New report urges more competition to improve air travel in the North
Competition bureau report released Thursday proposes creation of working group
The Competition Bureau of Canada released a report Thursday calling for reforms to boost airline competition and improve access to affordable air travel in northern and remote communities. (File photo by Corey Larocque)
A new report from the Competition Bureau of Canada calls on the federal government to boost competition in the country’s airline industry — placing special emphasis on the needs of northern and remote communities.
Titled Cleared for Take-off: Elevating Airline Competition, the report released Thursday lays out 10 recommendations to improve market access and lower airfares.
The bureau conducted a field study in Iqaluit and more than 120 interviews with local people, businesses and airline representatives in Nunavut, Northwest Territories, Yukon and northern Quebec.
Even the introduction of a single new competitor on a route could reduce fares by an average of nine per cent, the report said.
Air travel in the North, it said, is “an essential lifeline” not just for passengers but for the flow of food, medicine, equipment and mail.
Travel Nunavut, which works with governments, Inuit organizations and private operators to promote tourism, was consulted for the study. It reported that in most of Nunavut’s 25 communities, “there is very limited consumer choice” with one major scheduled carrier.
For instance, many routes are available only once a week and round-trip fares on the busiest route, between Ottawa and Iqaluit, range from $1,000 to $2,000 or more. For less-travelled routes, prices can be as high as $5,000, include one or more stops, and can sometimes take two days.
“The competition bureau has a responsibility to even the ‘playing field,’” Travel Nunavut said in the report.
The travel organization also suggested air services in northern Canada be treated similarly to highways in southern Canada, with increased funding to support operating subsidies and capital improvements.
The report proposes the formation of a national working group focused on improving northern air transportation.
It also recommends regulatory flexibility, including revisiting one-size-fits-all federal rules such as limits on pilots’ flying time and flight crews’ working hours that may not reflect the realities of flying in the Arctic.
The report calls for federal infrastructure dollars to be directed to airport authorities, rather than to individual airlines.
It references how, in 2018, federal funding was used to build a cargo warehouse at the Iqaluit airport for First Air, but the facility was not required to be shared — limiting its benefit to competing airlines.
Other recommendations include leveraging government spending to promote competition, such as by upgrading northern airports to handle more aircraft and airlines, developing “open-access facilities” at airports that would be available for all airlines, and opening government contracts to more bidders.
Northerners interviewed by the bureau expressed that “prices have gone up and service has gone down” since the 2019 merger of First Air and Canadian North, and after regulatory conditions tied to the merger were lifted in 2023.
This merger was approved despite the bureau’s concerns regarding competition, which is why the bureau has recommended removing the federal transportation minister’s authority to override reviews of “merger and competitor collaboration” under the federal Competition Act.
“This will help ensure that anti-competitive deals are not approved,” the report said.
The report stresses that in some northern markets, only one airline may be viable — but that doesn’t mean competition can’t exist.
Lowering barriers to entry, it said, creates pressure on existing airlines to improve, even if a route remains single-carrier.
On its website, the Competition Bureau of Canada is described as an independent law enforcement agency protecting and promoting competition to benefit consumers and businesses.
How dare they suggest that it is possible for the prices to be lower then they are if there was competition. Canadian North would not intentionally increase prices just because we have no other option to fly or ship cargo.
Any time i fly they thank me for choosing to fly Canadian North. They do that because they care.
They thank you because there is no other choice
Why approve the merger then?
This same Competition Bureau approved the merger that has sent all costs skyrocketing. Ha. Ha. Ha.
Completely absurd.
Nunavut needs more competition in airlines and stores. Different companies would make Northern/Northmart also Canadian North lower their prices if they started having competition
Summit air tried to secure land to build an office and warehouse space in Iqaluit, totally blocked by Iqaluit airport AkA Winnipeg airport authority. Wpg based, you don’t need to see what’s going on.
Hi Ian, in Arviat, a Dubai Bar would cost you $19.99 and a can of coke 4.35… We sure need competition in all areas. flooring plywood set you back almost 200.00/sheet, few dollars shy….Retailers here are most unscrupulous. Not a shred of mercy, take every penny take it all and let the hungry be damn….A southern chain has partnered with local in town and they are most $$$ hungry, the worst of a kind I’ve ever seen…
back to radio soon?
Must’ve lasted really short, because I never heard of Summit Air or that’s when I was living under a rock lol. Winnipeg you say? Both major stores headquarters are also based in Winnipeg aren’t they? Nunatobia
your rock must be huge, or you never come out from under it. Summit Air started 38 years ago and move their HQ to Yellowknife almost 25 years ago.
Ian, WAA have no authority or say over leases at Iqaluit Airport. Companies apply for a lease, and all leases are reviewed by the GN.
more stores would just mean more price fixing. Northern, Co-op and Home Hardware all just price match each other to keep prices high.
