In December 1919, the remnants of the wartime Australian Flying Corps (AFC) were disbanded, and replaced on 1 January 1920 by the Australian Air Corps (AAC), which was, like the AFC, part of the Australian Army. Australia's senior airman, Lieutenant Colonel Richard Williams, was overseas, and Major William Anderson was appointed commander of the AAC, a position that also put him in charge of the Central Flying School (CFS) at Point Cook, Victoria As Anderson was on sick leave at the time of the appointment, Major Rolf Brown temporarily assumed command; Anderson took over on 19 February. CFS remained the AAC's sole unit, and Point Cook its only air base.
The AAC was an interim organisation intended to exist until the establishment of a permanent Australian air service. The decision to create such a service had been made in January 1919, amid competing proposals by the Army and the Royal Australian Navy for separate forces under their respective jurisdictions. Budgetary constraints and arguments over administration and control led to ongoing delays in the formation of an independent air force.
By direction of the Chief of the General Staff, Major General Gordon Legge, in November 1919, the AAC's prime purpose was to ensure existing aviation assets were maintained; Legge later added that it should also perform suitable tasks such as surveying air routes. The Chief of the Naval Staff, Rear Admiral Sir Percy Grant, objected to the AAC's being under Army control, and argued that an air board should be formed to oversee the AAC and the proposed Australian air force. A temporary air board first met on 29 January 1920, the Army being represented by Williams and Brigadier General Thomas Blamey, and the Navy by Captain Wilfred Nunn and Lieutenant Colonel Stanley Goble, a former member of Britain's Royal Naval Air Service (RNAS) then seconded to the Navy Office. Williams was given responsibility for administering the AAC on behalf of the board. A permanent Air Board overseen by an Air Council was formed on 9 November 1920; these bodies were made responsible for administering the AAC from 22 November.