Fares plummet as Yellowknife-Edmonton flights soar

Kelly Kaylo, vice-president for passenger product and sales at Canadian North, hopes Nunavummiut traveling between Yellowknife and Edmonton will remain loyal to the airline. Canadian North serves many Nunavut communities and is 50 per cent owned by Nunavut Inuit through Nunasi Corp. The Yellownife-Edmonton route supplies the airline with up to 30 per cent of its revenue, but that’s now threatened by competition from new players like Westjet. (PHOTO BY JANE GEORGE)

YELLOWKNIFE — Inuit-owned Canadian North and First Air are feeling a financial pinch following Westjet’s recent decision to enter the Yellowknife-Edmonton route year-round.

Westjet decided earlier this month to expand its daily, non-stop service between Edmonton and Yellowknife from seasonal to year-round as of November 1, calling the move a “strategic decision.”

The increased competition for air traffic comes at a time when the two northern airlines already face declining passenger numbers and higher costs.

There’s less mining activity and tourism in the northern territories, the southern economy is poor, and many travellers are staying home this summer because they’re worried about money or catching H1N1, say the airline’s top managers.

“It’s a bit of a perfect storm,” said Christopher Ferris, First Air’s vice-president for sales and marketing.

Since Westjet started flying between the two cities this summer, it’s offered bargain basement-priced tickets.

A one-way ticket on Westjet starts at $99, not including taxes and surcharges.

The other three airlines that fly the Yellowknife-Edmonton route — Air Canada Jazz, Canadian North and First Air — have scrambled to match this price or beat it, even if they don’t think the increased number of seats or Westjet’s low fares are sustainable over the longer-term.

While it would be “naïve” to think the lucrative Yellowknife-Edmonton market would remain in the hands of northern airlines forever, the current competition still hurts, said Kelly Kaylo of vice-president for passenger product and sales at Canadian North.

A better schedule and better customer service might encourage Nunavummiut traveling through Yellowknife to remain loyal to Canadian North, an airline that employs locals, supports community events and offers discounts to its owner beneficiaries, Kaylo said.

That same hope is found at First Air where Ferris said he’s been “really pleasantly surprised” to see support for the airline, especially in Yellowknife, where it employs 200 workers.

Flying northerners back and forth from Yellowknife to Edmonton has long been a moneymaker for Canadian North, which is owned 50 per cent by Nunavut Inuit, and First Air, owned 100 per cent by Nunavik Inuit.

So, losses on the Yellowknife-Edmonton route could eventually affect on the two airlines’ more fragile northern air routes.

Air Canada first cut into the Yellowknife-Edmonton market three years ago, flying small 50-seat aircraft on the route.

Westjet is now flying a larger aircraft with a capacity of more than 100 passengers, which has boosted the total number of seats of the Yellowknife-Edmonton route to more than 5,000 a week.

WestJet may be content to lose money on the route just to take business away from Air Canada, some observers say.

Not that the situation for airlines in general is bright. The International Air Transport Association said last week that the numbers of air travel numbers continue to nosedive and fears of a prolonged recession and rising fuel prices have caused “renewed pessimism” for airlines.

However, the result for air travelers is that, at least for now, airfares have never been lower.

At the same time that Canadian North and First Air face pressure on their Yellowknife-Edmonton routes, some also want to see Westjet fly into Nunavut.

There’s also an email campaign currently circulating around Nunavut urging people to ask Westjet to fly into Nunavut, although the airline has said it has “no immediate plans to offer service from Nunavut.”