At some point in 1995, the government of the Skully Islands was overthrown in a coup d'état by a well armed militia with undetermined intentions, seizing various installations such as military bases and refineries in a rapid and highly organized offensive. The FCU military launched several attacks to reclaim the island chain, but were repeatedly repelled by surprise attacks. In response to the crisis, the Federation appointed Commander Robert Tyler of the FCU armed forces' southern district to launch an offensive to defeat the group and liberate the islands from their grasp. To aid in the operation, Unified Command procured the services of the mercenary Scarface Squadron and their leader Phoenix.
The unit was initially deployed in a mission to intercept C-5 Galaxy cargo aircraft on a resupply mission to evaluate their abilities, leading them to become a central asset in Tyler's offensive. Over various weeks, Phoenix and his pilots attacked the rebel forces in several operations, including the recapture of Donet City, the destruction of oil refineries and the elimination of the Scorpion Island stronghold, before ultimately destroying the rebels' central headquarters.
After the fall of their main base, a final force seized an aerial warship known as the Sky Fortress and set off to attack an unspecified target in the islands. The Sky Fortress was destroyed by Scarface before it could reach the mainland, leading to the ultimate defeat of the rebels and the restoration of the legitimate government.
With the insurrection forces defeated, it seemed that peace was restored to the island chain.
During the ongoing Belkan War, the nations of Usea banded together to face the ever-growing threat of both the Osean Federation and the Union of Yuktobanian Republics. A few years later, the southern nations decided to form an alliance with the former, much to the dismay of the northern and western nations who strongly protested against the movement. These conflicting views eventually sparked the Usean coup d'état in 1998, which spanned the entire continent, including the Skully Islands.