Merger promises to reshape Northern aviation

Merger promises to reshape Northern aviation
Canadian North and First Air may combine to become one new, Northern airline as talks of a potential merger between Makivik and NorTerra were announced last week.Photo: File photo.

A dire prediction former Canadian North president Tracy Medve made in 2009 when WestJet muscled its way into the Northern market now seems destined to come true.

Speculation about the possibility of a Canadian North-First Air merger ended last week with a joint announcement by Makivik Corp. and NorTerra that the companies are pursuing a merger of the two carriers.

“A merger would improve the sustainability of these critical Inuit birthright enterprises and would also create better air services and new economic development opportunities across the North,” said the announcement.

Flight operations and services will remain independent and unaffected during the negotiation and regulatory review phases, the announcement said, but as the merged airlines look for savings, reduced flights to remote communities and job losses seem likely.

Medve’s original prediction emerged at the time when Air Canada Jazz was eating into the lucrative Iqaluit-Ottawa and Yellowknife-Edmonton legs that subsidized Canadian North and First Air service to remote communities, leading her to say, “There isn’t room for four carriers in this market.”

The big southern carriers were “cherry-picking,” Medve said, as the Northern carriers looked for ways to meet the competition. First Air cut back on flights and experimented with new routes, while Canadian North looked for new industrial customers.

Makivik Corp. made no secret its desire to sell First Air to Nunavut interests, but Nunasi Corp., the most likely buyer, has been pressed for capital since the 2008 recession. Earlier this month, Nunasi sold its interest in Nor-Terra Inc., a holding company owned by the Inuvialuit Development Corp.

Canadian North flies to 19 destinations in the Northwest Territories and Nunavut, via the southern gateways of Calgary, Edmonton and Ottawa, and provides charter service to industrial customers in Fort McMurray.

First Air boasts the only two civilian owned and operated Hercules cargo aircraft in Canada and offers scheduled, cargo and charter services to more Northern destinations than any other airline.

First Air has around 1,000 employees, of which more than 450 work and live in the North; Canadian North employs over 900 people.

The companies said Friday that the potential merger of the two airlines would not result in job losses.

Makivik and NorTerra Inc. promised to keep the public informed through a website:

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