Merged airline to offer same-day service from Ottawa to all Qikiqtani communities
Staggeringly high northern airfares remain, with no relief in sight
Eventually, all of the merged airline’s aircraft will look like this one, using Canadian North’s name and First Air’s livery. (Photo by Brian Tattuinee)
Merger partners Canadian North and First Air have unveiled a new unified passenger flight schedule that offers some changes to eastern routes, but little to no relief from northern Canada’s staggeringly high air fares.
The new schedule, announced on Aug. 30, takes effect this Nov. 1. Customers may start booking flights now, from either the Canadian North or First Air reservation systems.
The announcement comes only seven days after a Government of Nunavut contract award to Canadian North Inc. for medical travel, GN employee duty travel and GN cargo.
The GN’s contract requirements likely influenced the design of the new schedule more than any other factor.
“The upcoming launch of our unified flight schedule will allow us to better allocate our resources so that we can offer the best possible service while at the same time improving the efficiency of our operations and enabling future investment,” said Chris Avery, the president and CEO of the merged airline, which will be branded as Canadian North.
This appears to mean any efficiencies that the merged airline produces will be re-invested into infrastructure and training, but not necessarily into lower air fares.
“The poor return on investment has not allowed us to invest in infrastructure or training that we need and to fund improvements to our operations. We will use efficiencies enabled by the merger to remedy this,” the two airlines said in a question-and-answer document released after open house events they held last July in Yellowknife and Iqaluit.
But that will not be enough to allow for lower air fares. “In order to enable lower prices we will need to find additional efficiencies,” the same document said.
No more wing-tip to wing-tip Iqaluit schedule
For Qikiqtani residents who must use Iqaluit as a hub, the schedule offers a big change: a return to distinct Ottawa-Iqaluit arrival and departure times, which existed during the codeshare period.
Right now, each airline offers flights between Iqaluit and Ottawa that depart and arrive at roughly the same times each day: leaving Ottawa for Iqaluit at around 9:15 a.m. and Iqaluit for Ottawa at around 1:45. p.m.
But starting Nov. 1., that wing-tip to wing-tip schedule will end.
From Monday to Friday, Qikiqtani airline travellers will get a choice of two departure times from Ottawa: an early flight at 7:15 a.m. and a later flight departing at 3:55 p.m.
It works the same way in the opposite direction: an earlier flight from Iqaluit to Ottawa departing at 11:55 a.m. and a later evening flight from Iqaluit to Ottawa departing at 6:45 p.m.
That early morning Ottawa flight means most Qikiqtani region residents, no matter where they live, can arrive home on the same day they depart from Ottawa.
On Saturdays and Sundays, the schedule remains unchanged: a departure from Ottawa at 9:15 a.m. and from Iqaluit at 1:35 p.m.
The new schedule does not include the Kivalliq region.
That’s because the merger partners have concluded the Kivalliq cannot support more than one airline, so they’re letting Calm Air handle that market by themselves.
“We will continue to partner with Calm Air on a codeshare basis to ensure the seamless ability for our customers to travel and ship within the Kivalliq,” the airlines said in their question and answer document.
Calm Air recently won the GN medical and duty travel contract for the Kivalliq.
So Calm Air will continue to be the main airline for that region, and run flights between Rankin Inlet and Winnipeg, as well as Rankin Inlet and Sanikiluaq.
For Kitikmeot residents, the new schedule offers daily 737-200 combi service between Yellowknife and Cambridge Bay.
At the same time, the merged airline offers connections from Cambridge Bay to Gjoa Haven, Taloyoak and Kugaaruk every day, and new southbound connections through Cambridge Bay to Yellowknife and then Edmonton.
The schedule offers continued service from Edmonton through Yellowknife to western communities such as Inuvik, Norman Wells, Hay River and Ulukhaktok.
There’s little change, however, in the notoriously high air fares that northern consumers have complained about for years.
For example, a one-way “saver” fare from Kugluktuk to Yellowknife on a Boeing 737-200 will cost $918.75.
Or a one-way “saver” fare from Arctic Bay to Ottawa, which uses an ATR turboprop for the Arctic Bay-to-Iqaluit leg and a 737-300 for the Iqaluit-to-Ottawa leg, will cost $3,030.43
And in the Kitikmeot, a one-way fare from Kugaaruk to Edmonton, on a Dash-8 and a Boeing 737, will cost $2.326.93.
