No service reduction or price increase for Canadian North: Exchange Income Corp. CEO
Deal could take as long as 6 months to go through
The CEO of Exchange Income Corp., the corporation buying Canadian North, says no changes in service or prices will come as a result of the purchase. (File photo)
The CEO of the company buying Canadian North says it will remain business as usual at the airline after the purchase is finalized.
“This deal is about tweaking the strategies of the airlines to strengthen the operating performance and to provide a better service to the North,” said Mike Pyle, chief executive officer for Exchange Income Corp.
“It’s not predicated on layoffs. It’s certainly not predicated on reducing the number of flights.”
The Winnipeg-based Exchange Income Corp., which already owns several smaller northern airlines including Calm Air, announced last month it had entered into an agreement to purchase Canadian North for $205 million.
The state of Canadian North’s finances is unclear. Canadian North declined an interview, referring Nunatsiaq News to Exchange Income Corp.
Pyle declined to discuss the topic.
In 2019, Canadian North merged with First Air under the ownership of Nunavik-based Makivvik Corp. and the Inuvialuit Regional Corp.
Two years ago, Makkivik Corp. president Pita Aatami suggested Canadian North was losing millions of dollars partly as a result of federal restrictions applied to the airline as a result of the merger. The regulations were meant to maintain a level of service to northern, remote communities after the loss of competition.
Pyle said his company’s purchase of Canadian North won’t affect the northern aviation landscape. While Exchange Income Corp. owns several remote and northern airlines, none of those airlines currently run routes that compete with Canadian North.
Exchange Income Corp. CEO Mike Pyle says his company’s purchase of Canadian North is about leveraging its increased buying power and existing operations to create a more efficient and profitable airline. (Photo courtesy of Exchange Income Corp.)
Exchange Income Corp.’s current airline portfolio includes Nunavut-based Keewatin Air, which offers medevac and charter service; Calm Air, which serves northern Manitoba and offers some service to the Kivalliq Region of Nunavut; and other airlines that serve remote parts of British Columbia and Ontario.
Because of this, Pyle said, Canadian North would be run under the same management and continue as usual after the purchase.
John Gradek, an airline industry expert, offered some speculation about why Exchange Income Corp. might be interested in Canadian North.
“Canadian North operates a fleet of ATR 42s and 737s, which are … different from what our friends over at Exchange have as a service,” he said.
If Exchange Income Corp. can get a price for Canadian North that is below market value, the purchase makes sense, Gradek said.
“It’s a good thing and then there is going to be consolidation,” he said, adding the prospect of consolidation comes with a concern about loss of competition, which can lead to declines in service and an increase in prices.
This is something Canada’s Competition Bureau would look at closely, he said.
Despite assurances from Exchange Income Corp. that no layoffs will come from the acquisition, Gradek said they could still happen, but maybe not right away.
“There will be jobs lost, that is inevitable as far as I’m concerned,” he said.
“But I think that may not be immediate, that may take six months to a year before that happens.”
Steven Bard, chair of the master executive council for the Air Line Pilots Association, the union representing Canadian North’s pilots, said his team is “pursuing talks” about layoff protections and job guarantees if the deal goes through.
“The first concern for the pilots [is] their job security and for the future,” he said.
He said he’s been told Canadian North will operate as “status quo” under the ownership of Exchange Income Corp.
“There will be no fundamental changes in the near future, nor has there been any discussion on alterations of other routes or aircraft,” Bard said.
Both Gradek and Pyle estimate it could take six months before Exchange Income Corp. and Canadian North receive the regulatory approvals necessary to complete the sale. The deal needs to be approved by both Transport Canada and the Competition Bureau.
Sounds similar to the merger. No impact on service or prices. Can’t say that held true in the West.
Such an easy thing to say upfront and then when you hold a monopoly over passenger flights, it really does not matter if you held to your word does it?
Only in Nunavut can you have a monopoly, and charge what you want , and all contracts, are government guaranteed 100 percent,
“Despite assurances from Exchange Income Corp. that no layoffs will come from the acquisition, Gradek said they could still happen, but maybe not right away.”
In other words, be assured there will be no layoffs that will come from the acquisition, unless we have to lay people off.
So when they say “ There will be no fundamental changes in the near future, nor has there been any discussion on alterations of other routes or aircraft,” we can take that to mean, there will be no changes in the near future, unless we feel we need to make changes.
I get that this is a business, but why bother with those “assurances”? They are meaningless.
My view is that a government-owned airline will be ultimately needed, simply as an essential service. Otherwise, the smallest, remote communities will quickly lose their viability as places to live (and then all the other infrastructure investments made to date, including health clinics, power plants, airports, and schools will all become inviable too).
Now that Makivik is out of or way, Inuvialuit, Kitimeot and Kivalliq can. sit-down together to look for potential to invest in EIC.
Inuvialuit were an owner of Canadian North and are selling. Anyone can invest in EIC – it’s publicly traded.
At the very least, can they bring back the old blue, yellow & white polar bear branding/livery?
Agreed. Canadian North should be like BC Ferries – a government-owned corporation.
What a terrible idea. The GN can hardly SA and drivers licenses I would not want that incompetence running an airline.
Is it because of this pending sale that Canadian North it is now a fact:
that by deferring to the Canada Revenue Agency “Lowest Return Air Fare (or LRAF)”, most or all tax filers/travellers filing their 2024 tax returns will see a DECREASE in the LRAF from over $3,000 to under $1,000 per trip, maximum 2 trips per traveller. This is not even mentioned in the article.
Who can find us a valid ticket price that on the same day you decided to travel in 2024, you were able to book a return air fare of less than $1,000 for travel from Iqaluit to Ottawa, return.
Your fellow taxpayer
One needs to take screen captures – if booking online – of the interface the day before travel as proof lowest return airfare amount. Been doing that for years.
The difference between the posted CRA LRA and the day before quote has always been substantial, and even when CRA comes knocking during one of their reviews, they have always permitted screen captures as proof of day-of lowest return airfare amount.
I didnt realize this happened until I filed…. I lost over $3000 from my 2024 return due to this change. For 2025 I am taking screenshots of ticket prices on my day of travel.
CRA LRAF Iqaluit-Ottawa = $997
Booking same or next day LRAF on CN website: = +$3500
You can only claim the CRA-set lowest return flight for your community. The times when you could claim the high amounts are over. For example, if you leave Nunavut from IQ to Ottawa for three weeks and possibly have a can rental, you would already have the 2024 lowest return fare covered. Of course, you can try, but you won’t get it.
It has nothing to do with the airline, but solei with the CRA
Rather than “business as usual”, can they commit to making it better?
Airline Industry “expert” John Gradek clearly doesn’t know what Calm Airs fleet consists of if he thinks Calm Air does not have any ATR42’s. Did he really say that? “Canadian North operates a fleet of ATR 42s and 737s, which are … different from what our friends over at Exchange have as a service,”
Canadian North please post a 2024 lowest return airfare like you have done in the past to help out your northern clients. Shame on the CRA for posting such a low amount.
Interesting. I just read in another article from last month that the Kuujjuaq-Montreal route is not included in the purchase. What’s stopping Income exchange to just start flying on that route?
Calmair just bought a huge Dumpster Fire, and this will cause them tons of grief. And they do not have the people or capacity to operate Canadian North, and all the CDN staff will quit in mass, because Calmair will pay them very little.but I wish them luck