North

Arctic airlines say Competition Bureau recommendations show southern 'ignorance'

The Competition Bureau says if two Arctic airlines — Canadian North and First Air — merge, it's likely that prices would increase, passenger and cargo capacity would go down and there would be fewer flights.

Airlines say they are 'dismayed' by the recommendations

Canadian North and First Air announced their plans to merge in July. (Canadian North /Facebook)

The Competition Bureau says if two Arctic airlines — Canadian North and First Air — merge, it's likely that prices would increase, passenger and cargo capacity would go down and there would be fewer flights. 

The bureau made its findings public Tuesday in a report given to the federal Minister of Transport Marc Garneau on Monday.

"The effects of the transaction are likely to include reductions in passenger and cargo capacity, increases in price, and reductions in flight schedules," the press release said.

The bureau said many communities these airlines serve are fly-in only, so the reduction in competition would hinder economic development, community connections, and the supply of food and healthcare.

Makivik Corporation, the organization that represents Inuit in Quebec's Nunavik region, owns First Air and operates across all three territories to more than 30 communities.

Canadian North is headquartered in Calgary and owned by the Inuvialuit Development Corporation. It operates flights to 16 communities in the Northwest Territories and Nunavut with links to Ottawa and Edmonton. 

The two companies announced their plans to merge in July. 

Airlines say recommendations show southern 'ignorance'

The two companies released a joint press release Tuesday afternoon saying they were "dismayed" by the recommendations.

They ask that Garneau keep reconciliation in mind when he reviews the report.

"The government of Canada must not ignore Inuit autonomy, elected Inuit leaders and [land claim organizations]; continuing to do so only sacrifices the short and long-term socio-economic condition of all northerners," it said.

The bureau's recommendations don't recognize the organizations' constitutional mandates to represent the interests of Inuit in the Nunavik and Inuvialuit regions, according to the release.

It said the bureau's "superficial understanding" is "representative of southern-led institutions' continued ignorance of northern businesses."

The release said the merger is necessary to keep air travel in the North and take the cost off the Inuit organizations.

The companies said that the bureau's "narrow focus" ignores some of the economic realities they are facing, including inefficiencies caused by overlapping routes, low demand, and redundant schedules. 

The release ends by saying that when Transport Canada's review is complete and they have received all regulatory approvals, they "intend to finalize the merger."

Until that happens the organizations will continue to provide the northern communities with services "at the financial expense of our Inuit beneficiaries," says the release.

Next steps

The report is only one step in the process of reviewing the potential airline merger.

Now Transport Canada has until April 12 to make its recommendations to Garneau. He will make his recommendations to cabinet, which will make the final decision.

There is no deadline on when cabinet has to decide.

The bureau also said in the report that should the airlines put measures in place to address its concerns, the bureau would also assess them for Garneau.

Corrections

  • A previous version of this story stated the Competition Bureau said the airlines should not merge. In fact, the bureau did not make recommendations but listed possible consequences.
    Feb 26, 2019 10:25 AM CT

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