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Serving over 32 million customers annually, Air Canada is Canada's largest full-service airline as well as the largest provider of scheduled passenger services in Canada, the Canada-US transborder market, and the international (to and from Canada) market. Air Canada provides direct passenger service to over 170 destinations on 5 continents.

In 1937, Prime Minister Mackenzie King with the Canadian government created Trans-Canada Air Lines (TCA) as a Crown corporation. Its mission was to provide transcontinental airline service within Canada's borders. It was originally a wholly owned subsidiary of the government-owned Canadian National Railway Corporation. The Government maintained a monopoly on routes until 1967. Tran Canada Airlines grew during World War II. In 1959, the Canadian government allowed CP Air to provide one flight per day in each direction between Vancouver and Montreal. In 1967 the Canadian government reduced its regulations and permitted CP Air two flights per day. As well, the Canadian government allowed CP Air to establish a route from Vancouver to San Francisco, California making it the first trans-border route not flown by TCA. On January 1, 1965 the name of the airline was officially changed to Air Canada.

By 1970, although there was increasing competition from CP Air, TCA still held a monopoly on all other international routes and intercontinental domestic air travel. When Parliament passed the Air Canada Act of 1978, the TCA, a Crown corporation, was now subjected to the same regulations and regulatory as the other airlines bringing it more completely into competition with CP Air and the other regional airlines. The Act ended the government's regulatory control over Air Canada's fare structures, routes, and services. Also, Air Canada would no longer be a subsidiary of Canadian National Railway, becoming a direct wholly owned subsidiary of the Canadian government.

Parliament passed the National Transportation Act of 1987, which became effective January 1, 1988. On April 12, 1988, Mazankowski, the minister responsible for privatization, announced that Air Canada would be sold to the public. The sale was viewed as an ambitious act of privatization. The sale was subjected to several conditions that were placed into the legislation which Parliament approved in August 1988.

In July 1989 the company completed its move to privatization with the filing of a prospectus for its second issue of stock. On April 1, 2003, Air Canada filed for bankruptcy protection after several cost-cutting and capacity-reduction initiatives were unsuccessful. In September 2003 the corporation announced two finalists in the bidding for a major Air Canada stake: Victor Li, a Hong Kong businessman with Canadian citizenship, and New York private-equity firm Cerberus Capital Management, L.P. Victor Li's Trinity Time Investments was selected but the bid was withdrawn after his company did not receive changes to the pension plan.

Deutsche Bank unveiled an $850-million financing package for Air Canada, if it would cut $200 million in annual cost cutting in addition to the $1.1 billion that the unions agreed on in 2003. It was accepted after last-minute talks between CEO Robert Milton and CAW president Buzz Hargrove. ACE Aviation Holdings became the new parent company under which the reorganized Air Canada was held.