Airline officials meet with stakeholders to quell merger concerns

Canadian North, First Air officials warn employees to expect job losses

The newly merged airline presented its new look in Iqaluit last week: Canadian North’s name and First Air’s livery. (Photo by Brian Tattuinee)

By Sarah Rogers

Officials from Canadian North and First Air say customers can expect to see the two companies, which are now in the process of merging, branded as one by the end of the year.

Transport Canada approved the merger last month, subject to a list of conditions. The two airlines signed off on the transaction July 10.

Since then, airline officials have launched an informal series of town hall meetings with stakeholders along its travel routes, stopping in Iqaluit July 23 to meet at the Frobisher Inn with clients and community organizations.

The new airline’s incoming CEO and president, Chris Avery, says the process of merging is long and complicated, but the airline is aiming to keep its employees and customers up to date as much as possible.

“We’ve definitely heard concerns about the schedule and the capacity,” Avery said. “And we’ve definitely heard concerns about pricing.

“What we’ve told them is that, our intent has always been about providing that service,” he said.

“Our ownership group is 100 per cent Inuit, and their direction is not about cutting services or raising fares. The merger is about providing the best customer service as possible, and keeping prices as low as possible.”

While the administrative transaction required to fully merge the two airlines could take up to two years, Avery says the airlines plan to have a joint reservation system up by the end of 2019, so the new airline—which will take the name Canadian North—will be presented as one brand.

The estimated 18 to 24 months needed to complete the merger is more administrative and “behind the scenes,” he said.

Up until now, the new airline hasn’t said much about the impact the merger will have on its workforce—an estimated 700 employees with Canadian North and 800 with First Air.

“We realize that causes some uncertainties for our employees,” Avery said. “[This merger] is about gaining efficiencies, so there will be some job losses.”

Avery hopes much of that can happen through attrition or a voluntary separation program. In any case, the new airline said it intends to prioritize northern and Inuit jobs.

New airline in talks with Qikiqtaaluk Corp.

With the new airline jointly run by Nunavik Inuit and Inuvialuit-owned corporations, Nunavut does not have its own stake in the new venture—at least not yet.

Owners Makivik Corp. and the Inuvialuit Regional Corp. are in “active conversation” with the Qikiqtani Inuit Association’s Qikiqtaaluk Corp. about buying an equity stake and having representation on the new airline’s board of directors, Avery said.

Those discussions are also happening with the Kitikmeot Inuit Association.

Canadian North and First Air have made separate bids for the Government of Nunavut’s new medical and duty travel contracts, which include a new public travel component.

The new set of contracts are expected to be announced any time now, though Avery wouldn’t speculate on how the merged airline would deliver on it.

“We’ve both put in submissions, that we’ll obviously honour,” he said. “And we hope we’ll be successful.”

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(17) Comments:

  1. Posted by ex employee on

    “there will be job losses”… Senior executives will get ridiculous exit packages and employees who heavily rely on the income will get a minimal package if any…

    • Posted by The Old Trapper on

      Actually many of the redundant positions will be unionized so compensation will be per the collective agreements.

      Yes other positions will also be redundant but airlines operate under federal labour laws so all appropriate notice periods will be followed.

      Will some senior executives get buyouts? Probably, that is the way that businesses in Canada operate.

      It’s not ideal but do you need two different sets of ticket agents, or baggage handlers when one set will do? Same with accounting clerks, stores departments, and even pilots & flight attendants.

      Or would you prefer to pay more for your ticket just so the merged airline can keep twice as many people as they need?

      • Posted by Consistency on

        so what your saying is right now the ticket prices reflect the cost of business which has more employees then needed (therefor the said need of the merger), so if they kept duplicates of each job the prices would be double what they need to be… since right now we have two airlines therefor double what is needed, when they make the cuts the ticket prices should also go down?… well i dont believable that

      • Posted by ex employee on

        What i’m saying is that the executives will get higher buy outs/compensation packages to allow them to live a few years comfortably. easy. then you have the real staff that actually make things happen get next to nothing compared. ununionized employees will be subject to the companies “generosity”. Really, small guys should be getting good attention. Unions will do their work but the companies will fight them to the death. Both companies make TONS of money, they just want to make more.

        • Posted by Jack on

          They made tons of money….really. I don’t think so. Where did you get that information from. Oh you guessed..ok

  2. Posted by Nunavutmiut on

    The GN should purchase our own airline,for the Nunavutmiut, only them can afford to go on vacations. Call it the Nunavumuit Air or Air Nunavutmiut.

