The airline began in 1945 as McPhillips Flying Service. In 1975 Welke Aviation was started in competition with McPhillips. The two companies merged in 1983 and Paul Welke bought out his partners in 1989. In 2001 Welke was instrumental in the location and rescue of a family that had been on a charter flight that crashed on approach to Beaver Island. In 2013, the Michigan Aeronautics Commission gave Welke an award in recognition of Island Air's long history of service.