'They should have done more to hire local agents who know the market'

After losing millions of dollars last summer, Air Greenland has pulled the plug on its non-stop jet service to North America.

After First Air ended its weekly service from Iqaluit to Kangerlussuaq in October 2001, Air Greenland's flights from Kangerlussuaq to Baltimore, Maryland offered the only non-stop, scheduled jet service between Greenland and North America.

But Air Greenland announced earlier this month that it was canceling the 3,485-kilometre flights from Kangerlussuaq to Baltimore-Washington International after the route lost more than $3 million dollars during its first year.

Midway through last summer, there were so few passengers booked to travel on Air Greenland's cherry-red, 200-seat Boeing 757 that the airline ended up renting a smaller jet.

Kenn Harper, the honorary consul for Denmark in Iqaluit, said he's not surprised the Kangerlussuaq-Baltimore route folded, but he still thinks there is a demand for a regular air service between Greenland and Canada.

Harper said the key is not to use a jet, but a much smaller aircraft, similar to the Hawker Siddley 748 that offered regular service between Iqaluit and Nuuk for 13 years during the 1980s and early 1990s.

A flight originating in Nuuk could connect passengers with south-bound jet service out of Iqaluit, Harper suggested.

"Starting up this route again will require some marketing dollars and some imagination, a proper schedule and the right type of aircraft," he said. "I don't care who starts the service as long as there's service."

Harper said he's already received murmurs of interest from Air Greenland, Canadian North and First Air.

"All of them are extremely cautious," he said. "We interested parties have to keep reminding these people that there are two countries with no link between them, some commonality of interest, and an abandoned route that used to work."

The five-hour flights were to resume June 26 and continue to Aug. 28.

This schedule was set before Air Greenland determined it had lost 15.1 million krøner (more than $3 million) on the route in 2007.

The amount of the loss is "unacceptable," the airline's chief executive officer, Michael Binzer, told the Greenland public broadcaster KNR.

Binzer said Air Greenland cannot afford to continue another year of flying to North America.

Preliminary figures for 2008 showed that losses could triple due to increased fuel and aircraft rental costs, coupled with a falling demand for foreign travel in the U.S.

Air Greenland now plans to concentrate on competing with SAS and Icelandair, airlines that also offer connections to Greenland.

Air Greenland's cancellation of 10 flights planned for this coming summer affects only 170 bookings.

But travel industry insiders say shutting down the only direct route between the U.S. and Greenland after only one year of operation is a mistake.

"They should have done more to hire local agents who know the market," Jens Sondrup of Toronto's Valhalla Travel and Tours told Greenland's Sermitsiaq newspaper. "They should also have taken a more long-term view."

Meanwhile, the government in Greenland is said to be mulling over some form of joint venture with Air Greenland, which is now partially owned by the government, or possibly with another airline company willing to fly between Greenland and the U.S..

Lars Emil Johansen, a Greenlandic MP, said he was frustrated over the cancellation because of Greenland's growing links with U.S, companies, such as the aluminum giant Alcoa, which plans to build a huge smelter near Maniitsoq.

Air Greenland passengers are also feeling fall-out from the Greenland-U.S. flights.

Due to the loss racked up by the cancelled route to the U.S., tickets for travel between the southern Greenlandic community of Narsarsuaq and Copenhagen will rise by more than 30 per cent April 2.

The fare increases are designed to prevent the Narsarsuaq airport – one of Greenland's main airports – from closing during the winter months, Air Greenland said in a news release.

"The route has a limited passenger base and flights often experience expensive cancellations, delays or rerouting due to weather conditions in Narsarsuaq," Air Greenland said.