The airline gained its air operators certificate in 2000, and was established in October 2000, but was unable to operate until 2003 due to political unrest in Nepal. Operations started on 6 February 2003 with a single Dornier Do 228; a second aircraft was added in April 2003.
28 September 2012 - Sita Air Flight 601 a Dornier Do 228 (registration 9N-AHA) crashed just after takeoff from Kathmandu International Airport. All 16 passengers and 3 crew on board were killed. The flight was bound for Lukla, a popular destination for trekking due to its close proximity to Mount Everest. The Nepalese Government has formed an investigation committee to investigate the accident. It has been reported in media that the flight crew reported a bird strike shortly after takeoff.