Nunatsiaq News
NEWS: Around the Arctic September 28, 2018 - 6:20 pm

First Air, Canadian North ink deal to create one northern airline

"We wanted to own our airspace over the Canadian Arctic, and now we do"

SARAH ROGERS
From left, First Air chairperson Johnny Adams, Inuvialuit Regional Corp. chair Duane Smith, and Makivik Corp. President Charlie Watt, in Montreal on Sept. 28, signing an agreement to merge First Air and Canadian North into one pan-Arctic airline. (PHOTO COURTESY OF MAKIVIK)
From left, First Air chairperson Johnny Adams, Inuvialuit Regional Corp. chair Duane Smith, and Makivik Corp. President Charlie Watt, in Montreal on Sept. 28, signing an agreement to merge First Air and Canadian North into one pan-Arctic airline. (PHOTO COURTESY OF MAKIVIK)

Two of the country’s largest Inuit-owned airlines will become one, following a deal made official on Friday, Sept. 28.

Nunavik’s Makivik Corp., which owns First Air, and the Inuvialuit Regional Corp., owner of Canadian North, signed an agreement at Makivik’s Montreal office Friday afternoon, calling it the creation of one “premier northern airline.”

“It’s been a long time coming,” said Makivik President Charlie Watt, who would have overseen Makivik’s purchase of First Air in 1990.

“It has become a reality. We wanted to own our airspace over the Canadian Arctic, and now we do.”

Duane Smith, chair and CEO of the Inuvialuit Regional Corp., called the new deal a “tremendous step towards growing the economic strength of Inuit and Inuvialuit.”

First Air and Canadian North announced this past July that they had struck an agreement-in-principle to merge.

Makivik started the talks under the new direction of Watt, following his election as president of the Nunavik land-claim organization earlier this year.

The new airline is set to operate under Canadian North’s name, while using First Air’s livery, and would be headquartered in Ottawa.

The transaction to create the new airline is expected to be complete by the end of 2018; in the meantime, the two airlines will continue to operate independently.

The new venture has yet to announce details on how routes, schedules and staffing will be affected by the merger, but the partners are already pledging “better time-of-day options and better connectivity.”

Watt said the airlines are also in discussion with a Baffin-based Inuit organization to join the partnership, so Nunavut could get a stake in the new venture.

For now, the agreement completes years of negotiations aimed at a merger between the two airlines.

In 2014, Makivik and the company that then owned Canadian North, Norterra, spent seven months negotiating a merger of the two airlines, but were unable to reach a deal.

Afterwards, in mid-2015, the two companies struck a code-sharing agreement, which allowed the airlines to share routes. After much public criticism over overbooked flights, poor schedules and waylaid cargo, First Air cancelled this agreement in late 2016.

Watt said the success of this round of negotiations was thanks to the Inuit birthright organization leaders meeting face-to-face, with a common goal of benefiting Inuit Nunangat.

“There is only room for one airline in the North,” Watt said. “Let us, as a people, carry this and do what we can to improve the northern economy.”

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(13) Comments:

#1. Posted by Northern Inuit on September 28, 2018

F&$*

#2. Posted by Customer on September 28, 2018

But the important question will be will prices go down??  I call bs cause they won’t and it will be SNAFU all over again….

#3. Posted by Another Customer on September 28, 2018

This thing is Win-Win for the two airlines and Lose-Lose for everybody else. This is what will happen.

1. Monopoly Air gets guaranteed profits no matter how badly they serve their customers

2. Monopoly Air can charge whatever outrageous prices they want.

3. Monopoly Air’s customers, even the governments, lose all their bargaining power.

4. The biggest one of them all is Monopoly Air’s board members will get juicy bonuses for the rest of their lives.

I hope WestJet and Air Canada come in and cherrypick the hell out of the Iqaluit—Ottawa and YK-Edmonton routes through undercutting the outrageous prices these clowns are going to charge.

The only other hope is the Competition Bureau investigates and tells them they are not allowed to do this.

#4. Posted by Nunavummiuq on September 29, 2018

I wonder if it’s going to raise airfare. I also don’t want to fly in Canadian North aircraft because I know their fleet is older and prone to maintenance issues. I want to be able to discern the difference between a First Air plane and a Canadian North plane, but it looks like that won’t be able to happen if the Canadian North planes are labelled with First Air livery.

#5. Posted by Get your own way, as usual on September 29, 2018

It’s not what “we” wanted; it’s what Mr. President wanted.

#6. Posted by george on September 30, 2018

Think clearly…why would this merger reduce pricing? This just monopolizes an existing monopoly. Any saving will simply go into the coffers of the one airline. Anyways this is not a Nunavut based industry as this is predominantly weighted towards Nunavik.

#7. Posted by The Old Trapper on September 30, 2018

The airline industry is all about efficiency and scale. If an airline operates 60% full it must charge more than if it operates 80% full. If you have 1 737 you need a spare engine, if you have 5 737s you can also have 1 spare engine. If you have two companies each needs their own ground equipment, forklifts, baggage carts, warehouses, etc., merge the airlines and you reduce some costs by half, and double the volume. Efficiencies and economies of scale go from the top to bottom of the two companies.

And yes governments and some businesses may pay more. The GN is the biggest customer, but they are also the most demanding, wanting top end service (dedicated reservations agents, late booking, changes or refunds without penalty), all at rock bottom prices. Likewise Northern and ACL when it comes to freight services.

The Nunavut RIAs need to get on board as owners, that’s how you get input into service levels, sustainable profits,and consumer prices.

#8. Posted by Northern Monopoly on September 30, 2018

You don’t make a boat with two submarines

#9. Posted by Burney Winters on September 30, 2018

This is so great to see and read, Now maybe they can look after alot of the theft that happens at the YZF cargo location, that of two full-time employees. And they all know whom they are, one coordinator, and one night shiftier.  Good luck!

#10. Posted by Air Traveler on October 01, 2018

WERE SCREWED

#11. Posted by Free on October 01, 2018

Why would the merger reduce prices?  Would prices go down?


Most definitely prices would go down…

This happens far too often… maybe particularly on Tuesday, Wednesday and Thursday… FLIGHTS WITH 1 or 2 PASSENGERS!  No wonder tickets are expensive… those two passengers have to pay for everything…  By distributing the cost of operation over more customers, they can now reduce the cost per ticket…

#12. Posted by Travel on October 01, 2018

First Air and Canadian north got Married, wonder in the future Air Inuit will become second wife. Hehe…;).

#13. Posted by Buiness dumb dumb on October 03, 2018

What will Canada do to protect the consumers? What will NWT, NU, Qc and YK governments do to regulate this monopoly?

The mention of a NU Inuit org joining up is something to watch for. Ahhh what a day to be a part of an ethnic organization.

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