Northern airline merger will deliver good things, CEO says

“I think so far things are going very smoothly”

An aircraft with the combined livery of Canadian North and First Air lands in Iqaluit. By the end of 2019, the colours of First Air and the name of Canadian North will be the norm. As for passengers, the transition should be smooth, said the new airline’s CEO and president, Chris Avery. (Photo by Brian Tattuinee)

By Jane George

As First Air and Canadian North merge, passengers can expect to see more seat sales, better scheduling and improved onboard reading materials, says the new airline’s incoming CEO and president, Chris Avery.

“We want that to go smoothly and really take care of our customers so they don’t feel impacted by this change,” Avery told Nunatsiaq News.

But some of the two airlines’ 700 or so employees may eventually find themselves out of work as the airlines combine their operations.

Layoffs are unlikely to affect pilots and aviation engineers, Avery said.

But the merger will involve some rejigging of staff in the West and in the small northern communities, where right now, the two airlines each have their own employees.

The head office of the new airline will be located in Kanata, outside Ottawa, although Canadian North’s foothold has traditionally been in Alberta.

Inuit Child First, Indigenous Services Canada

“We really need a strong presence in the West,” Avery said.

“And, for sure, there will be some layoffs, but we’re also looking at how we can work in an environment where there are good people based in western Canada and good people based in eastern Canada.”

In communities where there are duplicate agents and ramp crews for each the two airlines, there will be “potentially” some layoffs.

But Avery said the goal is to manage those redundancies through attrition.

As for passengers, they can look for savings in the merger, he promised.

“Over time, we will make sure that the lowest possible fares are available to everyone,” he said.

That means continuing to have seat sales and continuing to hold beneficiary fares at the levels currently offered under the Pivut and Ilak fares.

These fares offer beneficiaries and their families travel at savings of up to 65 per cent.

Governments, organizations and some companies also have agreements with the airlines for reduced airfares.

“We have to absolutely continue to have sales so that the low fares are available to everyone, not just the people who a connection,” Avery said.

Then there’s the improved flight schedule, which comes in Nov. 1.

The average passenger should see that, because of the merger, they will have better scheduling options, time-of-day options, and, for example, same-day connections from Baffin communities to Iqaluit, Avery said.

The merger is set to affect the future of the two airline magazines, Above and Beyond and Up Here, although no decision has yet been made.

Above and Beyond is owned by First Air, while Up Here is a privately owned, Yellowknife-based publication.

No matter which one continues on as the in-flight magazine, Avery said he wants to “make it as relevant as we can to our customers, rather than an in-flight magazine that people look at because they have nothing else to do.”

He said wants them to think that when they fly, “Oh good, I get to read that.”

As for the passenger loyalty programs, if you’re an Aurora points collector, you have nothing to worry about: your points are safe with the new airline, which owns that loyalty program, and the program will be extended.

Everyone will also, for now, be able to collect Aeroplan points.

“I think so far things are going very smoothly, mostly because not much has changed,” Avery said.

But, for the two airlines, there’s dealing with the costly challenge of integrating the two airlines’ systems and lots of details.

Every one is important, Avery said—”we can’t scrimp on that.”

He said the future will bring greater “efficiencies,” that is, savings for the new airline, when aircraft are able to get filled up with as many passengers as possible, he said.


An earlier version of this story stated that the airline planned to offer sales that would bring down the price of regular fares to what Inuit land claim beneficiaries can book. The airline has since clarified that it intends to continue to have seat sales and will continue to hold beneficiary fares at the levels currently offered under the Pivut and Ilak fares.

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(12) Comments:

  1. Posted by Consistency on

    so on Nov 1 there will only be one schedule for Canadian North and First air. but we will still be able to book through either the CN or FA website… this sure wont lead to any confusions by passengers. and no chance of over booking here at all.

    I sure hope the costs go down it is so expensive to visit family in other communities or have them visit us. If there was not a free magazine on the flight could the ticket price go down… i know i know if you got rid of the magazine you would just make more money and not pass the savings on anyway.

  2. Posted by Northern Guy on

    Improved on-board reading materials, I guess that is supposed to make us peons more accepting of whatever fare hikes the new company has planned. Did anyone else notice he said nothing about reduced or even stable fare structures?

  3. Posted by Andy on

    Everyone? This is clearly not the case if only Pivut and Ilak fares will be reduced. Who cares about the in flight magazines? They are infected by bacteria, dirty or an unreadable shape. At this time and years before, passengers were able to collect Aeroplan points on flights with either airline, in addition to Aurora points on Canadian North. Please explain again the benefits

  4. Posted by The Old Trapper on

    People shouldn’t expect much of a reduction in fares or freight rates as both airlines were struggling to break even prior to the merger.
    In a good year one, or both may have made a small profit. In a bad year both would have lost substantial amounts, possibly 10 million+ each. The losses were generally financed either by the parent RIO or by commercial bank loans. Either way those loans are a liability which needs to be paid back.
    The airline is probably breakeven now and it should be able to reduce its costs by a few million a year, and also save another few million by operational efficiencies as the merger progresses. This will help the airline to be profitable in the future and should slow down any increase in prices provided a new competitor doesn’t come in and cherry pick the most profitable routes.
    This should be a good thing for Nunavut but I still contend that they need to take up an equity position in order to have a seat at the table concerning service and pricing.
    For those people that think that prices should be comparable to international transportation, you are still deluded. For those that want to see prices similar to southern domestic routes – time to write your MP to be (goodbye Hunter), and tell her that the government has to provide direct subsidies to the airline/passengers.

