Air Ceylon was established by the Ceylonese government in 1947 as a state-owned company, and in the same year two L-749 were ordered for use on an international route to London. The order was canceled and DC-4's leased from Australian National Airways operated the route from 1949 until 1953. Air Ceylon was initially operating scheduled domestic flights using Douglas C-47 Dakota aircraft. International services with Douglas DC-4s commenced in 1949, in a co-operation with Australian National Airways, which acquired a 49 percent stake in Air Ceylon. This partnership lasted until 1953, when it was replaced by new international co-operations: In 1956 with KLM, which included the lease of two Lockheed Constellation airliners for long-haul flights, and with BOAC in 1962, allowing the launch of flights to London using the de Havilland Comet.
Air Ceylon restarted its weekly Colombo to London service in February 1956 with a L-749A leased from KLM. The aircraft carried PH- registration but was fully painted in Air Ceylon's attractive livery. The L-749A was replaced by a KLM L-1049G in November 1958. The former PH- registration was replaced by a 4R- Ceylonese registration later that year. The Super Connie was in use until November 1960 when a leased KLM L-188 replaced it.
In 1965 with DH Comet aircraft Air Ceylon was ushered in to jet age, and started services to Cairo, Singapore, Male, Karachi, Bombay, Bangkok and Bahrain. Flight of BOAC Comet's and TWA Connies' had lead to a severe drop in Air Ceylon traffic.
Four years later came the HS Trident. Another jet aircraft came to service in 1972, Douglas DC-8. Well frequented Air Ceylon also increased its flights to European cities such as Zurich, Rome, Paris and Amsterdam. Rented to order the extended route network needs, the company briefly used aircraft such as Vickers VC-10, Convair CV-990 and Boeing B 707/720.
From the mid-1960s, the Hawker Siddeley HS 748 became the aircraft mainly used on Air Ceylon's short-haul routes, along with the Aérospatiale Nord N 262. When the construction of Bandaranaike International Airport was completed in 1967, Air Ceylon opened its hub there. In 1972, Union de Transports Aériens (UTA) became Air Ceylon's partner, introducing French-made aircraft into the fleet. UTA ended the partnership on 31 March 1977, leaving Air Ceylon without a European aide. In 1978, Air Ceylon was shut down by the Sri Lankan government due to bankruptcy, and Air Lanka became new national carrier. Air Ceylon was the flag carrier airline of Sri Lanka (known as Ceylon until 1972) from 1947 until 1978, when it was replaced by Air Lanka.
