Airline bosses defend codeshare scheme against Inuit org’s complaints

Bert van der Stege, First Air’s vice-president commercial affairs, appears before the Qikiqtani Inuit Association Oct. 8 to defend the company’s codeshare plan with Canadian North. (PHOTO BY STEVE DUCHARME)

First Air and Canadian North executives made no apologies during a presentation of their controversial codeshare arrangement at the Qikiqtani Inuit Association annual general meeting Oct. 8 in Iqaluit.

“In order to provide sustainable air services to northern communities we’ve had to look for ways for improved efficiencies… At the end of the day, we run a business,” said Bert van der Stege, vice president of First Air’s commercial operations.

“Unfortunately, we do not provide a social service,” he said

The codeshare practice allows a ticket sold on one airline to be used on another airline

After merger talks between First Air and Canadian North collapsed in October 2014, the two money-losing airlines, along with Calm Air created the deal this past May.

The airlines have used the deal to run fewer routes to reduce operating costs.

But since then, the policy has produced a backlash from customers complaining of poor scheduling, bumped flights — even for medical patients— and lackluster or sometimes non-existent service to remote communities.

“I see a lot of people going to the airport, and then coming back because they can’t leave,” said the QIA community director for Iqaluit, Simon Nattaq,

Nattaq cited the Iqaluit-Rankin Inlet as an example of poor service related to codeshare.

“It’s good to have competition between businesses,” he continued.

First Air is owned by Nunavik’s Makivik Corp. Canadian North is owned by the Inuvialuit Regional Corp. through Norterra Inc. and Calm Air is owned by a publicly traded company called Exchange Income Corp.

Van der Stege defended the service offered by codeshare in Rankin Inlet, but said he would look into the “overall capacity offered by this route.”

Some critics allege the two main northern airlines are using codesharing to eliminate competition and fix prices.

But First Air’s boss denied that.

“There is still competition between First Air and Canadian North,” van der Stege said.

“This is a proven industry model that works everywhere else in the world.”

Loraine Bonner, the vice president of scheduled services for Canadian North, agreed with van der Stege.

“It was a necessary step to maintain business,” she said.

“Obviously this is of big importance when airlines are our only way of communication, so its definitely something that many Inuit are voicing to [QIA] members,” QIA President PJ Akeeagok said.

Van der Stege admitted there is an urgent need to inform customers about the “benefits and consequences of codesharing”.

The QIA also used the hearing to press for answers on rising costs to beneficiaries who ship country food by air.

The special country food freight rate is $1.50 per kilogram. But under the new policy, the now airline charges that rate per flight segment.

For example, if it takes three planes to ship cargo to Cape Dorset from Pond Inlet, the rate would be applied three times.

Board members said the new policy dramatically increases the cost for shipping country food.

“It is true that we’ve had to introduce some changes in the way we ship country food… primarily because of the unfair distribution of a flat rate,” said Van der Stege.

The airline, he explained, was incurring too many costs by shipping on a flat rate to communities requiring multiple changeovers.

“We have no highway, no roads between communities, we only have airplanes to travel by. It is causing a lot of hardship for our communities,” said Kimmirut’s community director, Tommy Akavak.

The airline partnership faced similar scrutiny at the Kitikmeot Inuit Association’s annual general meeting in Cambridge Bay held the same day.

The Government in Nunavut and the City of Iqaluit have already filed complaints to the federal Competition Bureau about the codeshare practice.

First Air and Canadian North are meeting with the GN this week to further explain their codesharing agreement.

The QIA wrapped up its 40th annual general meeting in Iqaluit Oct. 8.