Canadian Airlines International Ltd. (stylized as Canadi›n Airlines or Canadi‹n Airlines, or simply Canadian) was a major Canadian airline that operated from 1987 until 2001. The airline was Canada's second largest airline after Air Canada, carrying more than 11.9 million passengers to over 160 destinations in 17 countries on five continents at its height in 1996. Canadian Airlines served 105 destinations in Canada, more than any other airline. It was a founding member of the Oneworld airline alliance. Canadian Airlines was headquartered in Calgary,"INVESTOR & FINANCIAL INFORMATION Overview." Canadian Airlines. March 2, 2000. Retrieved on September 7, 2017. "Canadian Airlines Corporation Airport Corporate Centre 1601 Airport Road NE, Suite 200 Calgary, Alberta T2E 6Z8""World Airline Directory." Flight International. p. 59. "Canadian Airlines International (CP)[...]#2800-700 2nd Street SW, Calgary, T2P 2W2, Alberta, Canada" and had revenue of approximately $3 billion at the end of 1999.
The airline and its aircraft were acquired by Air Canada in 2000, and the merger was officially completed on January 1, 2001.
History
Canadian Airlines International was the principal subsidiary of Canadian Airlines Corporation. The new airline was formed on March 27, 1987, when Pacific Western Airlines purchased Canadian Pacific Air Lines (also known as CP Air), which in turn had recently acquired Eastern Provincial Airways and Nordair.Canadian Airlines International Flight International January 4, 1987 page 4
In 1989, Canadian Airlines acquired Wardair, giving it access to new routes including long-sought-after routes to the UK and Europe. Its major hubs were at Montréal-Dorval International Airport (now known as Montréal-Pierre Elliott Trudeau International Airport), Toronto Pearson International Airport, Vancouver International Airport and Calgary International Airport.
After the 1991 airline industry slump, Canadian Airlines streamlined its operations and went through the financial restructuring of over $700 million in debt. It was further aided by an injection of cash from AMR Corp., the parent of American Airlines.
On November 1, 1996, Kevin Benson, then president and CEO, unveiled a restructuring strategy to improve the profitability of Canadian Airlines International. The operational restructuring plan was supposed to be phased in over a four-year period, addressing the main issues of cost control, revenue growth, capitalization and fleet renewal. It was also one of the founding members of the Oneworld airline alliance, along with American Airlines, British Airways, Cathay Pacific and Qantas. The plan started off well but with the effects of the 1997 Asian financial crisis, air traffic decreased and Canadian suffered heavy losses on previously profitable trans-Pacific routes.
Canadian Plus was the largest frequent flyer program in Canada with more than 60 airline, hotel, car rental, and financial partners worldwide. The program had more than three million members.
In its last few years of operation, Canadian Airlines extended its international route network in Asia, with the last being the addition of service to the Philippines, which gave it seven destinations in Asia. At that time Canadian Airlines had the distinction of flying to more places in Asia with more frequency than any other Canadian carrier.
Canadian Airlines' core business strategy focused on building its Vancouver hub into the leading gateway between North America and Asia. It leveraged its codesharing agreement with American Airlines in order to help capture a greater share of U.S.-Asia traffic flows.
Onex bid and Air Canada takeover
On August 20, 1999, Air Canada proposed a financial offer to Canadian Airlines which would see Canadian's international routes and airport slots sold to Air Canada for an undisclosed amount. Canadian Airlines would be relegated to be a regional carrier providing a feeder network to Air Canada. This offer was rejected. This financial offer evolved from a merger proposal between Canadian Airlines and Air Canada which had been ongoing since early 1999.
The proposed merger was backed by American Airlines, who had already owned a 25% stake in Canadian Airlines, the maximum allowed under Canadian foreign ownership restrictions. Then-American CEO Donald Carty, who had formerly headed Canadian predecessor Canadian Pacific Air Lines, planned to acquire a controlling interest in the enlarged Air Canada, with the purpose of moving it from the Star Alliance to Oneworld alliance. American Airlines was unsuccessfully lobbying Canadian federal government to ease foreign ownership restrictions on Canadian airlines. Afterwards, American sold its shares in Air Canada as the company decided to change its corporate strategy regarding the Canadian aviation market.
Four days later, on August 24, 1999, Onex Corporation announced a takeover bid for Canadian Airlines, backed by American Airlines's parent company AMR Corporation, consisting of $1.8B in cash and the assumption of $3.9B in debt. Canadian Airlines announced that it would support this and recommend acceptance from its shareholders. Air Canada rejected the offer. On August 31, 1999, Air Canada adopted a poison pill aimed at thwarting any takeover bid.
On October 19, 1999, Air Canada, backed by Star Alliance partners Lufthansa, United Airlines and CIBC announced a $930M counter bid to the Onex offer. Air Canada offered $92M for Canadian Airlines and committed to running it as a separate company. On November 2, Air Canada increased its offer to $16 per share to buy back 36.4 percent of the airline.
On November 5, 1999, a Quebec judge ruled that the Onex takeover was illegal, breaking the law that stipulates that no more than 10 percent of the company can be controlled by a single shareholder. Onex subsequently withdrew its offer and Air Canada stated it would proceed with the takeover of Canadian Airlines.
On December 4, the board of directors at Canadian Airlines recommended the $92M merger offer from Air Canada to the shareholders. The offer from Air Canada originally expired at 5pm on December 7, 1999, but Air Canada extended their offer until December 23, 1999. Air Canada officially took control of Canadian Airlines, pending government approval, on December 8, 1999. The Federal Competition Bureau cleared the way for the takeover on December 21, 1999, and Canadian Airlines officially became a subsidiary of Air Canada on December 23, 1999.