This ground has been tilled so many times before, and we always get back to the same place being that more competition is just not the answer for lowering fares and having sufficient scheduled routes to smaller communities. Canadian North needs their monopoly on the more profitable Iqaluit-Ottawa, Rankin-Winnipeg flights in order to subsidize all of the money losing flights back and forth to the communities.
Competitors will not be coming in to compete on the money losing routes to the communities. Instead, they will go for the money making north/south routes. Taking this business from Canadian North will inevitably force Canadian North and Calm Air to cut service to the communities. You just can’t win in this environment.
“Canadian North needs their monopoly on the more profitable Iqaluit-Ottawa, Rankin-Winnipeg flights in order to subsidize all of the money losing flights back and forth to the communities.”
What a crock. Let me get this straight, we – the GN and the public – are funding a complex cross-subsidization scheme, but we never get to see the books? We just take it as self-evident that the “subsidy” is what they need to break even on the community routes and not a penny more?
You, my friend, have Stockholm syndrome. Or perhaps, as the old saying goes, there’s a sucker born every minute.
It would be so nice if AIR INUIT got competition from another airline company.
Maybe there wouldn’t be so much of standby and cancelled personal cargos.
AIR INUIT is SO expensive and yet they barely serve drinks and snacks.
We listen to that voice recording in 3! different languages every 20-30 mins too, it gets pretty annoying/frustrating.
(maybe lose 1 language? French perhaps?)
They have too much on their hands they can barely keep up with Nunavik.
And I bet with the other airline; it wouldn’t cost us 500$ for 40 mins ride.
Maybe If they had more reasonable price, a lot of Nunavimmiut would be travelling to go see their families/friends for the weekend.
Come on !!!! . No competition allowed in the socialist republic of nunavik, everything has to be owned by the people.
Before anything else happens, the runways need to be paved, to get more airlines to look at the north. New terminals are nice but again the cart before the horse. Such a shame can fly to Australia cheaper than Edmonton to Cambridge Bay.
Agreed! I know some people might say that it’s easier to maintain gravel runways in the Arctic because of permafrost and frost heave but it really limits the number and type of planes that can come up. Because of the relatively small need for planes that can use gravel runways, it doesn’t make sense for major airline manufacturers to design them; they’ll never make their money back. I remember there was a German company that was going to build ATR-style planes designed specifically for these types of environments but it’s not a major aircraft supplier. Runways would also have to be extended, or relocated, in order to allow the size of planes that would make bringing goods in cheaper.
Perhaps a kind of solution would be for Air Canada and/or Westjet to buy Canadian North, Air Inuit and/or Calm Air? It might allow for greater economies of scale that could offset issues of the costs involved. It doesn’t necessarily solve the competition problem but it would connect northern communities to broader networks. If Air Canada were to buy those airlines, flyers would then have access to Aeroplan benefits and the Star Alliance. That could be have significant benefits considering how much money has to be spent to fly between communities. Given the size of Air Canada’s and Westjet’s networks, they may be able to better absorb some of the losses that occur on the smaller routes. Or, if they kept prices the same, the benefits accrued by flyers through the loyalty programs may make the current prices worth it.
Porter and Flair are, I think, too small to be able to absorb the costs of the smaller routes. Canadian Airlines (who remembers them?) used to run the flights to Iqaluit and elsewhere (hence the name Canadian North), though the scheduled service was less frequent.
To be fair, nobody was buying the $600 tickets to Montreal that Chrono was offering. 90% of ticket sales are government so they’ll pay whatever and the airline knows this.
“The report stresses that in some northern markets, only one airline may be viable — but that doesn’t mean competition can’t exist.”
And that my friends is why no one should take this report seriously.
So the Competition Bureau wants more than one airline to compete in northern markets to bring down prices, despite the fact that there may or may not be enough passenger and cargo demand for just one airline – at today’s prices.
Proposed solution, add airlines and lower prices. We went through this with First Air and Canadian North competing head to head. The result is that both of them almost went broke.
Do your really want to know the solution?
The GN needs to buy Canadian North from Exchange Income Corp (they should have bought it earlier). Restructure it as either a “not for profit” company similar to Nav Canada, or just operate it as a utility as they do the power company. And nobody else gets to compete, that is cherry pick the profitable routes such as Iqaluit – Ottawa.
Everyone knows that air travel is essential to the north and it will always be too expensive for the average person. Look at a map, look at the distances, and look at the population data. This is no going to change.
Operating the air service as an essential utility would allow the sort of control necessary, You need to subsidize certain segments, or products, just do it. GN annual trips, beneficiary travel, bereavement travel, tourism, just put in specific fares and rules. Need to subsidize fresh foods, put in a special commodity rate.
The same old approach is not working, and competition will only exacerbate the problem when there is barely enough passengers for one airline, and certainly not enough for two.
There are reasons why we only have one power generating utility, one fire department, one police service.
Every airport in Nunavut in owned by the GN and Iqaluit’s international airport is also owned by GN but partnered with NASL for 30 years. Perhaps it is GN that is charging sky high for their airport services and Canadian North pays for it but at the end it is the customer who is paying it all