Air Canada exists because Parliament decided in 1937 that a country this wide needed an airline and that no private company would build one. Almost everything about the airline since follows from that origin.
Trans-Canada Air Lines, 1937–1964
Created by the Trans-Canada Air Lines Act as a subsidiary of Canadian National Railways, TCA was a Crown corporation with a public mandate: connect the country. It flew its first transcontinental service in 1939, Montreal to Vancouver, and expanded to transatlantic operations after the war.
The public mandate meant serving routes that were not commercially attractive, which shaped the airline's cost structure for decades.
Becoming Air Canada, 1965
The name change followed years of pressure, notably from Liberal MP Jean Chrétien, who argued that a bilingual country's airline needed a name that worked in both languages. "Trans-Canada Air Lines" had no natural French equivalent; "Air Canada" is identical in both. The legislation passed in 1964 and the name took effect in 1965.
Privatisation, 1988–1989
The Mulroney government privatised Air Canada in two tranches, ending fifty years of public ownership. Deregulation of Canadian aviation was happening in parallel, ending the era in which routes and fares were allocated by government.
The result was a competitive market Air Canada was not structured for, against Canadian Airlines International, which had been assembled from Pacific Western, CP Air and others.
The Canadian Airlines merger, 2000
Both carriers spent the 1990s losing money on routes they were flying against each other. Canadian Airlines approached insolvency, and after a contested takeover process Air Canada acquired it in 2000.
The integration was difficult — two workforces, two fleets, two cultures and a seniority list merger that generated litigation for years — and it left Air Canada with a near-monopoly on domestic trunk routes just as low-cost competition arrived.
Bankruptcy protection, 2003–2004
The post-2001 collapse in air travel, the SARS outbreak's effect on Toronto, high fuel costs and the debt from the Canadian merger together pushed Air Canada into filing for protection under the Companies' Creditors Arrangement Act in April 2003.
It restructured, shed costs and emerged in 2004 under a new holding structure, ACE Aviation. Aeroplan and Jazz were spun off as separate entities during this period, and Air Canada later bought Aeroplan back in 2019.
Where it is now
Air Canada is a founding member of Star Alliance, operates from hubs at Toronto, Montreal and Vancouver, and flies to roughly 180 destinations. Its fleet includes the Airbus A220 — the former Bombardier CSeries, still assembled in Quebec.
The through-line from 1937 is visible in the obligations that come with the name. Air Canada operates under the Official Languages Act, a legacy of its Crown corporation status that no other Canadian airline carries, and its route network still reflects a mandate to connect a country whose population is strung along a very long line.