Atlantic Airways (Faroese: Atlantsflog) is the airline of the Faroe Islands, operating domestic helicopter services and international passenger services as well as search and rescue operations from its base at Vágar Airport, on the Faroese island of Vágar. Most of its pilots are members of the Faroese Pilot Association. Its 2021 revenue was 410.2mm DKK.

Regular scheduled air links to the Faroes had been in operation with Icelandair from 1963, between the islands, Denmark, Scotland and Iceland. Although the airport at Vágar had been constructed by the British Army during World War II, air traffic to the islands was limited in the 1960s. In 1971, more regular services to Copenhagen began with Maersk Air. Calls for the creation of a Faroese airline company began in the early 1980s. Passenger numbers were steadily increasing, and Danish carrier Maersk Air enjoyed the monopoly as the sole airline to serve the Faroe Islands.

As a result, Atlantic Airways was established in 1987, initially between the Faroese government (51%) and Danish airline Cimber Air (49%), though the Faroese government would assume full ownership in 1989. Flights commenced between Vágar and Copenhagen on 28 March 1988 using a British Aerospace 146. A hangar was built at Vágar by the Faroese government in order to secure Atlantic Airways' home base in the Faroes, ensuring maintenance facilities were available on the islands.

The new airline company aimed to build up a Faroese aviation industry on a commercial basis and to ensure the Faroe Islands an air connection with the outside world. Flight crews and management were Faroese.

Though load factors were high and the new service was popular, Atlantic Airways had a turbulent beginning economically. The Faroe Islands suffered a severe economic depression in the early 1990s, and at its nadir in 1992, the Faroese government delivered 75 m DKK in aid to the struggling carrier. Atlantic Airways would not become profitable until 1995.

Flights were launched to Reykjavík in 1995 in co-operation with Icelandair, and also to Narsarsuaq in Greenland in the summer months, in co-operation with Icelandair. The latter half of the 1990s saw Billund in Denmark and Aberdeen in the UK added to Atlantic Airways' flight schedule. In 2004, Icelandair ceased operating its own flights to Vágar, albeit retaining its partnership with Atlantic Airways. Maersk Air also ceased flights to Vágar in 2004, leaving Atlantic Airways as the only regularly scheduled operator to the Faroe Islands.

The growing list of destinations and increasing passenger numbers, together with the stabilisation of the airline's finances, saw a second BAe 146 added to the fleet in 2000. This new aircraft meant services to London Stansted in England and the Norwegian capital Oslo added to the network. Growth in tourism on the islands has also enabled flights to Aalborg, Stavanger, Stord and Edinburgh. However, for the 2006 season, services to Stord have been discontinued, and Edinburgh replaced by the Shetland Islands. Atlantic Airways also entered the UK domestic market in 2006, becoming the only carrier to offer a direct service between Shetland and London, which it did on a twice-weekly basis. The UK domestic operation ceased in 2008.

Atlantic Airways also operates a domestic service by helicopter, in many instances a vital connection to many of the islands, which otherwise can only be reached by sea. The helicopter has proved a vital tool on the islands since the 1960s, when helicopters from Danish coast guard vessels patrolling the Faroes undertook a variety of tasks, including ferrying equipment and supplies between the islands. The government hired a helicopter in 1978 for these tasks, but in the 1980s, a commercial public helicopter service was launched linking each of the islands using two Bell 212 helicopters.