Air Transport World

Air Canada: Celebrating 70 years of leadership.(Chronology)

Some of the world's leading airlines got their starts through the heroic competitive struggles of aviator entrepreneurs who began with a couple of little planes and built empires gradually over decades. The origins of Air Canada, which celebrates its 70th anniversary this year and its first passenger flight this month, aren't quite so romantic: It was created by an Act of Parliament and started from scratch by government bureaucrats. But as its long and successful history has shown, the bureaucrats got it right.

In the 1930s, Canada's well-developed rail network sprawled across the country, mainly in the hands of two operators: Government-owned Canadian National Railways and the private-sector Canadian Pacific Railway. But the advantages of air transportation were obvious for a nation that stretched from the Atlantic to the Pacific, from the vast Arctic territories to southern urban centers. Canadian officials were seeing many of their travelers and shippers using airline service across the US to get from one side of Canada to the other and they knew it was time to catch up.


The leading player in the nascent Canadian airline industry was Canadian Airways Ltd., created in 1930 by a merger of Western Canada Airways with Aviation Corp. of Canada, which owned four small carriers in the eastern part of the country. The two big railroads held minority stakes in CAL, which got most of its revenue from government mail contracts--although it carried a few passengers in its singleengine Fokker F14s and Boeing 40B mail planes with open cockpits. CAL worked closely with the government to develop an aviation infrastructure across Canada, from grass airstrips to navigational radio beacons. Air travel in those days was often a hair-raising affair and the few paying passengers often fortified themselves with drink. As one CAL executive famously remarked, "You wondered whether they flew because they had been drinking or drank because they wanted to fly."

The Depression brought hard times to CAL, especially when the government cut back mail contracts. When a new Liberal government under Mackenzie King took office in 1935, the airline expected to play a leading role in its aviation plans. The point man in the government's aviation efforts, who would retain that jurisdiction for many years, was C. D. Howe, an engineer by trade who made a fortune building grain elevators before entering politics and joining King's cabinet as minister for railways, canals and ports.


Perhaps because so many companies went broke during the Depression, King and Howe were disinclined to trust Canada's aviation future to the uncertainties of the private sector, so they spent months crafting legislation to create a national airline. Initially, they envisioned a public/private partnership that would include the two big railroads. Since it was already a government entity, CN would be an obvious participant. CP and CAL also were invited to become partners, but because the government insisted on holding a majority interest in, and thus control of, the new airline, CP and CAL bowed out.

TCA is Created In 1937, Canada's parliament approved a bill creating a new state carrier called Trans-Canada Air Lines, giving it exclusive rights to fly passengers, mail and cargo on the country's eastwest domestic trunk routes from Halifax to Montreal and Toronto and west to Winnipeg and Vancouver. …

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