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Air Canada: A hostile merger?

When Air Canada first took flight in 1937, the sky was the limit for the country's new national airline. Originally known as Trans-Canada Airlines, the fledgling company enjoyed a virtual monopoly in the skies. But the post-Second World War economic boom ushered in a new Canadian jet set, eager to take advantage of new airlines that offered cheaper fares. In the decades since, the embattled airline would have to endure runaway inflation, a fuel crisis, a controversial merger, and a near-fatal brush with bankruptcy before its fortunes would rise again.

It's 1999 and Air Canada and Canadian Airlines are one step closer to a merger. The idea to join forces comes after a streak of bad luck for Air Canada: a mid-1970s recession and rising costs due to a global fuel crisis. By 1979 the federal government had lifted all protection rules for Air Canada, paving the way for new airlines like CP Air. Before the government lifted protection laws, Air Canada took Canadians on 78 per cent of their flights within the country.

In this 1999 CBC Television clip, business magnate Gerald Schwartz revels in news of a court ruling in his favour. Ontario justice Robert Blair gives Schwartz the go-ahead to ask for a merger vote between Air Canada's shareholders and Canadian Airlines. But Air Canada's top brass is generally not in favour of what they view as a hostile merger attempt by shareholders of Schwartz's company Onex Corp. 
. On Nov. 5, 1999, Onex's bid to buy out Air Canada and merge the airline with Canadian Airlines was shut down. A Quebec Superior Court ruled the buyout illegal — no one entity was allowed to own over 10 per cent of Air Canada.
. In 2000, Air Canada successfully merged with Canadian Airlines without Onex's involvement.
Medium: Television
Program: The National
Broadcast Date: Sept. 28, 1999
Guest(s): Nigel Wright
Host: Peter Mansbridge
Reporter: Susan Bonner
Duration: 2:24

Last updated: January 26, 2012

Page consulted on May 16, 2013

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