For now, the two airlines will use separate reservation systems, but as the merger continues, the new airline will be branded as Canadian North and will use a single reservation system.
Earlier this year, Avery said it will likely take 18 to 24 months to completely merge the two businesses.
You’ll have to be a big saver to pay $918.75 for the one-way 1h7m flight from Kugluktuk to Yellowknife.
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For $901, you can fly from Toronto to South Korea, and then connect to another flight into Bangkok, a total flight time of 19h25m. Oh, did I mention that’s for a round trip?
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I understand that flying in the north is more expensive. But in this case, you’re paying $13.71 per flying minute Kugluktuk to Yellowknife versus $0.39 per flying minute from Toronto to Bangkok. Is it really 35 times more expensive?
Big Saver, thank you for your enlightening comparison. Now let’s compare a few other things.
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The carrying capacity of the aircraft involved. The aircraft used internationally will carry roughly 10x that used for Kugluktuk.
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Internationally the aircraft hours flown per day will be about 18-22, for a northern ATR an average of 3-6 so at least 3x and up to 7x.
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Check-in/baggage handling, internationally on an 8 hour day a ground crew may turn 4-8 aircraft, in Kugluktuk it’s 1 or 2 at most, so 2x to 8x as many.
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Aircraft parts, you need spare engines at Toronto and Yellowknife. You fly 20 aircraft out of Toronto and keep 1-2 spares, you fly 3 ATRs from Yellowknife and keep 1-2 spares, so 3x to 12x as many.
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Two pilots flying the 777, and 2 pilots flying the ATR, only problem is that your 777 is carrying 300+ people while the average passengers to/from Kugluktuk is probably 15, so 20x as many.
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Reservations system, internationally 40 million per year versus 200,000 for the north per year so 200x. It is per passenger though so the northern airline probably pays only 50x or 100x as much.
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The above are just some ball park numbers, basically every single facet of northern aviation is more expensive than international aviation. Economies of scale are huge when it comes to airlines.
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This doesn’t even factor in that many/most northern flights also carry main deck cargo which restricts the number of seats available for sale, and the cargo area is empty southbound. Internationally you can have a 100% load factor both ways, in the north you can’t and that in itself is expensive.
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So by all means keep these comparisons coming as they are hilarious.
Wow you complain good
Thank you Bob. It is a complex business and I had the opportunity to spend many years working for northern airlines in a variety of positions, and I also got to know a number of people in the industry from a variety of organizations, from small to large, and low cost to full service.
Whats this government doing…..give the airlines 20 million. Subsidize the flights. Open the territory up. Unless your NLCA or know somebody with buddy passes your screwed. Delimits the territories expansion and economic future.
Price elasticity.
The lower the price, the more you will sell.
Every business manager knows that price elasticity always applies to every other industry.
But somehow, few will admit that it applies to their industry segment.
Yet somehow, the perception of competition was enough to cut fares last year.
If the GN is to be the only market for air travel, then what does the GN need Canadian North for? The GN might as well establish its own Crown corporation airline – Air GN.
The only problem with the idea is that a government, any government, is poor at running a business. Governments inherently have a multitude of conflicting priorities, this is well illustrated with the GN. They do not have enough money to fully fund their main multiple priorities of health care, housing, infrastructure and social programs, and likely they never will.
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But the idea of a crown corporation, essentially a transportation utility does have merit. Unfortunately the GN cannot afford it, and would not be able to run it efficiently.
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I have long voiced the opinion that the RIOs in Nunavut need to take an equity position in the merged airline to ensure that the service needs are met, and that the business needs are met but not abused. By this I mean that the business does need to generate a profit which is necessary to generate the capital needed to reinvest in the business, and to provide a return on investment to the shareholders. The investors are currently Makivik and IRC, this would add in Nunavut.
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The GN does have a role, working closely with the merged airline and giving it 100% support when it comes to it’s air transportation. Profits if any go directly back to the individual investor groups which would include the Nunavut RIOs.
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This would be a win for the GN, a win for each region, a win for the consumer, and a win for the merged airline.
For the RIO owning a share that is great and all but i think there is a reason that the RIO that do own First Air/Canadian North (Makivik and IRC) dont really operate in the regions that they represent. This is because they want to maximize profit and it is hard to charge high rates to your own family.
