An unregulated monopoly

More than 10 years ago, most Baffin and Nunavik residents had only one way of getting to the South.

And that was to fly on an airline called Nordair.

Many resented the monopoly that Nordair enjoyed on north-south routes. Many complained about poor service and high air fares and freight rates.

Now, after more than 10 years of airline deregulation, once again most Baffin and Nunavik residents have only one way of getting to the South.

And that is to fly on an airline called First Air.

Many resent the monopoly that First Air now enjoys. And many are again complaining about poor service, and high air fares and freight rates.

What happened to bring this about?

More than 10 years ago, the powers-that-be within the federal government’s Department of Transport offered us something that promised to end Nordair’s monopoly.

They called it “airline deregulation.” They said that airline deregulation would make it easier for airlines to offer new routes and new fares.

At that time, all Canadian airlines were required to submit complex applications to Transport Canada regulators whenever they wanted to offer new routes or new fares.

The airlines complained that these regulations, originally intended to protect consumers, prevented them from offering better fares and better services.

Consumers agreed. Like people elsewhere in Canada, Baffin and Nunavik residents wanted more choice and more competition between airlines, believing, understandably, that this would create lower fares and better service.

But, with a few exceptions, that didn’t happen. We’re now stuck with fewer airlines ­ and fares are at an all-time high.

How did this happen? Partly, it’s because of the airlines’ own greed.

As deregulation went into effect, Canada’s two major airlines started living beyond their means. Each borrowed heavily to finance the acquisition of smaller regional airlines.

One by one, Canada’s small regional airlines were gobbled up by either Air Canada or by Pacific Western Airlines­which eventually changed its name to Canadian Airlines. Only northern Canada’s First Air managed to stay independent­a unique achievement for the company’s managers.

After a series of mergers and other transactions, the company we used to call Nordair ended up in the hands of PWA and then Canadian, which continued to offer the same north-south jet service.

Meanwhile, First Air took advantage of the new rules to begin its own north-south jet service, in direct competition with Canadian.

And for a while, we had what we’d hoped for ­ competition, better service and seat sales galore.

In the end, however, the bubble burst. The spending spree that Air Canada and Canadian went on carried a big price ­ the huge debt load that they had to assume in order to finance the purchase of all those small regional airlines. Airline passengers in Canada are now helping to pay for that debt load in unreasonably high air fares and freight rates.

Canadian Airlines’ debt grew so large it almost collapsed. To survive, the airline began to cut back on services, especially in eastern Canada. To cut costs, they withdrew from regional markets, including those in the Baffin and northern Quebec.

As a result, we’re stuck with a monopoly. This time, an unregulated monopoly.

It’s not realistic to expect that airline deregulation will be rolled back. Nor is that idea even desirable, since it has created real benefits for us by encouraging competition on local routes from smaller companies, such as Air Nunavut and Kenn Borek.

But First Air has the north-south market to itself, and without competition, the normal discipline needed to protect consumers isn’t there. Only the power of public opinion can provide that discipline.

That means you. If you’ve been subjected to shoddy service, if you’ve been summarily bumped from a flight, or if you’ve been overcharged for a ticket, make sure you complain about it­loudly.