The airline was established in 1968 as Sahakol Air operating air taxi services under contract from OICC, an American construction company, USOM and a number of other organisations engaged in oil and natural gas exploration in the Gulf of Thailand. It began scheduled services in 1986 and changed its name to Bangkok Airways in 1989. The airline is owned by Dr Prasert Prasarttong-Osoth (77.04%), Sahakol Estate (11.72%), Narumol Jainaknan (7.67%), Bangkok Dusit Medical Services (3.28%) and other shareholders (0.29%).

It also wholly owns subsidiary airline Siem Reap Airways, which has domestic operations in Cambodia between Phnom Penh and Siem Reap. It built its own airport on Ko Samui, which was opened in April 1989 and offers direct flights between the island and Phuket, Hong Kong and Singapore. The airline opened its second airport at Sukhothai in 1996.

A third airport was built in Trat Province, opening in March 2003 to serve the burgeoning tourism destination of Ko Chang. The airline made its first foray into jet aircraft in 2000, when it started adding Boeing 717s to its fleet. Up until then, Bangkok Airways had flown prop-driven aircraft, primarily the ATR-72. It had also operated the De Havilland Canada Dash 8, the Shorts 330 and for a short time, a Fokker 100. The carrier added another jet, the Airbus A320, to its fleet in 2004.

Bangkok Airways plans to order widebody aircraft as part of its ambition to expand its fleet. It wants to add its first widebody jets in 2006 to serve longer-haul destinations such as London, India and Japan and is looking at Airbus A330, Airbus A340 and Boeing 767 aircraft. In December 2005, Bangkok Airways announced it had decided to negotiate an order for six Airbus A350-800 aircraft in a 258-seat configuration, to be delivered commencing in 2012.