The Birth of Trans-Canada Air Lines

Prime Minister William Mackenzie King committed Canada to a new airline

Compared to the United States and Europe, commercial aviation got off to a very slow start in Canada. Despite its vast distances with limited road infrastructure prior to the Second World War that intuitively would have made for a favorable environment for the development of airlines, the really only serious effort was James Richardson's Canadian Airways established in 1927 in Winnipeg. But his airline was constantly in the red and depended heavily on air mail revenues to stay afloat. But Canadian Airways didn't have an extensive reach and wasn't all too different from the numerous bush pilot operations whose fortunes were tied to whatever industry they happened to be supporting- mining and trapping being the most common. There were two reasons for the lack of commercial aviation development in Canada in the interwar period- the first one was quite obviously the weather. Flying in those days was very much a risky endeavor in the harsh Canadian winters and secondly, Canada lacked an extensive aviation infrastructure. Lacking a network of airports, radio navigation aids and fleet of modern aircraft robust enough to deal with winter, nearly all the Canadian air mail had to go south and into the US transcontinental air network and then re-enter Canada at select points nearest their destination. For example, air mail out of and into the capital in Ottawa passed through New York City on Colonial Airways (which merged into Eastern Airlines in 1956) and air mail into and out of Vancouver passed via Seattle on United Air Lines flights. There were, however, two large competing railroads in Canada, Canadian Pacific (CPR) and Canadian National (CNR). The intense rivalry between CPR and CNR left little capital to the development of commercial aviation and this would leave Canada firmly in the age of rail, lagging behind the United States and Europe in commercial aviation development. During the Great Depression, Canadian Prime Minister R.B. Bennett created an unemployment relief project called the Trans Canada Airway that put thousands to work building an aviation infrastructure to allow coast-to-coast flights across the breadth of Canada. Work began in 1929 on airfields, radio navigation aids and weather reporting stations across the nation. However, Prime Minister Bennett's motivation wasn't for the development of commercial aviation but rather to use the Trans Canada Airway as a means of allowing the Royal Canadian Air Force to rapidly move its squadrons around the country and reinforce either coast in times of war. Succeeding Bennett as Prime Minister in October 1935, it was William Lyon Mackenzie King just a month after his election committed the government to starting a transcontinental airline to operate on the Trans Canada Airway. King wanted to be part of an Anglo-Canadian effort to create an around the world airline route before Pan American did so. 

C.D. Howe, the prime mover behind the formation of Trans-Canada Air Lines

King's first step was appointing Clarence Decatur Howe as the first "czar" to oversee all the railways, marine routes and canals and the beginning of air transport. Howe had the portfolios of two ministries as the Minister of Railways and Canals and the Minister of Marine. With intense efficiency, he put the Canadian National Railway on a sound financial footing and made it a crown corporation (government owned). As the only engineer in King's cabinet, he possessed technical know-how from his prior business careers that essentially transformed Canada from a primarily agriculture-based economy to an industrial economy. Howe was also an aviation enthusiasts and the only one in the Cabinet who had flown on an aircraft. He felt that aviation was destined to replace the railway as the main means of transport and communication across Canada. With the passage of the Department of Transport Act in 1936, Howe reformed Canada's transportation system under a new federal Department of Transport. He was keen to avoid what he thought was the wasteful rivalry between Canadian Pacific and the Canadian National Railways when it come to commercial aviation (which ironically Canada did end up with two airline rivals for years, CP Air and Air Canada). Now Canadian Pacific (CPR) had lost much of its political clout that hit had gained under successive Conservative governments. With Prime Minister King hailing from the Liberal Party, he did what he could to fight what he felt was CPR's stranglehold on transport in Canada. That left the Canadian National Railway (CNR) as the preferred vehicle for Howe's goals since he had already made it a crown corporation. It would have been logical for Howe and King to buy up all the small bush operators and amalgamate them into a new national airline, but the government had already done this 1918-1923 to form CNR and it proved to be a costly exercise that no one wanted to repeat with an airline. It also would have been easier to buy James Richardson out to get Canadian Airways, but King felt Richardson was too close to the previous administration and didn't trust him. And it was an open secret that Richardson's financial stewardship of Canadian Airways was rocky at best. Interestingly, Richardson thought he would be the instrument of Canadian commercial aviation and upon learning Howe favored Lockheed designs, set about ordering two Lockheed 10 Electras. 

