Discount airlines creep northward

JOHN THOMPSON

Flights from Iqaluit to Ottawa could become much cheaper if Air Canada Jazz decides to follow its recent expansion into Yellowknife with a similar service in the eastern Arctic.

Two weeks ago Air Canada announced that its discount airline will provide flights between Edmonton and Yellowknife, starting July 3, with fares below $500 return.

That undercuts the return fares of their competitors, First Air and Canadian North, by almost $400.

This February, Air Canada registered Jazz as a company in Nunavut, raising the possibility of future expansion east. Companies must register themselves in order to do business in the territory.

But Air Canada officials downplayed the move, saying they have no immediate plans to offer flights into the smaller, more remote market in Nunavut.

After Jazz’s introduction of a Yellowknife flight, both First Air and Canadian North responded by offering temporary seat sales for the same route that matched the price cuts.

The cheapest Jazz flights offer bare-bones services, with no choice of seating or in-flight meal.

Jim Ballingall, First Air’s vice-president of marketing and sales, said his company has an edge over Air Canada because of its northern investments. The company has spent $150 million on infrastructure and maintenance to support its northern operations, he said.

“It’s going to be hard to compete against us,” he said. “We’ve been doing this for over 60 years.”

First Air also has political clout, Ballingall said, because it spends $40 million across the North annually, and has 250 employees in Nunavut, making it the second largest employer in the territory.

He said that should create loyalty among customers – particularly their largest one, the Government of Nunavut.

“Now I’d hope the territorial government would look hard and fast at northern carriers that call the North home,” he said.

If not, he pointed to the creature comforts of three feet of leg room, complementary drinks and a meal.

“We might lose the odd customer, but eventually they’ll come back,” he said.