Air Canada

History

Trans-Canada Air Lines (1937–1965)

Air Canada's predecessor, Trans-Canada Air Lines (TCA), was created by federal legislation as a subsidiary of Canadian National Railway (CNR) on 11 April 1937. The newly created Department of Transport under Minister C. D. Howe desired an airline under government control to link cities on the Atlantic coast to those on the Pacific coast. Using $5 million in Crown seed money, two Lockheed Model 10 Electras and one Boeing Stearman biplane were purchased from Canadian Airways and experienced airline executives from United Airlines and American Airlines were brought in.

Passenger flights began on 1 September 1937, with an Electra carrying two passengers and mail from Vancouver to Seattle, a $14.20 round trip, and, on 1 July 1938, TCA hired its first flight attendants. Transcontinental routes from Montreal to Vancouver began on 1 April 1939, using 12 Lockheed Model 14 Super Electras and six Lockheed Model 18 Lodestars. By January 1940, the airline had grown to about 579 employees.

Canadian Pacific Airlines (CP Air) suggested in 1942 a merger with TCA. Prime Minister William Lyon Mackenzie King rejected the proposal and introduced legislation regulating TCA as the only airline in Canada allowed to provide transcontinental flights. With the increase in air travel after World War II, CP Air was granted one coast-to-coast flight and a few international routes.

Originally headquartered in Winnipeg, also the site of its national maintenance base, the federal government moved TCA's headquarters to Montreal in 1949; the maintenance base would later also move east. With the development of the ReserVec in 1953, TCA became the first airline in the world to use a computer reservation system with remote terminals.

Renamed Air Canada and early years (1965–1990)

By 1964, TCA had grown to become Canada's national airline and, in 1964, Jean Chrétien submitted a private member's bill to change the name of the airline from Trans-Canada Airlines to Air Canada, which TCA had long used as its French-language name. This bill failed but it was later resubmitted and passed, with the name change taking effect on 1 January 1965. Elizabeth II, the Queen of Canada, flew on the first aircraft to bear the name and livery of Air Canada when she departed for the United Kingdom at the end of her 1964 tour of Prince Edward Island, Quebec, and Ontario.

During the 1970s, government regulations ensured Air Canada's dominance over domestic regional carriers and rival CP Air. Short-haul carriers were each restricted to one of five regions, and could not compete directly with Air Canada and CP Air. CP Air was subject to capacity limits on intercontinental flights, and restricted from domestic operations. Air Canada's fares were also subject to regulation by the government.

In 1976, with reorganization at CNR, Air Canada became an independent Crown corporation. The Air Canada Act of 1978 ensured that the carrier would compete on a more equal footing with rival regional airlines and CP Air, and ended the government's direct regulatory control over Air Canada's routings, fares, and services. The act also transferred ownership from Canadian National Railway to a subsidiary of the national government. Deregulation of the Canadian airline market, under the new National Transportation Act, 1987 officially opened the airline market in Canada to equal competition. The carrier's fleet expansion saw the acquisition of Boeing 727, Boeing 747, and Lockheed Tristar jetliners. In 1978 Judy Cameron became the first female pilot hired to fly for any major Canadian carrier when she was hired to fly by Air Canada.

With new fleet expenditures outpacing earnings, Air Canada officials indicated that the carrier would need additional sources of capital to fund its modernization. By 1985 the Canadian government was indicating a willingness to privatize both Canadian National Railways and Air Canada. In 1988, Air Canada was privatized, and 43% of shares were sold on the public market, with the initial public offering completed in October of that year. By this time, long-haul rival CP Air had become Canadian Airlines International following its acquisition by Pacific Western Airlines.

Strategic changes (1990s)

In the early 1990s, Air Canada encountered financial difficulties as the airline industry slumped in the aftermath of the Persian Gulf War. In response, the airline restructured management by hiring former Delta Air Lines executive Hollis L. Harris as its CEO. Harris restructured the airline's operations, reduced management positions, moved the corporate headquarters to Dorval Airport, and sold the enRoute card business to Diners Club in 1992. By 1994, Air Canada returned to profitability. The same year also saw the carrier winning route access to fly from Canada to the new Kansai Airport in Osaka, Japan.

In 1995, taking advantage of a new US-Canada open skies agreement, Air Canada added 30 new trans-border routes. In May 1997, Air Canada became a founding member of the Star Alliance, with the airline launching codeshares with several of the alliance's members. The second half of the 1990s saw the airline earn consistent profits, totalling $1 billion for the 1997 to 1999 period.

