I found a UK comsumer information website, stating the reason for Air Canada - Canadian Airlines merger.

<a href="http://www.competition-commission.org.uk/reports/443air.htm">http://www.competition-commission.org.uk/reports/443air.htm</a>

It said the airlines are merged due to Canadian Airlines' poor financial situaiton for years just before 2000, when the 2 airlines are merged, so to prevent the closure of some domestic service.

But this makes Air Canada the only Canada flag carrier, thus resulting high fares.

So it is better not to merge the 2 airlines, and the domestic services, as well as USA - Canada services, should be sold to Air Canada, to prevent the loss of domestic air services while maintaining competition on Canada international routes.