Not enough: Nunavut premier wants more answers from airlines
Peter Taptuna picks apart hearing transcript, calls for explanations
Nunavut’s premier is demanding more answers from the territory’s three codesharing airlines — First Air, Canadian North and Calm Air — following a full caucus hearing at Nunavut’s Legislative Assembly this January.
In a letter addressed to the presidents of the three airlines, Premier Peter Taptuna says more explanation is needed to defend the crippling cost of air service in Nunavut.
“I will not get into detail of every question asked and every answer given and in some cases non-answers that were given,” Taptuna wrote in the letter, which was tabled at Nunavut’s legislature March 10.
“Airline travel in Nunavut is not a luxury, it is a necessity… You transport the food we have to eat, you move the goods we buy and the products we need. Airlines are truly the lifeline of Nunavut.”
Calm Air President Gary Bell told MLAs at the full caucus hearing that codesharing was the only option available for his airline after the Government of Nunavut split its medical travel contract in 2011.
Bell said the airline lost $8 million in 2013 and 2014, prior to the codeshare announcement.
“Unfortunately, the decision to do that made those two carriers in that region uneconomical,” Bell said at the codesharing hearing Jan. 26.
“Splitting that main contract that we rely on required us to examine every single one of our expense lines.”
But Taptuna said Bell’s explanation is disingenuous. He said Calm Air is effectively running a monopoly in the Kivalliq, after sub-contracting Canadian North’s medical share.
“As of today, you will now get 100 per cent of that market, as First Air has pulled out as a result of the codeshare. Thus, your airline should return to profitability,” he wrote.
The premier seemed willing to concede that Nutrition North has hurt the airlines, but said he remains hopeful for changes to the program under the new Trudeau government.
“Was it, or is it, just a coincidence, that Nutrition North replacing the old Food Mail Program [was] the beginning of operating losses of the northern airlines?” he said.
But any speculation, he conceded, would have to remain just that, as the airlines have never provided the GN with their financial statements.
“We can only assume that the decreases in your profits and your viability is also tied to the Nutrition North Canada program, which everyone agrees is flawed and needs to be fixed,” Taptuna wrote.
Under the old Food Mail subsidy program, First Air held a virtual freight monopoly on food freight in Nunavut. When Nutrition North was introduced, Canadian North got a piece of the pie, meaning First Air likely took a financial hit.
Under Nutrition North, the airlines compete with each other on price to get food freight business from retailers like Arctic Co-operatives Ltd. and the North West Co., which has likely reduced their revenues.
Taptuna ended his letter reminding the airlines about commitments made at the hearing to review controversial policies on the availability of lower cost airfare seats.
And the decision by some airlines to charge “per leg” for transporting freight puts the delivery of country food out of reach for many Nunavummiut, he added.
“We will leave it to your staff to review the transcript [of the hearing] and respond expediently and directly on those and other concerns.”
The facts defending codesharing simply don’t add up, said Taptuna.
He wrote that the past few years don’t mesh with the 158 years of combined history of the three airlines — which operated successfully for most of their existence.
“This is really the question that needs to be answered,” he wrote.
“All we basically heard was that the codeshare was good, give it time, you [Nunavut customers] don’t worry, and monopolies are good, and competition bad.”
The Nunavut legislative assembly ended its winter sitting March 16, and will reconvene for the spring session May 20.
That short sitting is expect to last only until June 8.