On 2 September 1998, pilots for Air Canada launched the company's first pilots' strike, demanding higher wages. At the end of 1999, the Canadian government relaxed some aviation regulations, aiming to consolidate the Canadian airline industry. That year, American Airlines in conjunction with Canadian financial company to Onex Corporation, launched takeover bids for ailing rival Canadian Airlines and Air Canada, spurring Air Canada to submit a competing offer for its largest rival.

Merger and reorganization (2000s)

In January 2000, Air Canada acquired Canada's second-largest air carrier, Canadian Airlines International, merging the latter's operations, becoming the world's twelfth-largest airline in the first decade of the 21st century. As Air Canada gained access to its former rival's financial statements, officials learned that the carrier was in worse financial shape than was previously believed. An expedited merger strategy was pursued, but in summer 2000 integration efforts led to flight delays, luggage problems and other frustrations. Service improved following Air Canada officials' pledge to do so by January 2001. The airline was confronted by the global aviation market downturn after the September 11 attacks and increased competition, posting back-to-back losses in 2001 and 2002.

As Air Canada had employed a scorched earth policy to prevent the Onex proposed acquisition as one of its lines of defence, it had burdened itself with onerous contracts with almost all of its suppliers. As a result, on 1 April 2003, Air Canada filed for protection under the Companies' Creditors Arrangement Act; it emerged from this protection on 30 September 2004, 18 months later. During the period of bankruptcy protection, the company was subject to two competing bids from Cerberus Capital Management and Victor Li. The Cerberus bid would have seen former Prime Minister Brian Mulroney installed as chairman, being recruited by Cerberus' international advisory board chair Dan Quayle, the former vice-president of the United States. Cerberus was rejected because it had a reputation of changing existing employee pension agreements, a move strongly opposed by the CAW. At first, Air Canada selected Victor Li's Trinity Time Investments, which initially asked for a board veto and the chairmanship in return for investing $650 million in the airline. Li, who holds dual citizenship from Canada and Hong Kong, later demanded changes to the pension plan (which was not in his original takeover bid), but since the unions refused to budge, the bid was withdrawn.

Finally, Deutsche Bank unveiled an $850 million financing package for Air Canada, if it would cut $200 million in annual costs in addition to the $1.1 billion that the unions agreed on in 2003. The offer was accepted after last-minute talks between CEO Robert Milton and CAW president Buzz Hargrove resulted in union concessions.

ACE Aviation Holdings became the new parent company under which the reorganized Air Canada was held.

2010s

In December 2010, ACE sold 44 million Air Canada shares, followed by the remaining 31 million shares in November 2012 to Cormark Securities Inc.

On 9 February 2017, a new retro red and black aircraft livery was launched, to coincide with Air Canada's 80th anniversary and Canada's 150th anniversary of Confederation. The update includes design aspects from the logo used between 1964 and 1992, with an overall white colour scheme, with a black underside, tail fin with red maple leaf rondelle, black "Air Canada" lettering with a red maple leaf rondelle underneath, and a black "mask" surrounding the cockpit windows.

In December 2013, Air Canada ordered 61 Boeing 737 MAX single-aisle narrow body aircraft to replace its existing fleet of Airbus A320 series aircraft with the first MAX 8 variant delivered on 2 November 2017. Some Airbus A319s will be transferred to Air Canada's Rouge subsidiary, with the remaining fleet retired. As part of the deal, Boeing purchased 25 Embraer E190s from Air Canada that were retired in 2016. The same year, Air Canada signed an agreement with Bombardier Aerospace to replace the E190s with Airbus A220/CSeries aircraft from 2019.

In July 2017, Air Canada reintroduced Premium Economy on its North American wide-body flights.

In April 2018, Air Canada rebranded its international business class cabin as Air Canada Signature Class. Passengers could expect an enhanced menu, including the new Air Canada Signature Cocktail, as well as new amenity kits, a chauffeur service (using BMW vehicles) at its hubs during domestic to international connections, and access to the Air Canada Signature Suite at Toronto Pearson International Airport. On select North American routes, Air Canada Signature Service is offered on widebody aircraft.

In May 2018, Air Canada listed Taiwan as part of China to comply with a requirement of China's civil aviation administration. On 6 June 2018, Air Canada and Air China signed a joint venture, the first joint venture between a North American and Chinese airline.

On 16 May 2019, Air Canada announced it was in exclusive talks to buy Transat A.T., the parent company that owns Air Transat, for CA$520 million.

