flights to between five and nine new destinations. Though it acknowledged the difficulty of securing slots at several of the destinations due to rival carriers in the UAE, it announced that it was finalizing a codeshare agreement with an Asian carrier and that it would also be increasing the size of its fleet.
In August 2013, RAK Airways will launch flights to Islamabad, Pakistan and Amman, Jordan.