Arctic airlines First Air and Canadian North talk merger

Nunavut’s two major airlines, whose aircraft are seen here on the tarmac in Rankin Inlet, may stop competing with each other and form a single entity, Makivik Corp. and Norterra Inc. announced April 11. (FILE PHOTO)

Nunavut’s airline industry may be on the verge of getting a little smaller.

Nunavik’s Makivik Corp. and Norterra Inc. — owners, respectively, of First Air and Canadian North — confirmed April 11 that they are in talks aimed at merging the two airlines.

In a joint release, Makivik and Norterra said a merger “would improve the sustainability of these critical Inuit birthright enterprises and would also create better air services and new economic development opportunities across the north.”

The news comes on the heels of a deal struck earlier this month in which Inuit-owned Nunasi Corp. sold its 50 per cent stake in Norterra to the Inuvialuit Development Corp., which owned the other half.

The new airline would be owned equally, say its potential shareholders via a newly-created website called www.newnorthernairline.com.

But it won’t happen any time soon. The merger depends on the completion of negotiations and a federal regulatory review, which could take months.

Peter McCart, Canadian North’s vice-president of marketing and communications, said the process would likely take the airlines until the end of 2014 to complete.

In the meantime, First Air and Canadian North will continue to operate independently, with no changes to service.

Should the merger go forward, Canadian North and First Air employees would join the newly-formed airline, at which point its management would begin “working together to decide how and what we integrate.”

“Overall, we expect the new airline will become greater than the sum of its parts, creating more job opportunities over the long term,” said a statement on the shareholders’ new website.

“We spent the day speaking with our employees and unions, and they’re very optimistic about this,” McCart said. “We think this would provide powerful benefits to our customers and employees.”

This isn’t the first time Norterra and Makivik have discussed a potential merger.

In early 2011, rumours were swirling that the two were discussing a merger or purchase. Later that fall, Makivik’s board of directors issued a statement, confirming “its decision to retain full ownership of this important investment.”

Makivik, the birthright organization for Nunavik Inuit beneficiaries of the James Bay land claims agreement (which has also used the spelling Makivvik), has owned First Air since 1990 and operated it as a wholly-owned subsidiary.

The firm now employs more than 1,000 people, about 450 of whom live in northern Canada.

Norterra began operating Canadian North in the late 1990s after Canadian Airlines International Ltd., the short-lived national carrier, became insolvent and ended up being swallowed up by Air Canada.

Canadian North inherited Canadian Airlines’ northern assets, many of which had been previously operated by Nordair in the 1970s and 1980s.