The Competition Bureau’s review of a proposed First Air merger with Canadian North indicates that reduced schedules and higher prices are likely, but the Inuit corporations proposing the deal say the report is “superficial.”
“Our Inuit communities are surprised and extremely dismayed by the report,” states a Feb. 26 joint news release from Quebec-based Makivik Corporation, owner of First Air, and the NWT-based Inuvialuit Regional Corporation (IRC), owner of Canadian North. “The (Competition) Bureau’s narrowed focus also ignores the economic realities (i.e., significant inefficiencies due to overlapping routes, insufficient demand and redundant schedules servicing small and sparsely settled remote communities over vast distances.”
The news release calls upon the minister of Transport Canada to approve the merger because the “organizations proposing this merger have a constitutional mandate to represent the rights and interests of Nunavik and the Inuvialuit region.”
The Competition Bureau said it foresees reduced competition for passenger travel and cargo services as a result of the two airlines joining forces.
“In most of the affected areas, the proposed transaction represents a merger-to-monopoly,” the Competition Bureau stated.
The Inuit corporations countered that the merger is necessary and potential outside competition always looms.
“A merger will allow us to realize operational efficiencies that are needed to bridge the service gap and continue to be financially viable. Contrary to what the Bureau has written in its report, our airlines already face direct competition and the constant possibility of new competitors every day,” Makivik and the IRC stated.
The final decision regarding the proposed merger will be made by federal cabinet based on advice from the Minister of Transport.
In the legislative assembly on Feb. 26, Pangnirtung MLA Margaret Nakashuk urged the GN to publicly release its input into the proposed First Air and Canadian North airline merger and expressed concern that Nunavut is being overlooked in the deal.
While defending their desire to combine forces in writing — following the Competition Bureau’s warning earlier in the week of higher prices for consumers and reduced schedules as a result of a future merger — the Makivik Corporation and the Inuvialuit Regional Corporation didn’t mention Nunavut at all, Nakashuk noted.
Uqqummiut MLA Pauloosie Keyootak added, “We don’t own any airlines up here in Nunavut and those airlines are profiting from Nunavut.”
David Akeeagok, minister of Economic Development and Transportation, acknowledged the GN is also concerned about reduced levels of air service.
“I can state succinctly that our constituents in Nunavut will impacted if a merger proceeds,” he said. “I personally have felt the impact in our constituency of High Arctic when only one airline provides services to a community.”
Akeeagok would not, however, promise to make public the GN’s submissions to Transport Canada until he consulted with other departments that had input.
Keyootak said existing flight routing is already problematic as residents in Clyde River and Qikiqtarjuaq are forced to land in Pond Inlet and Arctic Bay before heading south to Iqaluit, spending extra hours in the air and on the tarmac.
“It’s creating a huge problem for the elders and medical patients,” Keyootak said.
Akeeagok said the government has been talking to both airlines about improving the routing of their flights.