What Happened To Canadian Airlines?

August 5, 2019


Did you know there was once an airline in Canada that was part of the OneWorld Alliance? In fact, the name of that airline was Canadian – and it was a founding member of the alliance. Yes, before WestJet was Air Canada’s major domestic rival there was Canadian Airlines. But what happened to them?

Where it all began

According to Wikipedia, Canadian Airlines was formed on March 27th, 1987, after a series of acquisitions and mergers of the following airlines:

Pacific Western
Canadian Pacific (CP Air)
Eastern Provincial Airways

Two years later, in 1989, it went on to acquire Wardair. This gave the airline access to new routes including to the UK and Europe. Its major hubs were the three largest Canadian cities:

Toronto (YYZ)
Montreal (YUL)
Vancouver (YVR)

Canadian was also one a founding member of the OneWorld airline alliance, along with airlines Qantas, American Airlines and British Airways.

In the last few years of its service, Canadian Airlines expanded its international route network in Asia. The airline flew to destinations as far as:

Hong Kong

At that time it gave Canadian Airlines the distinction of flying to more places in Asia, more often than any other Canadian carrier.

Financial difficulties and acquisition

Unfortunately, Canadian Airlines was hit hard by a slump in the airline industry in 1991. In addition to debt restructuring, the airline was further aided by an injection of cash from the American Airlines Group. Seven years later the airline was also feeling the effects of an Asian economic downturn in 1998 and saw its air traffic decrease, unfortunately mainly in the transpacific where it was focusing much of its energy.

It would also be reasonable to assume that the start and growth of WestJet also took away market share from the airline. WestJet started up in 1994.

After continued poor performance, Canadian Airlines was acquired by Air Canada in 2000. There were other proposals for the airline’s survival but they were all rejected. This even included a competing bid led by American Airlines to purchase Canadian. American Airlines had already maxed out its government-imposed limit of foreign ownership set at the time as 25%. That limit has since been increased.

When the merger took place, Canadian Airlines had over 40% of the domestic passenger market in Canada.

Canadian Airlines had a fleet of 14 DC-10-30 aircraft.
The Canadian airspace now

The Canadian airspace now consists of two major players: Air Canada and WestJet. These two airlines have their own low-cost subsidiaries: Air Canada Rouge and Swoop. Now acquired by Air Canada, Air Transat has some great routes but remains largely a charter and leisure airline.

Earlier this year WestJet was acquired by major private investment firm Onex for US$3.7 billion.


The Canadian air travel industry will continue to evolve but it looks like Air Canada will retain its top spot for a while. Hopefully, WestJet (and their new owners/investors) will keep the sector competitive.

Did you ever get the chance to fly with Canadian Airlines? How did the service and product compare to other airlines at the same time? Let us know by leaving a comment! 

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