    • Posted by Traveling NTI card holder on

      How about NTI not GN?
      We need our own airline in Nunavut and get rid first air and Canadian north because they are owned by other land claims groups and we should do the same instead all the money going else where simple as that!

      • Posted by The Old Trapper on

        Yeah this is something that I’ve heard for the last 20 years.

        First Air is owned by Makivik and they are the “wrong” Inuit.

        Canadian North is owned by IRC and they are the “wrong” Inuit.

        You do know that both groups have offered all three of the Nunavut RIAs sweetheart equity deals in the past, not once but multiple times? Hopefully this time the RIAs are smart enough to accept since it will be one merged airline and not two competing airlines, but you never know.

    • Posted by The Old Trapper on

      Actually the GN/NTI or the RIAs should buy a stake in the merged airline. Having too many airlines is why the airlines had to merge in the first place.

      For those that don’t know the GN has actually been one of the problems. They have always tried to divide up the medical and government travel contracts to foster “competition”.

      They have also demanded first class service levels (their own medical travel contacts, fully refundable tickets, large baggage allowances, hot meals etc., but use the lowest price as their main criteria for selection.

      The problem with “competition” is that the markets are all too small to support two airlines so both airlines would encounter losses on most markets.

      You’ll remember that Nunasi/Norterra sold their stake in Canadian North to IRC as they couldn’t afford to keep subsidizing the losses. First Air also had a few years of losses until they cut back their schedule and entered into the first codeshare.

      A new GN or NTI airline makes no economic sense whatsoever.

      • Posted by Jack on

        Aha someone who understands the economies of the north. Well said

  3. Posted by Gobble Gobble on

    I’d just like to bring up a quote from my comment on the February 26, 2019 article, “Arctic airline merger would raise prices, reduce service, says Competition Bureau”.
    The quote,
    “So much trash from the airlines… You talk about overlapping routes, so I assume you’ll cut routes in a merger, meaning less flexibility for flights and cargo. Cutting routes means fewer employment hours. Merging baggage and cargo handling means fewer employment hours. Fewer jobs.”
    Nobody can say this wasn’t expected.

    • Posted by The Old Trapper on

      You have to consider that two competing airlines are not economically viable in the small Nunavut markets, especially with the largest customers 1) GN, 2) Northern, and 3) ACL constantly playing each airline against the other to get the lowest possible price.

      Look just at northern infrastructure needed, staff, counter space, trucks, baggage carts, de-icing machines, etc. All of this can be cut in half, savings are not all going to be immediate but they will come.

      Aviation is capitol intensive, just in aircraft and spares that will be reduced, never mind in staff, equipment, computer programs, etc. Savings will be in the millions per year.

      Last, travel peaks on Monday & Friday. Now I haven’t looked at the schedules lately but both carriers used to have daily flights YOW-YFB leaving within minutes of each other due to inbound./outbound connections.

      With one airline you can cut that down to 2 flights M/F, but one in the morning and one in the evening, and one flight on other days. What was 14 flights becomes 9 flights, all with better load factors.

      The airlines saves the cost of 5 flights but still makes the same revenue. A win for the airline (same revenue/lower cost), and a win for the customer (better schedule/lower fares).

      • Posted by Gobble Gobble on

        I’ll respond to your claim that the competing airlines are not economically viable with another one of my quotes from the same article. The quote:
        How about this Jobie Tukkiapik quote from October 2017: “Due to solid returns from our financial portfolio, which resulted in a $3-million dividend from First Air, and a $2-million dividend from Air Inuit, we are proud to once again be in a position to allocate funds to all communities”.
        “Solid returns” sounds pretty economically viable to me.

  4. Posted by Consistency on

    So both First Air and Canadian put in for the medical travel and if/when one of them is given it the merged company will honor it….well isnt that nice… other then they knew this merger was happening before they submitted the proposals so it is not like either one will actually be lower then the other. and who else will get the Baffin contract? we have no other options.

    • Posted by Jack on

      The airlines were not merged so would have to compete against each other. Too risky not to do so.

  5. Posted by Nunavutmiut on

    You’re right Traveling NTI card holder, the President of NTI stop talking about changing our community names to Inuktu. We need our own airline, look what we are facing in our land. High cost of living is distorting us. Wake up!!!

    • Posted by Jack on

      Nunavutmiut, Who’s going to pay for the airline? Someone with VERY deep pockets…

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