Makivik pitches First Air to Nunavut
Airline sends emissaries to Baffin leaders’ summit to solicit support and investment
Makivik Corporation has sweetened an offer to share its airline empire with Nunavut beneficiaries, but most Baffin Inuit leaders are still cool to the idea.
Makivik Corp. first offered Nunavut beneficiaries the chance to buy into First Air when it purchased the company in 1991. But beneficiaries rejected the proposal, claiming the asking price for shares was too high.
“That offer is being opened again for Baffin and the rest of Nunavut,” Qikiqtani Inuit Association president Lazarus Arreak said this week.
Arreak, who sits on First Air’s board of directors, told delegates at a semi-annual Baffin leaders’ meeting in Pangnirtung last weekend, that Makivik Corp. has structured a new proposal.
“The numbers changed after the purchase of NWT Air and Ptarmigan Airways,” Arreak said, though he couldn’t elaborate on the specifics of the new offer.
In an open letter to the leaders’ summit, Makivik Corp. treasurer Peter Adams made it clear that the birthright development corporation of the Nunavik Inuit will seek some sort of partnership with regional Inuit associations in Nunavut.
“It is in all our interests to be dedicated to this cause,” Adams wrote.
Areeak said that a formal offer will be extended to the development arms of all three regional Inuit associations in Nunavut – Qikiqtaaluk Corporation, Sakku Corporation and Kitikmeot Corporation. Arreak said Nunasi Corporation could become involved, but only at the request of the regional bodies.
The offer comes at a time when the regional organizations have more access to financing than ever before.
First Air has grown rapidly under Makivik’s ownership, swallowing up two smaller regional airlines Ptarmigan Airways and NWT Air to become Canada’s third largest commerical air carrier. But it’s rumored to be in dire need of cash to refurbish its aging fleet.
“This action was taken to continue the goal of self-reliance,” Adams explained in his letter. He went on to say that the two smaller airlines would have been sold to outside interests or closed altogether, if Makivik and First Air had not stepped in.
Grateful, but still grumbling
Arreak told leaders that buying into the corporation would give Nunavut Inuit more say in the airline’s business policy.
“If we’re not part owners, then our concerns will not be felt as much,” he said. “Unless we become shareholders in the airline, we will not have as much impact.”
Broughton Island mayor Lootie Toomasie supported the idea and suggested that Nunavut land claim organizations consider the offer seriously.
But most other Baffin region mayors said they weren’t interested in the offer. Instead, they wanted to know why the meal service on flights to Hall Beach are cold and why it costs $4.42 to transport one kilogram of freight from Ottawa to Igloolik.
And, although grateful, they wouldn’t be wooed by the long list of First Air’s good works rhymed off by Arctic communities service manager Gilbert Normandeau. Normandeau said First Air spent more than $550,000 in sponsorships in the Baffin region last year.
Even schedule changes, such as the addition of non-stop direct flights to Pond Inlet and Clyde River three times a week, didn’t appear to sway delgates.
Baffin Central MLA Tommy Enuaraq, who represents Clyde River, Pangnirtung and Broughton Island, criticized First Air for continual rate increases.
Complaints common in communities
Enuaraq noted that recent scheduling changes on inter-community travel have forced him to overnight in Iqaluit when travelling from Clyde River to Pangnirtung.
“I even ran out of my travel fund by March and I had to wait to April 1 to travel to my constituency,” he said. “I generally have been giving $32,000 per year to First Air and that’s just essentially for the three central communities.”
They’re not new complaints. In fact, Normandeau said when he travelled to seven Baffin communities last year to meet with residents, high fares and flights restrictions were the most frequent criticisms.
Adams wrote the complaints come not only from the Northwest Territories, but from Nunavik as well.
“There are no other airlines to express dissatisfaction with since we’re the only ones making an effort to serve the region.”
Adams suggested these complaints may have been a reason why other carriers left the region.
And prices may jump even higher. Normandeau warned leaders of the consequences of government privatization of fuel distribution in the North.
“First Air believes the inevitable results of this will be higher fuel prices in the region,” Normandeau said.
More price hikes on the way
“Fuel represents a significant cost to First Air and any increases have to be passed on to our customers in the form of higher ticket fares and cargo rates.”
Commercialization of the air navigation system may also mean First Air clients will fork out more money for service. The system was operated by Transport Canada, but is now being delivered by a company called NavCanada.
Normandeau said a tax added to a passenger ticket partially funded the air-navigation system, with Transport Canada picking up the shortfall. But that tax will soon be eliminated, and airline will to have to pay for the service according to the weight of its aircraft and distance it travels.
“Because of the size of the region, the small number of passengers and the large volume of freight, the effect of this change will be quite significant.”
He urged the leaders to lobby against this change to protect residents from higher costs.