2020s

Travel restrictions caused by the COVID-19 pandemic forced Air Canada to heavily restrict service. On 18 March 2020, the airline announced it would suspend most of its flights by 31 March. Service began to return to normal on 22 May, with flights to more cities being added over the summer. In its first quarterly financial report, Air Canada announced it had lost CA$1.05 billion, compared to a profit of CA$345 million in Q1 2019. The airline similarly suffered in the third quarter, reporting a loss of CA$685 million. It stated capacity in the fourth quarter of the 2020 fiscal year would be 75 per cent lower than the previous year. In June 2022, after the provincial governments across the country began lifting pandemic-era restrictions, Air Canada announced it was cancelling over 150 daily flights in the summer due to unprecedented and unexpected pressure in the aviation industry.

In April 2021, the Government of Canada acquired 6.4% of Air Canada as a part of a $5.9 billion COVID-19 related assistance package, and has not ruled out further investment. In 2024, the Government sold its stake in Air Canada, confirming they "...did not intend to be a long-term owner of the shares."

In September 2022, Air Canada welcomed the Government of Canada's decision to lift remaining COVID-19 restrictions, including requirements for wearing masks on aircraft, testing and quarantine, and the compulsory use of ArriveCAN beginning 1 October 2022 and noted that the measures were not justified by science.

On 22 March 2022, Air Canada placed a order for 26 Airbus A321XLR aircraft, making Air Canada the second airline in Canada to fly the Airbus A321neo family of aircraft, alongside Air Transat. On September 25, 2023, Air Canada also placed a order for 18 Boeing 787-10 Dreamliner aircraft.

On 23 October 2023, Air Canada announced that it would retrofit the Airbus A321, and 8 of its Airbus A320 aircraft with the A220 standard to replace the XM cabin, which would feature Airspace XL bins, new entertainment screens, exterior cameras, and satellite based Wi-Fi.

On 17 December 2024, Air Canada announced that it would transfer its Boeing 737 MAX 8 aircraft to Air Canada Rouge, and it would create a hub for Rouge at Vancouver International Airport. Air Canada Rouge's Airbus A320 and A321 fleet will transfer to the mainline fleet as part of the transition, and would be retrofitted with the A220 standard.

Corporate affairs

Business trends

Air Canada had been loss-making for several years, but was profitable from 2012; however, due to the impact of the COVID-19 pandemic, the company was again loss-making in 2020. The key trends for the Air Canada group, including Air Canada Express and Air Canada rouge, are (years ending 31 December):

Ownership

Air Canada became fully privatized in 1989, and its variable voting shares are traded on the Toronto Stock Exchange (TSX:AC), and, since 29 July 2016, on OTCQX International Premier in the US under the single ticker symbol "ACDVF".

Currently, the Air Canada Public Participation Act (ACPPA) limits ownership of Air Canada's voting interests by non-residents of Canada to a maximum of 25%. The Canada Transportation Act (CTA) also requires that Canadians own and control at least 75% of the voting interests of licensed Canadian carriers. Accordingly, Air Canada's articles contain restrictions to ensure that it remains "Canadian" as defined under the CTA.

Prior to 1976, Air Canada was a department of the Canadian National Railway (CNR), helmed by a department head who reported to the president of CNR. Since 1976, the following have been CEO and president:

Headquarters and Operations Centre

By federal law (Air Canada Public Participation Act), Air Canada is obligated to keep its head office in Montreal. Its corporate headquarters is Air Canada Centre (French: Centre Air Canada), also known as La Rondelle ("The Puck" in French), a 7-storey building located on the grounds of Montréal–Trudeau International Airport in Saint-Laurent.

In 1975, Air Canada was headquartered at 1 Place Ville-Marie in Montreal.

In 1990, the airline moved its headquarters to the airport to cut costs.

Air Canada's Operations Centre is located in Brampton, Ontario, and oversees all flight operations including dispatching and crew scheduling. It has an off-site disaster recovery site and is typically unused.

Air Canada Pension Plan

Trans-Canada Capital manages Air Canada's pension plan and its $30 billion in assets. TCC has allocated funds in: Canadian fixed income; absolute return hedge funds; and, real estate, infrastructure, private equity, private debt.TCC's team grew the fund from $23 billion in 2020 to $30 billion in 2024. TCC began a partnership with Pretium Partners in 2013, investing in their single-family rental real estate strategy. The fund adheres to Environmental, social, and governance (ESG) rules and refrains from investing in companies associated with coal, tobacco and weapons production.

Subsidiaries

Air Canada Cargo is the company's freight carrying division based at Toronto-Pearson, offering more than 150 shipping destinations through the Air Canada airline network, ground logistics and airline partners. Its route network has focused on European destinations through Eastern Canada departure points, along with direct services from Vancouver and Calgary to Frankfurt, London, Paris, and Zurich.

