The company was first established as a Texas-based commuter called Muse Air. On June 25, 1985, Southwest Airlines acquired Muse Air, and Muse Air continued to operate as a separate airline. In February 1986 its name changed to "TranStar." At its peak, TranStar employed some 900 people and served 14 cities, but by mid 1987 the company was still not making a profit, and operations were ceased.