Canadian Airlines operated as a subsidiary company through most of 2000. In October 2000, all of Canadian Airlines' systems and employees became fully integrated. With both companies fully integrated, Air Canada began massive cuts to employees starting with the announcement that there would be 3500 cuts in the workforce on December 22, 2000. September 26, 2001 saw an additional 5000 cuts primarily driven from the worldwide impact to the travel sector caused by the 9/11 attacks.
At the time of merger, Canadian Airlines carried over 40% of the domestic share of passengers in Canada. Following the completion of the acquisition, Air Canada controlled over 90% of the domestic share of passengers, and dominated international and US-Canada transborder traffic.
Internet presence Canadian Airlines has the distinction of being the first airline in the world to have a website on the Internet (www.cdnair.ca). The website was launched in April 1994 and is recognized in the Canadian Internet Handbook 1994 and 1995 editions.
Destinations
This is a list of airports that Canadian Airlines International flew to during the 1980s and 1990s until its purchase.
Asia East Asia
Beijing - Beijing Capital International Airport Shanghai - Shanghai Hongqiao International Airport
Hong Kong International Airport (after 1998) Kai Tak Airport (terminated due to airport closure in 1998)
Nagoya - Nagoya Komaki Airport Tokyo - Narita International Airport
Taipei - Taoyuan International Airport
Southeast Asia
Kuala Lumpur Kuala Lumpur International Airport Subang International Airport (before 1998)
Manila - Ninoy Aquino International Airport
Changi Airport
Bangkok - Don Mueang International Airport
Europe Eastern Europe
Budapest - Budapest Ferenc Liszt International Airport
Moscow - Sheremetyevo International Airport
Northern Europe
Copenhagen - Copenhagen Airport
London Gatwick Airport Heathrow Airport Manchester - Manchester Airport
Southern Europe
Milan - Milan Malpensa Airport Rome - Rome Fiumicino Airport
Western Europe
Paris - Charles de Gaulle Airport
Frankfurt - Frankfurt Airport Munich Munich Airport Munich-Riem Airport (terminated due to airport closure)
Amsterdam - Amsterdam Airport Schiphol
Zurich - Zurich Airport
North America Canada Alberta Calgary - Calgary International Airport (hub) Edmonton Edmonton City Centre Airport (terminated due to airport closure) Edmonton International Airport Fort McMurray - Fort McMurray International Airport British Columbia Campbell River - Campbell River Airport Comox - Comox Airport Kamloops - Kamloops Airport Kelowna - Kelowna International Airport Nanaimo - Nanaimo Airport Penticton - Penticton Regional Airport Prince George - Prince George Airport Prince Rupert - Prince Rupert Airport Sandspit - Sandspit Airport Smithers - Smithers Airport Terrace - Northwest Regional Airport Terrace-Kitimat Vancouver - Vancouver International Airport (hub) Victoria - Victoria International Airport Manitoba Churchill - Churchill Airport Flin Flon - Flin Flon Airport Gillam - Gillam Airport The Pas - The Pas Airport Thompson - Thompson Airport Winnipeg - Winnipeg James Armstrong Richardson International Airport Newfoundland and Labrador Deer Lake - Deer Lake Regional Airport Gander - Gander International Airport Goose Bay - Goose Bay Airport Stephenville - Stephenville International Airport St. John's - St. John's International Airport Wabush - Wabush Airport New Brunswick Charlo - Charlo Airport Fredericton - Greater Fredericton Airport Moncton - Greater Moncton International Airport Saint John - Saint John Airport Northwest Territories Fort Smith - Fort Smith Airport Hay River - Hay River/Merlyn Carter Airport Inuvik - Inuvik (Mike Zubko) Airport Norman Wells - Norman Wells Airport Yellowknife - Yellowknife Airport Nova Scotia Halifax - Halifax Stanfield International Airport Sydney - JA Douglas McCurdy Sydney Airport Nunavut Cambridge Bay - Cambridge Bay Airport Iqaluit - Iqaluit Airport Nanisivik - Nanisivik Airport Rankin Inlet - Rankin Inlet Airport Resolute - Resolute Bay Airport Ontario Kingston - Kingston Norman Rogers Airport London - London International Airport Ottawa - Ottawa Macdonald–Cartier International Airport Sault Ste. Marie - Sault Ste. Marie Airport Sudbury - Sudbury Airport Sarnia - Sarnia Chris Hadfield Airport Thunder Bay - Thunder Bay International Airport Toronto - Toronto Pearson International Airport (hub) (Terminal 3) Windsor - Windsor Airport Quebec Bagotville - Bagotville Airport Baie-Comeau - Baie-Comeau Airport Kuujjuarapik - Kuujjuarapik Airport Kuujjuaq - Kuujjuaq Airport Montreal Montréal–Mirabel International Airport Montréal–Trudeau International Airport (hub) Radisson - La Grande Rivière Airport Sept-Îles - Sept-Îles Airport Val-d'Or - Val-d'Or Airport Saskatchewan Regina - Regina International Airport Saskatoon - John G. Diefenbaker International Airport Prince Edward Island Charlottetown - Charlottetown Airport Yukon Whitehorse - Whitehorse International Airport
Mexico Mexico City - Mexico City International Airport Monterrey - Monterrey International Airport Puerto Vallarta - Licenciado Gustavo Díaz Ordaz International Airport
United States Boston - Boston Logan International Airport Chicago - Chicago O'Hare International Airport Dallas/Fort Worth - Dallas/Fort Worth International Airport