Decision to end joint venture took First Air by surprise: VP

A First Air ATR parked at the Whale Cove airport in 2013. (PHOTO BY SARAH ROGERS)

Officials at First Air were “surprised” to receive notice last week that one of its joint venture partners, Sakku Investments Corp., decided to end its relationship with the airline, Bert van der Stege, First Air’s vice president, commercial, said Sept. 5.

First Air and Sakku, the business arm of the Kivalliq Inuit Association, launched Sakku First Aviation Ltd. in 2010, as a joint venture headquartered in Rankin Inlet.

But on Sept. 5, Sakku announced it had dropped First Air and entered into an agreement with Exchange Income Corp. and its subsidiaries Calm Air and Keewatin Air.

“They must have had a good reason,” van der Stege said. “We have very much enjoyed working with Sakku, and we hope to amicably meet with them soon to end the relationship.”

Sakku came to First Air in 2013 with a proposal to build a new hangar in Rankin Inlet, which is currently under construction.

Although there was no formal agreement in place, it was understood that First Air would likely lease the facility.

But Sakku later told First Air that the costs to build the hangar were higher than expected, and that the corporation had another party willing to pay more to lease the space.

Van der Stege said that two days before its Sept. 5 announcement, Sakku informed the airline it had found a new tenant to lease a hangar: Calm Air.

And that’s just one example of infrastructure under the new agreement that Calm Air hopes to benefit from in order to expand its operations in the Kivalliq region, the Exchange Income Corp. said last week.

Sakku’s president and chief executive officer, Patrick Tagoona, told Nunatsiaq News that the goal of its new joint venture is to better serve residents of the Kivalliq region.

Tagoona also said Sakku wasn’t happy with First Air’s recent announcement that it planned to end air service to Repulse Bay (Naujaat.)

But van der Stege said that decision was communicated to First Air’s stakeholders some time ago.

“Tagoona knew about our decision to end service to Repulse months ago,” he said.

The Makivik Corp.-owned airline’s decision to cut the Repulse Bay route was a difficult one, he added.

“We don’t take those decisions lightly,” van der Stege said. “But the decision to cut that route will impact us positively in the long run.”

The aircraft that flew to Repulse Bay will now be freed up to serve other Nunavut communities, he said — namely First Air’s routes to Arctic Bay, Resolute Bay and Pangnirtung.

First Air will maintain its relationship with the Qikiqtaaluk Corp. in the Baffin region, he added, under their joint venture, Qikiqtani First Aviation Ltd.