In Toronto, a new cargo terminal was completed in early 2002 which featured modernized inventory and conveyor systems. Cargo terminals are also found in Vancouver, Calgary and Montreal.

On 17 April 2023, a grand theft occurred at the Air Canada cargo terminal at Toronto Pearson International Airport. A container containing gold bars and currency valued at over C$20 million was stolen. Two Air Canada employees allegedly participated in this theft.

Air Canada Express is the brand name of Air Canada's regional feeder service operated by independent carriers Jazz Aviation and PAL Airlines.

Launched in 2002, Air Canada Jetz is a charter service targeting sports teams, professional entertainers, and corporations. The Air Canada Jetz fleet consists of Airbus A319 and A320 aircraft in an all business class configuration. In February 2014, Air Canada decided to leave the sports charter business. However, on 17 March 2015, Air Canada announced an agreement with several NHL teams to provide charter services under the Air Canada Jetz brand for six years starting from the 2015–2016 NHL season.

Launched in December 2012, Air Canada Rouge is a subsidiary of Air Canada. Air Canada Rouge serves predominantly leisure destinations in Europe, the Caribbean, South America, Central America, Mexico and the United States using Airbus A319, Airbus A320, and Airbus A321. Air Canada Rouge's former routes to Asia, Europe, and South America were cancelled after the retirement of its Boeing 767-300ER aircraft.

Air Canada Vacations is Air Canada's tour operator. All packages include accommodation, Aeroplan Miles and roundtrip airfare aboard Air Canada and/or its Star Alliance partners.

Former subsidiaries

In 2001, Air Canada consolidated its wholly owned regional carriers Air BC, Air Nova, Air Ontario, and Canadian Regional Airlines into Air Canada Regional Incorporated. Several of these air carriers had previously operated as an "Air Canada Connector". In 2002, the consolidation was completed with the creation of a new brand, Air Canada Jazz. Air Canada Jazz was spun off in November 2006. ACE Aviation Holdings is no longer a shareholder of Jazz Aviation LP, making it an independent company. Air Canada Jazz was the brand name of Air Canada's main regional product from 2002 to 2011. As of June 2011, the Air Canada Jazz brand is no longer being marketed as all regional operators adopted the Air Canada Express name. Jazz Aviation is the largest of these affiliates, operating 125 aircraft on behalf of Air Canada.

On 1 November 2001, Air Canada launched Air Canada Tango, designed to offer no-frills service and lower fares using a dedicated fleet of 13 Airbus A320s in an all economy configuration of 159 seats. In Canada, it operated from Toronto to Vancouver, Calgary, Edmonton, Winnipeg, Regina, Saskatoon, Thunder Bay, Ottawa, Montreal, Halifax, Gander and St. John's. In addition, it operated non-stop service between Toronto and Fort Lauderdale, Orlando and Tampa; as well as non-stop service between Montreal and Fort Lauderdale and Orlando. Tango was intended to compete with Canada 3000. The Tango service was dissolved in 2004. Air Canada once called its lowest fare class "Tango". As of 2018, Air Canada has renamed the Tango fare class to Standard fare.

In 2002, Air Canada launched a discount airline to compete directly with WestJet on routes in Western Canada. Zip operated ex-Canadian Airlines International 737-200s as a separate airline with its own staff and brightly painted aircraft. It was disbanded in 2004.

Destinations and hubs

Hubs

Air Canada currently operates three hubs.

Toronto–Pearson: Air Canada's primary global hub.

Montréal–Trudeau: secondary hub for the East Coast and principal gateway to France and other international destinations.

Vancouver: secondary hub for the West Coast and premier Asia-Pacific gateway.

Destinations

As of January 2024, Air Canada flies to 64 domestic destinations and 158 international destinations across Asia, Africa, the Americas, Europe, and Oceania. Along with its regional partners, the carrier serves over 222 destinations in 47 countries, on six continents worldwide.

Air Canada currently flies two fifth freedom flights, São Paulo-Buenos Aires and London Heathrow-Delhi. Air Canada has flown a number of fifth freedom routes (passenger and cargo rights between two non-Canadian destinations) in the past, including: Honolulu–Sydney, London Heathrow–Düsseldorf, Paris–Geneva, Paris–Munich, Paris–Berlin, Frankfurt–Zürich, Zürich–Zagreb, Zürich–Vienna, Zürich–Delhi, Manchester–Brussels, Lisbon–Madrid, Brussels–Prague, London Heathrow–Mumbai, London Heathrow–Nice, London Heathrow–Mumbai–Singapore, Montego Bay–Kingston (KIN), and Santiago–Buenos Aires. However, these were replaced with nonstop routes: Vancouver–Sydney, Toronto–Munich, Toronto–Brussels, Toronto–Zürich, Vancouver–Zürich, Toronto–Vienna, Toronto–Delhi, Vancouver–Delhi, Toronto–Madrid, and Toronto–Mumbai.

