The company was first established as a Texas-based commuter called Muse Air, but much like Southwest Airlines, only flying larger mainline equipment. Muse Air's name originates from its founder and the one time president of Southwest Airlines, Marion Lamar Muse. It began service between Dallas and Houston in 1981 with two Douglas DC-9 aircraft. An air traffic controller's strike almost immediately
made things difficult for the company, and Muse stepped down as CEO to let his son Michael take over the company. By the end of 1984 the company was still struggling, and actively looking for a merger to keep it afloat. At the end of the year, Harold Simmons, president of the Amalgamated Sugar Company offered the airline the money to continue, on the condition that Michael Muse resign, and that his father return as CEO. Despite the new influx of cash and Lamar Muse in charge again, the company was not able to generate a consistent profit despite its use of non-union labor and competitive fares. Muse Air prohibited smoking on their flights long before the United States implemented Federal restrictions. In 1985, Southwest Airlines bought out Muse Air, making it a subsidiary company, and renaming it to TranStar Airlines. Lamar Muse was removed from having any active role in management, and the company was restructured. With the addition of MD-80 aircraft, its routes changed to scheduled service flights from California through Texas to Florida, and they were restricted from carrying mail, air freight, and any interline passengers traveling partly on other airlines. Among other changes were a new corporate image, replacing Muse Air's beige aircraft livery and color scheme branding, with a dark blue tone, accentuated by concentric multi-hued pinstripes banding the fuselage. Attempts were made to integrate the TranStar pilots with Southwest Airlines pilots, but in a classic example of misapplied BATNA an integrated seniority list was rejected by the TranStar pilot's association. 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.
