Airline merger reaction: Cautious, watching closely and unwilling to comment on impacts to GN’s airline procurement strategy: David Akeeagok

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Cautious and monitoring developments closely is how David Akeeagok, minister of Economic Development and Transportation, described his reaction to the airline merger.

“Some of the conditions that Minister (Marc) Garneau put out are the very things that we wanted in there in the terms and conditions,” David Akeeagok said. photo courtesy of David Akeeagok

He expressed relief over the terms that Transport Canada imposed.

“Some of the conditions that Minister (Marc) Garneau put out are the very things that we wanted in there in the terms and conditions,” Akeeagok said, pointing to the limitations on price increases, the maintenance of existing routes and the preservation of discount fares for Inuit.

“We will not hesitate to voice our concerns if we see deterioration in service to our communities,” stated a news release later issued through Akeegok’s office.

Akeeagok refused to discuss how the merger could affect the GN’s airline procurement strategy, which has been in the works for almost two years. That objective is to streamline medical and duty travel, which costs the territorial government an estimated $65 million per year.

“We’re right in the middle of the agreement,” Akeeagok said. “I don’t want to comment on it until it’s done. It is very sensitive as it involves contractual obligation for the GN… I don’t want to impede or interrupt (the process).”

He said he’s hopeful news will be released on the airline procurement strategy at the end of July.

The GN paid German-based Lufthansa Consulting almost $700,000 to produce a report on improving medical and duty travel. That study recommended, in part, that new airlines could be attracted by offering a percentage of volume or revenue on grouped fight routes. It also found that air freight rates for Nunavut can be up to 80 per cent higher than other small isolated markets and some routes are over-served, resulting in flights that are well below capacity.