Swiss was formed after the 2002 bankruptcy of Swissair*, Switzerland's former flag carrier. But it was Crossair* who benefited, (Switzerland’s second major airline) which had a 40% of its income come from the defunct Swissair. Crossair later changed its name to Swiss International Air Lines, and the new national airline started its operations officially on 31 March 2002. First called Swiss Air Lines, the company was based on the former Crossair, and was basically a merger of Crossair and former Swissair employees, routes and aircraft. The Company Swissair continued to exist (in liquidation), but had no further assets. Due to legal problems with Swissair, the name had to be changed to Swiss International Air Lines.

Swiss took over 26 long-haul and 26 medium haul Aircraft from the defunct Swissair fleet and refurbished the liveries and interiors to turn it into the new Swiss fleet, together with the former Crossair Fleet consisting of Embraer 145, Saab 2000, MD-80 Series and Avro RJ. The remainder of the Swissair aircraft that were grounded and were not taken by Swiss were returned to their lessors.

Swiss retains the rights to the "Swissair" name, whose value was estimated at more than 10 million Swiss francs in 2010. In order to prevent the trademark from becoming void through disuse, Swiss licensed it to Hopscotch Air, which operates a fleet of Cirrus SR22 planes in the United States, for use from 2010 to 2013. In Switzerland, the trademark is protected through its use by an aviation sports club.

*To read more about Swiss predecessors, Swissair and Crossair, click on the below logos to read more.

The airline annually halved its losses, and in 2006 recorded a net profit of $220 million. On 22 March 2005 Lufthansa Group confirmed its plan to take over Swiss, starting with a minority stake (11%) of a new company set up to hold Swiss shares called Air Trust. The Swiss operations were gradually integrated with Lufthansa's from late 2005, and the takeover was completed on 1 July 2007. Swiss joined Star Alliance and became a member of Lufthansa's Miles and More frequent flyer program on 1 April 2006.
In 2008 Swiss International Air Lines acquired Edelweiss Air and Servair. In 2007 Swiss placed an order for 9 Airbus A330-300s to eventually replace the existing A330-200s. The remaining 4 A330-300 aircraft joined the fleet in 2011.

Following Lufthansa Group takeover, the regional fleet was changed from Crossair's Embraer ERJs and Saabs to Avro RJs, to a wholly owned  subsidiary, Swiss Global Air Lines.

On 22 September 2010, Lufthansa announced an order for 48 new aircraft, several of them for Swiss. In March 2013, Swiss ordered six Boeing 777-300ERs. The Boeing aircraft will replace most of Swiss' current A340 aircraft, the remaining five A340s will be refurbished.

In 2014, Swiss announced it would refurbish its A320 fleet, with new interiors and the older A320s and A321s will be replaced by A320/A321neos. The A319s, along with Swiss Global Air Lines' Avro fleet, will be replaced by Bombardier CS300 aircraft. The last remaining Avro RJ100 aircraft, completed its last flight, on 15 August 2017. 

Swiss was the launch customer of the entire CSeries family of aircraft, with its first CSeries aircraft, a CS100, (now the A220) delivered to the airline in June 2016.