Air Canada

Definition: Major airline company of Canada.

Significance: Air Canada is the major airline of Canada, supported by both private investment and government subsidies.

Government Air Service

Canadian air history began in 1909 when John McCurdy piloted his famous “Silver Dart” on its first flight. After World War I, small so-called bush airlines introduced commercial air flight into the country, and some evolved into the modern Canadian lines. James A. Richardson, a Winnipeg businessperson, started Western Canadian Airlines, which later became Canadian Pacific Airlines and then Canadian Airlines International. The Canadian parliament passed the Trans-Canada Airline Act on April 10, 1937, creating Trans-Canada Air, which began with a new Lockheed 10A Electra, two used Electras, and a Stearman Model 4. The new company hired the bush pilots, who had to learn instrument flying on the Electras. At first, Trans-Canada Air served as an airmail carrier flying from Vancouver to Seattle and only began regular commercial passenger service in 1939. The line accepted applications for flight attendants. A thousand applied; twelve were hired.

The postwar period represented an era of continued growth and expansion. The carrier transported more than 180,000 passengers in 1945 and employed more than 32,000 people, compared to 21,000 passengers and less than 500 employees in 1939. In 1945, the airline bought its first Douglas DC-3, which flew until 1983.

Trans-Canada enjoyed a government monopoly on all domestic Canadian air routes from 1937 to 1959, but then the government granted other Canadian companies the right to compete. Many remote northern areas of Canada were accessible only by air, and the country required a broad range of air services that smaller and intermediate-sized lines could meet, in addition to Trans-Canada. Canadian Airlines and Canadian Pacific Airlines (CPA) emerged as major rivals. Four other important regional airlines and hundreds of smaller companies competed as well. On January 1, 1965, Trans-Canada Air changed its name to Air Canada.

The line endured numerous labor and financial problems throughout the post-World War II years. Furthermore, it had difficulty expanding into the United States market and complained that American government officials favored American companies. In response, Air Canada sought partners in other countries. In 1966, the company signed a key agreement with the Soviet airline Aeroflot, becoming the first North American airline to do so, and setting up routes for both carriers from Moscow to Canada.

Air Disasters

The worst disaster of Trans-Canada Air occurred on November 29, 1963, at St. Thérèse de Blainville, north of Montreal, when Flight 831, a DC-8F, went down, killing all 111 passengers and seven crew on board. This was the third fatal crash on the line’s passenger flights. The first occurred at Armstrong, Ontario, in February 1941, when a Lockheed 14 crashed, killing twelve (nine passengers and three crew). In 1947, a Lockheed 18 went down near Vancouver, killing twelve passengers and three crew. In 1954, at Moose Jaw, Saskatchewan, a training plane crashed into a Trans-Canada North Star DC-4M, killing thirty-one passengers and four crew, as well as the pilot of the trainer and a woman on the ground. In June 1983, a fire in the washroom of Air Canada Flight 797, a DC-9, forced the plane to land at Cincinnati Airport in Covington/Hebron, Kentucky. Eighteen passengers and five crew escaped, but twenty-three passengers died in the fire.

In March 2015, Air Canada Flight 624 crashed on the runway while landing in heavy snow in Halifax, damaging the power lines and causing a power outage at the airport. However, none of the 133 passengers and five crew members were seriously injured. Although an Air Canada jet experienced an in-air engine shutdown in 2024, the plane was able to land safely. 

Privatization

In 1989, the Canadian government privatized Air Canada, but problems from competitors continued. The airline replaced its Boeing 727s with Airbus A300s and Boeing 767s. In 1997, Air Canada formed the Star Alliance, the foremost international air alliance group, along with United Air Lines, Lufthansa, Thai Airways International, and Scandinavian Airlines System (SAS). In 2001, Air Canada acquired Canada's second-largest air carrier, Canadian Airlines, becoming the seventh-largest airline in North America and the twelfth-largest globally. The merger, however, did not bring all the hoped-for benefits. Air Canada still suffered stiff competition from airlines with low fares and better service, particularly WestJet, which showed a profit even as Air Canada posted losses, which it blamed on the global downturn in commercial aviation. The airline lost money in 2001 and 2002 and filed for bankruptcy in 2003. Cerberus Capital Management and Trinity Time Investments issued competing bids to bail the airline out, but both demanded cuts to pensions, which the unions refused to accept. Deutsche Bank then offered an $850 million financing package on the condition that Air Canada cut $200 million in annual costs, and Air Canada agreed. The company exited bankruptcy on September 30, 2004, but struggled financially over the following decade. In addition, the company drew widespread criticism in 2013 when it was revealed that it practiced systematic overbooking, and the Canadian Transport Agency issued a ruling in May of that year that the airline had to compensate passengers $200 to $800 each when they were turned away from an overbooked flight. Air Canada has stated that it must occasionally overbook its flights to allow it to make tickets refundable without losing money.

Into the mid-2020s, Air Canada carried 46 million passengers and employed over 37,000 people. Through its own lines and connecting flights, it reached more than fifty airports in the United States. In total, Air Canada served over 195 destinations on six continents. Its major hubs were located in Toronto, Montreal, Vancouver, and Calgary, and it had a fleet of over 187 planes.

Bibliography

“Air Canada Corporate Profile.” Air Canada, Aug. 2025, www.aircanada.com/ca/en/aco/home/about/corporate-profile.html#. Accessed 19 Jan. 2026.

“Air Canada - Passenger Traffic 2023.” Statista, 29 Nov. 2025, www.statista.com/statistics/689833/passenger-traffic-air-canada. Accessed 19 Jan. 2026.

“Air Safety Incidents for Air Canada.” AeroInside, www.aeroinside.com/airline/air-canada#google_vignette. Accessed 19 Jan. 2026.

National Transportation Safety Board. Aircraft Accident Report: Air Canada Flight 797, 1986.

Noble, Kimberly, et al. “Air Gerry.” Maclean’s, vol. 112, no. 36, 1999, pp. 42–5.

“Our Fleet.” Air Canada, www.aircanada.com/ca/en/aco/home/fly/onboard/fleet.html#. Accessed 19 Jan. 2026.

Pigott, Peter. Air Canada: The History. Dundurn, 2014.

Ramsay, Michael. “Muffled Cries Alert Jet Passengers to Worker Trapped in Cargo Hold.” NewsNation, 19 Jan. 2026, www.newsnationnow.com/travel/airline-employee-trapped-baggage-hold-canada/. Accessed 19 Jan. 2026.

Smith, Philip. It Seems Like Only Yesterday: Air Canada, the First Fifty Years. McClelland, 1986.

Tomlinson, Kathy. "Couple Incensed as Air Canada Overbooking Continues." CBC News, 8 Oct. 2013, www.cbc.ca/news/canada/british-columbia/couple-incensed-as-air-canada-overbooking-continues-1.1894951. Accessed 19 Jan. 2026.