Sir Edward Beatty, head of Canadian Pacific Railway

Because it was anticipated that starting a national airline would be costly, Howe proposed that both CNR and CPR buy equal shares in the new proposed airline. The airline would have a board of directors that were divided among the Department of Transport, CPR and CNR. Sir Edward Beatty, head of CPR, objected to this arrangement as he argued that the Department of Transport and CNR's directors were sharing the same interests which would leave CPR's portion of the directorship in a constant minority. While negotiations with Beatty continued, Howe announced on 26 November 1936 that a new airline would be granted a monopoly to operate on the Trans Canada Airway as a subsidiary of CNR. It wasn't important if the new airline made a profit- Howe saw the new airline as a public necessity much like the Canadian Broadcasting Corporation (CBC) he created that same year. If the new airline was making a profit, it was obviously charging its passengers too much! The airline would have guaranteed all year round service linking all of the major Canadian cities coast to coast. Howe had American airline personnel brought in to help get the new airline up and running. He had flown on US airlines and wanted to be sure that his new airline would be immediately on par in terms of safety, operations, and image as the ranking airlines in the United States. In February 1937 a bill was proposed in the House of Commons which established the proposed Trans-Canada Airlines as a CNR subsidiary. Hoping Sir Beatty and CPR would participate, 49% of the shares of the airline would made available for private investment. But even if CPR bought all 49% of the shares, it would still be in a minority position and he formally withdrew from the venture, leaving Prime Minister King to authorize Trans-Canada Airlines as a crown corporation with 51% of the airline owned by Canadian National Railway and 49% owned by the Department of Transport. The birth of Trans-Canada Air Lines came to be at 9:00pm on 10 April 1937 when the bill received its Royal Assent. 

CF-AZY takes off on Trans-Canada Air Lines' first revenue flight

By 30 July 1937, nearly all the radio beacons were operational along the airway and to publicize the completion of the airway, Howe arranged for his department's Lockheed 12A CF-CCT to fly across Canada from Montreal to Vancouver. To provide Trans-Canada Air Lines with start up capital, CNR borrowed $5 million from the Canadian Treasury. Since it was anticipated that 75% of Trans-Canada's revenues would come from air mail, the postmaster general would hold one of the seats on the airline's board of directors. The first president of the airline was S.J. Hungerford who was also the president of CNR. He would hold that position at the airline until 1941. For many years CNR was closely bound to the airline as a result of the arrangements of its formation. In fact, until 1974, the office of the secretary at Air Canada was the same person who held the office of secretary at CNR. Many of the new airline's first pilots came from various bush operators and many key personnel were recruited from Canadian Airways. In fact, the two Lockheed Electra 10As that James Richardson had purchased in anticipation of his airline being the "chosen instrument" were purchased by Trans-Canada Air Lines for radio calibration and training flights along the airway. One of these Electras, CF-AZY, was the aircraft to fly Trans-Canada Air Lines's inaugural air services on 1 September 1937 from Vancouver to Boeing Field in Seattle. The flight departed Vancouver at 5:00pm and arrived at Boeing Field at 5:50pm. Full daily services began on 17 October 1937 with the round trip fare between the two cities set at $14.20 (approximately $233 in today's dollars). Not only was it Trans-Canada's inaugural route, it was also its first international route and also its first route with competition with United offering Boeing 247 service between the two cities. Three more Lockheed 10As were purchased to join the two ex-Canadian Airways examples and these five Electras were known as the "Five Sisters". Trans-Canada was the first airline in North America to equip its aircraft with cargo hold smoke detectors and had oxygen masks in the cockpit as standard long before they were a mandated requirement. On 1 April 1939 the first transcontinental flights left simultaneously from Vancouver and Montreal headed for the other city. Keep in mind that Trans-Canada Air Lines was flew its first services in 1937, the same year the Trans Canada Airway was finished. And it was only 43 years earlier that Canada completed its transcontinental railroad! 

Source: Air Canada: The History by Peter Pigott. Dundurn Press, 2014, pp 12-35. Photos: Wikipedia, Toronto Star, Air Canada, Time Magazine.