[11] Canada's national airline originated from the Canadian federal government's 1936 creation of Trans-Canada Air Lines (TCA), which began operating its first transcontinental flight routes in 1938.

Prime Minister William Lyon Mackenzie King rejected the proposal and introduced legislation regulating TCA as the only airline in Canada allowed to provide transcontinental flights.

[25] With new fleet expenditures outpacing earnings, Air Canada officials indicated that the carrier would need additional sources of capital to fund its modernization.

In the early 1990s, Air Canada encountered financial difficulties as the airline industry slumped in the aftermath of the Persian Gulf War.

[21] In response, the airline restructured management by hiring former Delta Air Lines executive Hollis L. Harris as its CEO.

Harris restructured the airline's operations, reduced management positions, moved the corporate headquarters to Dorval Airport,[21] and sold the enRoute card business to Diners Club in 1992.

[21] In 1995, taking advantage of a new US-Canada open skies agreement, Air Canada added 30 new trans-border routes.

That year, American Airlines in conjunction with Canadian financial company Onex Corp, launched takeover bids for ailing rival Canadian Airlines and Air Canada, spurring Air Canada to submit a competing offer for its largest rival.

[23] An expedited merger strategy was pursued, but in summer 2000 integration efforts led to flight delays, luggage problems and other frustrations.

[23] As Air Canada had employed a scorched earth policy to prevent the Onex proposed acquisition as one of its lines of defense, it had burdened itself with onerous contracts with almost all of its suppliers.

During the period of bankruptcy protection, the company was subject to two competing bids from Cerberus Capital Management and Victor Li.

Cerberus was rejected because it had a reputation of changing existing employee pension agreements, a move strongly opposed by the CAW.

The offer was accepted after last-minute talks between CEO Robert Milton and CAW president Buzz Hargrove resulted in union concessions.

[32] In October 2004, Canadian singer Celine Dion became the face of Air Canada, hoping to relaunch the airline and draw in a more international market after 18 months of bankruptcy protection.

[34] On 31 October 2004, the last Air Canada Boeing 747 flight landed in Toronto from Frankfurt as AC873, ending 33 years of 747 service with the airline.

[40] New cabin features included:[41][42][43][44][45] High fuel prices and the Great Recession caused Air Canada significant financial difficulties in the late 2000s.

Rovinescu, reported to be "an enforcer", was Air Canada's chief restructuring officer during its 2003 bankruptcy; he resigned that year after unions rejected his demands.

[50] In July 2009, Air Canada requested and received CA$1 billion in financial aid from a consortium of entities, including the Canadian government, ACE, and associate company Aeroplan.

The Centre for Aviation reported that only CA$600 million was actually loaned to Air Canada; the rest of the money was from sale-leaseback accounting and "aggregating an array of biscuit-tin savings".

[59] Passengers could expect an enhanced menu, including the new Air Canada Signature Cocktail, as well as new amenity kits, a chauffeur service (using BMW vehicles) at its hubs during domestic to international connections, and access to the Air Canada Signature Suite at Toronto Pearson International Airport.

[63] The plan was "expected to face intense scrutiny from the Competition Bureau and other regulatory authorities, including in Europe", according to CBC News.

[70] In June 2022, after the provincial governments across the country began lifting pandemic-era restrictions, Air Canada announced it was cancelling over 150 daily flights in the summer due to unprecedented and unexpected pressure in the aviation industry.

[100] Its route network has focused on European destinations through Eastern Canada departure points, along with direct services from Vancouver and Calgary to Frankfurt, London, Paris, and Zurich.

On 17 April 2023, a grand theft occurred at the Air Canada cargo terminal at Toronto Pearson International Airport.

[103] Launched in 2002, Air Canada Jetz is a charter service targeting sports teams, professional entertainers, and corporations.

All packages include accommodation, Aeroplan Miles and roundtrip airfare aboard Air Canada and/or its Star Alliance partners.

In Canada, it operated from Toronto to Vancouver, Calgary, Edmonton, Winnipeg, Regina, Saskatoon, Thunder Bay, Ottawa, Montreal, Halifax, Gander and St. John's.

However, these were replaced with nonstop routes: Vancouver-Sydney, Toronto-Munich, Toronto-Brussels, Toronto-Zürich, Vancouver-Zürich, Toronto-Vienna, Toronto-Delhi, Vancouver-Delhi, Toronto-Madrid, and Toronto-Mumbai.

At a presentation in the Toronto Airport hangar, Celine Dion helped the newly solvent airline debut its new image.

Aeroplan remained the frequent flyer rewards program, collecting miles which can be "spent", whereas status level is determined by Altitude standing.