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 of these evolved into the modern Canadian lines. James A. Richardson, a Winnipeg businessman, 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 stewardesses. 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 could be met by smaller and intermediate-sized lines 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.

Throughout the post-World War II years, the line endured numerous labor and financial problems. Furthermore, it had a difficult time trying to expand into the US 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 7 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, and in 1954, at Moosejaw, 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 at Halifax in heavy snow, damaging the power lines and causing a power outage at the airport. However, none of the 133 passengers and 5 crew members was seriously injured.

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 in the world. 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 continued to struggle 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. As of 2015, however, Air Canada continued to overbook its flights, arguing on its website that this allowed it to make tickets refundable without losing money.

As of 2015, Air Canada carried thirty-eight million passengers annually and employed twenty-four thousand people. Through its own lines and connecting flights it reached more than ninety airports in Canada and the United States, in total serving over 180 destinations in forty-six countries on five continents. Its major hubs were located in Toronto, Montreal,Vancouver, and Calgary, and it had a fleet of 364 planes.

Bibliography

National Transportation Safety Board. Aircraft Accident Report: Air Canada Flight 797. Washington, DC: Author, 1986. Print.

Noble, Kimberly, et al. “Air Gerry.” Maclean’s 112.36 (1999): 42–5. Print.

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

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

Tomlinson, Kathy. "Couple Incensed as Air Canada Overbooking Continues." CBC News. CBC/Radio-Canada, 7 Oct. 2013. Web. 3 Dec. 2015.