Joint ventures

Air Canada have joint ventures with the following airlines:

Codeshare agreements

Air Canada codeshares with the following airlines:

Interline agreements

Air Canada has interline agreements with the following airlines:

Services

Air Canada has three classes of service, Business/Signature, Premium Economy, and Economy. On most long-haul international and short-haul routes operated by widebody aircraft, Signature Class, Premium Economy, and Economy Class are offered; most short-haul and domestic routes feature Business Class and Economy Class. All mainline seats feature AVOD (Audio Video On Demand) and mood lighting. Air Canada Express features Business Class and Economy Class, on CRJ900 and Embraer E175 aircraft; all other Air Canada Express aircraft have one-class economy cabins. All narrowbody mainline aircraft, as well as Air Canada Express CRJ900 and Embraer E175 aircraft have onboard Wi-Fi installed, which is also being installed on all widebody aircraft.

Starting in 2025, Air Canada, in partnership with Bell Canada, will roll out fast and free Wi-Fi to Aeroplan members on Wi-Fi-equipped planes flying within North America, Mexico, and the Caribbean. Air Canada said about 85% of its fleet will be covered. It plans to roll it out to its international fleet starting in 2026.

In the spring of 1987, Air Canada enacted no-smoking flights between Canada and New York City as a test. After a survey reported that 96% of passengers supported the smoking ban, Air Canada extended the ban to other flights.

Cabin crew

On 9 February 2017, a new uniform scheme coinciding with Canada's 150th and Air Canada's 80th anniversaries was unveiled. Air Canada partnered with Vancouver-born fashion designer Christopher Bates to design the new uniforms which incorporate a base colour of black or grey with red lettering and the famous maple leaf.

Between 2004 and 2017, Air Canada uniforms used a midnight blue colour. The uniforms were designed by Canadian fashion designer Debbie Shuchat. At a presentation in the Toronto Airport hangar, Celine Dion helped the newly solvent airline debut its new image.

Frequent flyer program

Aeroplan is Air Canada's frequent flyer rewards program, both allowing for points collection and spending, as well as status and rewards as an Air Canada customer. After Air Canada and Aeroplan changed the division of points collection and redemption, Air Canada introduced an internal rewards program, Altitude. The two programs operate in conjunction.

In May 2017, Air Canada announced it plans to launch a new loyalty program to replace Aeroplan and Altitude in 2020. On 10 January 2019, Air Canada re-acquired Aeroplan from Aimia. In 2020, Air Canada Altitude and Aeroplan merged, with Aeroplan as the surviving entity.

Air Canada Altitude

On 20 September 2012, Air Canada unveiled its new frequent flyer status program named "Air Canada Altitude" to supplement Aeroplan. Aeroplan remained the frequent flyer rewards program, collecting miles which can be "spent", whereas status level is determined by Altitude standing.

There are five levels of membership in Air Canada's Altitude Program: Basic, Prestige 25K, Elite 35K, Elite 50K, Elite 75K and Super Elite 100K. The latter three are called "Top Tier" membership levels and provide travel benefits such as upgrades, lounge access, priority services (e.g., check-in, luggage handling), and bonuses when earning miles through air travel. In order to qualify for these levels, a member must earn, through flight activities, a certain number of miles or a certain number of segments and spending some level of money. Altitude refers to these as Altitude Qualifying Miles (AQM), Segments (AQS), and Dollars (AQD).

Prestige members and Altitude Elite 35 K receive Star Alliance Silver status, while Elite 50K, Elite 75K, and Super Elite 100K members receive Star Alliance Gold status.

Air Canada Status Miles are calculated on an annual basis to determine Altitude Membership Status for the following benefit year (1 March through 28 February). At the 35K and above levels, that level of status is granted when achieved, for the remainder of the current year, as well as for the next year.

This coincides with the alliance with Star Alliance, and this can give Star Alliance Gold passengers access to any Star Alliance lounge and discounts or upgrades on another Star Alliance member.

On 8 November 2020, Air Canada Altitude renamed as Aeroplan Elite Status. Altitude Qualifying Miles (AQM), Segments (AQS), and Dollars (AQD) have been replaced by Status Qualifying Miles (SQM), Segments (SQS), and Dollars (SQD).