Iqaluit to the GN: we want more airline competition
City will weigh in on the GN’s new airline procurement policy
Updated at 12:40 p.m.
The City of Iqaluit plans to weigh in on the Government of Nunavut’s airline procurement policy and its message will be clear: Nunavut—and specifically, Iqaluit—needs to attract more competition to its airline market.
The GN released a report earlier this year which made recommendations on how the territory should approach its airline contracts, recommending more central management and a single airline to serve each of the territory’s three regions.
Iqaluit city councillors voted Tuesday to tell the GN the city wants to see competition in the airline marketplace in Nunavut, particularly routes to and from its capital.
As part of that effort, the city will also promote itself as a “viable destination” to both national and international air carriers.
Councillor Kyle Sheppard, who brought the motion to council July 24, said the recent report’s suggestion that the GN contract one airline per region would have major consequences for Iqaluit.
“By including the Iqaluit-Ottawa route in this proposal it will kill any possibility of a new entrant to the market for at least the seven to nine years of the contract to be awarded,” he told council Tuesday evening.
The route should be considered its own segment in any future contract award, he said.
Sheppard’s comments come just weeks after the two major airlines that serve the commercial Iqaluit-Ottawa route, First Air and Canadian North, announced they intend to merge by the end of the year.
He said the report recommendations likely motivated the recent merger decision, which will create a monopoly on the territory’s busiest route.
However, both airlines disputed this assertion in a statement, saying that the government’s report “certainly supports our decision to merge First Air and Canadian North, but was not an influencing factor.”
“Rather, it serves as a valuable proof-point for what ownership on both sides have long-known: that northern communities would be better served by one air carrier operating a sustainable schedule.”
Charlie Watt, the president of Makivik Corp.—which owns First Air—re-initiated the airline merger talks earlier this year, saying the eastern Arctic is too big and remote to support two regional airlines.
Watt suggested Nunavut’s land claim organizations buy an ownership stake in the new airline as a way to keep airfare costs down.
But other northern Canadian routes serviced by national carriers like Air Canada and Westjet are able to provide the same service for between 50 and 75 per cent less than the cost of what Nunavummiut pay to fly south, Sheppard said.
In Nunavut, stakeholders have until the end of August 2018 to provide input on the GN’s airline procurement policy.
With that feedback, the GN will prepare a request for proposals to go out by November 2018, with plans to award the new medical and duty travel contracts by April 2019.