Australian air Express was established in early 1992 as a Domestic air freight company with the ability of pick-up and delivery services using both vans and trucks. AaE started operations on 1 August 1992. It was established as a joint venture between Australia's largest airline Qantas (50%), and government-owned postal provider Australia Post (50%) as a main competitor to the then Ansett Australia. AaE operates more than 50 nightly inter-capital freighter services. AaE use freight capacity on Qantas domestic flights and also dedicated cargo services operated on their behalf by several different companies, principally using Boeing 727 aircraft. Australian air Express began the phasing out of the 727s in September 2006 and they are being replaced by specially converted Boeing 737 aircraft that were formerly part of the Qantas fleet, operated by Qantas subsidiary Express Freighters Australia. The first Boeing 737 entered service on 24 October 2006. On 2 October 2012, Qantas announced it would acquire Australia Post's 50% interest in AaE, in return for Australia Post acquire Qantas' 50% interest in Star Track Express.
Australian Air Express was absorbed into Qantas Freight during February 2013. As a result its own website ceased to exist but some of its operations are still continuing as the air division of Star Track Express.
AaE flight operations are somewhat complex and varied. "Next Flight" services use space on the next available scheduled Qantas passenger flights. Items carried for Overnight, 2 Day Economy and Off-Peak deliveries are flown on both Qantas and Australian air Express aircraft operated by Express Freighters Australia, National Jet Systems subsidiary National Jet Express, and Pel-Air. The company does not service the Northern Territory 'overnight' from Sydney. Due to the three different service providers, AaE flights operate using different flight numbers and callsigns. The Express Freighters Australia Boeing 737s use Qantas flight numbers and callsigns as the ground handling is done by Qantas/Express Freighters, while National Jet Express uses the aircraft registration as their callsign and uses the IATA designator XM for its flight numbers (and uses the ICAO designator XME). Pel-Air flights also use XM flight numbers but have no specific callsigns. AaE also has an international Division called Australian air Express International.