Consistency – my understanding is that Makivik has on more than one occasion offered to sell a portion of First Air to one or more Nunavut RIOs but the RIOs were hesitant.
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Now I don’t know why the RIOs did not want to deal – I don’t think that the buy-in price was the issue. It may have been due to the cash calls that Nunasi experienced when they owned Norterra/Canadian North.
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With two aggressive competitors, and a GN policy of encouraging that competition, it was clear from the sidelines that neither airline was likely to be profitable at the time of the above discussions.
Old Trapper:
You say the GN cannot afford to run an airline. The GN is paying someone else to run it now, and presumably make a profit doing so. That profit is coming from the GN. Perhaps that is why the GN does not have the money to do the other things it needs to do.
You say governments are inefficient at running businesses. That may, in general, be true. But you have to be careful how you measure efficiency. The Canadian single payer health care system costs way less than the private sector health care system in the USA. The private sector may be more efficient, but it can also be much more expensive.
Dear “Older” – may I get away with saying that older is not always wiser? Just kidding!
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Just a FYI, I was around when the GNWT was running the G1 between Yellowknife – Rankin Inlet – Frobisher Bay (before it was Iqaluit), and Transair was running the YS-11 out of Churchill, were you?
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You do make a good point, and it is an apt comparison in some regards as health care and air transportation in the north are both essential services.
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I take it that you are aware that many/most doctors in Canada operate in private (for profit) practices? Likewise nurses, technicians, physio therapists? They do bill the single payer system operating in each province/territory. A big difference is that there is no insurance company in the middle also making a huge profit (never mind drug prices in the U.S.)
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The whole health care debate is best kept for another time but I am a big fan of the single payer system – the U.S. is inhumane and people die every day there because they cannot afford health care.
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But providing health care is expensive, especially in the north. So is social housing, likewise education, social programs, infrastructure, policing, conservation, etc. And all of this with an exploding population – the situation will get worse before it gets better.
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The GN does not have the money for the above, never mind trying to run it’s own airline. It still cannot fill all of the open positions, and if it did it would run a huge budget deficit. The GN has a very limited tax base and would have trouble raising additional revenues to buy and operate an airline. It has neither the expertise nor the infrastructure.
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Remember this is the government that thinks it is a good idea to split up every medical and duty travel contract to generate “competition” without realizing that you can’t have two viable airlines when the market barely supports one! It’s been 20 years and I still don’t think the GN understands.
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Ideally the Nunavut RIOs will buy into the merged airline, and the RIOs will convince the GN to fully support it. If the GN still wants competition then they will find themselves in a worse situation than today.
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Don’t forget that the merged airline operates in other areas than Nunavut, and the bigger an airline is the better it’s economies of scale. This does matter in trying to keep costs and prices down.
$6,060 dollars to get from arctic bay to Ottawa return. even here in Iqaluit I will never be able to afford airfare for me and my family. disgusting. it’d be like 12-13,000 dollars in airfare alone. how the hell is this viable.
What did you expect a deal? After paying those exorbitant prices, First Air and Canadian will still lose your luggage, blame it on you, and probably sweeten the deal with 75g bag of pretzels inflight. The government doesn’t care at all. Medivacs are the largest source of revenue which goes to Air Canada who has their hands in all partnerships with First Air and Cdn. Air Canada is owned by… yup Federal government. A great system… capitalism at its finest. Now go pay $6000… listen to babies cry the whole way to Ottawa, slug back a Special Coffee and call it a career.
Air Canada has nothing to do with the Medevac contracts in Nunavut.
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Air Canada does not have a partnership with Canadian North or First Air. Both airlines are Aeroplan customers who buy points to give to their customers and are required to redeem fights for any Aeroplan customer, even though they may not be Canadian North or First Air customers.
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Air Canada is not owned by the federal government, it is a public company listed on the Toronto stock exchange. You can buy a share then go to their AGM and complain if you don’t like them.
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I agree that the federal government screwed up aviation in the north when it deregulated in the late 1970’s. There really should be a better way to subsidize air travel and air cargo in the north.
Canadian North are just con-artists, making millions off northerners while ripping us off and providing extremely poor service.
White people getting ultra-wealthy off the backs of Indigenous peoples. Feels like I’ve heard this story before.