The need for an airport at Svea arose during the mid 1990s. Store Norske, which had until then been mining coal in Longyearbyen, was in the process of moving the bulk of its mining operations to Svea. A road between the two towns was out of the question of environmental reasons. The company proposed that Svea would be built as a dorm town, were workers would commute for the week. They would have their permanent homes and families in Longyearbyen. On 10 April 1994, Store Norske's board stated that they could not support the two main alternatives, construction of an all-new permanent dwelling town in Svea, and commuting from the mainland. Store Norske cited their commitment to keep Longyearbyen a vibrant community.
The airport was officially opened on 16 February 1995. In March 1996, Store Norske, Kings Bay and Lufttransport sign an agreement concerning intra-island transport out of Longyearbyen. This involves the introduction of Dornier Do 228 aircraft, which will operate for Store Norske to Svea and for Kings Bay to Ny-Ålesund Airport, Hamnerabben. Store Norske commences construction of the new town and mine, and mining operations start in January 1997.
The airport is located in the settlement of Sveagruva. Just like the rest of the company town, it is owned and operated by Store Norske. Svea Airport is situated at 10 meters (32 ft) above mean sea level, on the north shore of van Mijenfjorden. It consists of a gravel runway aligned 04–22 (roughtly northeast–southwest), which measures 800 by 30 meters (2,625 by 98 ft).
Svea Airport is a private airport and not open to public flights, or any non-emergency landings by any flights not chartered by Store Norske. All flights at Svea fly to Svalbard Airport, Longyear. They are operated by Lufttransport, who operate two nineteen-seat Dornier Do 228 aircraft on the service. The airline operates up to thirty flights per week. These are only available for employees of and others traveling for Store Norske. Lufttransport transports 21,000 people and 500 tonnes of freight annually on its Svalbard routes, the vast majority of which is on the Svea route.