    • Posted by Not Comparable, But Not a Chasm Between on

      I don’t think that prices flying in the Arctic need to be on par to southern flights, exactly, but they are still valid to be “compared to” each other. Do I think a ticket for a 3 hour flight from Iqaluit to Ottawa and back should be the same price as from Ottawa to Winnipeg? No, I don’t. Do I think it should be 3.5 times as much? No, I don’t.
      Do I think that a ticket from Pond Inlet to Cambridge Bay, which has 2 stops and totals around 19 hours 20 minutes in the air round trip, should be the same price as Ottawa to Bangkok, which has 2 stops and totals around 64.5 hours in the air round trip? I mean, yeah, kind of. Way less flight time, so probably not a whole lot more, anyway. Do I think it should cost 6.5 times as much? Definitely not.
      So when people are “comparing” to southern flights, they’re not always saying they should be on par, but I think we want to know why a northern flight costs 661% as much as a southern flight when it’s only for 30% of the same flight time. Extrapolate that and you could say that you’re paying 22 times as much per hour in the air.

      • Posted by The Old Trapper on

        You’re still trying to compare services that really are not that similar when you get into the details.
        Just in aircraft utilization a southern aircraft will average 2 to 3 times as many hours a year as a northern aircraft.
        Also figure in that most of the northern aircraft are combi, adding at least half a million to the aircraft cost (if not more). Plus the cargo space is only used northbound so 25% to 75% of your aircraft is going to be empty for half of the flight. The ATR42-300s are really “fixed” combi aircraft, unlike the old Hawkers they can’t be reconned overnight to get the best configuration each day. Just a guess but a 10-20% loss of space right there.
        Add in the multistops and you have more empty space. There’s few (if any) communities that can fill up the passenger space every flight. Sure airlines can run freighters, but that’s empty for half the flight too.
        I’ll throw in that passenger travel is somewhat directional on different days You configure for the leg with the most passengers. GN employees don’t really like spending a weekend in the community. Patient travel is different, and the GN likes to make sure that you can connect north/south in one day. You can’t connect both ways every day for each community so you alternate.
        Then try to operate to Arctic Bay or up island in bad weather and you’re taking extra gas and losing payload.
        Add in that on average 5+% of the flights can’t land due to weather which has changed while the flight is enroute or is just worse than forecast.
        Oops, almost forgot the GN contracts that pretty well require daily flights everywhere, even if the community is too small to support a daily flight. Imagine the money both airlines were losing when they each had a competing flight!
        Most of the above does not apply to your southern flights. In the south for most medium to large cities you have multiple flights per day and can manage your inventory to fill up all the flights. An Air Canada flight is operating at an 85-90% load factor. First Air/Canadian North probably operates at a 40-60% load factor once everything is taken into consideration.
        It may not seem like this justifies fares that are two or three times as much as in the south but aviation has huge fixed costs. You have to pay these first just to stay in business.
        When everything is considered, and the above are only some of the more easily identified issues, it’s not surprising that fares are 2-3 times as much as in the south.
        The federal government really needs to provide a direct subsidy to the airlines in the north. As you may have guessed the Nutrition North subsidy went directly to the bottom line of Northern and ACL (the airlines actually saw their cargo revenue/kg go down significantly).
        I don’t expect people without the specific knowledge to know why it’s so much more expensive to operate in the north but it’s not the airlines trying to rip everyone off.

        • Posted by Omg on

          Trapper, why don’t you just marry northern flights?

  5. Posted by Flyer on

    So far there has been more cancellations with these two airlines, not looking good right now, I am hoping the schedule will improve.

    • Posted by Consistency on

      not likly so many communities are going from 2 flights a day down to one in the new sched… so that will not make traveling easier.

      • Posted by The Old Trapper on

        Two flights a day doesn’t make sense for most of the communities in Nunavut. The ATR42-300 has a few “fixed” configurations for the combi version that First Air operates. Looking at their website the version shown is 18 seats, and the maximum capacity is 42 seats. I think that they may have a 22 and a 30 seats configuration as well.
        With an 18 seat configuration, one flight a day, Monday to Friday, take out a few holidays and call it 90 seats a week for 50 weeks equals 4500 seats a year in each direction. So one flight a week is more than the total population of any single Nunavut community with the exception of Iqaluit.
        The 42 seat configuration would be 10,500 people a year, 6 times the population of Pond Inlet or 17 times the population of Qikiqtarjuaq.
        Can you now see why the airlines merged rather than both of them trying to fly to each community every weekday? I know that’s what the GN wanted (more service and competition) but it never ever made any sense.
        One thing I do agree with, travelling in the north is tough, there are very few people spread out over a huge area and it is very expensive to operate flights. Tell your MP, whoever she turns out to be that you need real significant aviation subsidies.

  6. Posted by Pilot 1 on

    If prices were lower, people would fly more. It’s called price elasticity. It works for just about everything. It appears the airlines are optimizing for profit, rather than load factor. That’s because they are in the business of making a profit, and they happen to do it by flying airplanes. – rather than the business of providing transportation, and making a profit so they can continue flying.

  7. Posted by Flyer on

    More cancellations this week, not a good start at all. Hope this is not going to be the norm.

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