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Federal government approves First Air, Canadian North merger

The proposed merger of First Air and Canadian North has received all necessary regulatory approvals, according to the Inuit-led proponents behind the deal.

The First Air and Canadian North merger has been approved by the federal government.
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Transport Canada set the following terms:

  • No price increases for both passenger travel and cargo delivery beyond those related to operating costs
  • No reductions to the weekly schedule options on all routes of the airlines’ combined network
  • Access to northern infrastructure (facilities and equipment) for new airlines entering the market
  • A commitment to increasing Inuit representation across the merged entity’s operations
  • Several transparency and accountability measures, such as providing quarterly financial updates and yearly financial statements to the minister of Transport Canada.

The Quebec-based Makivik Corporation and the Inuvik-based Inuvialuit Corporate Group (ICG) proposed the combining of the two dominant airlines last July.

“This is good news,” said Charlie Watt Sr., Makivik's president. “In 1990 we bought a troubled airline, First Air, and made it sustainable. At the time, we promised to create an airline owned by all of the Inuit of Canada and we are now much closer to making that a reality.”

The Competition Bureau warned Transport Canada in February of likely fare and cargo rate increases and reduced routes if the merger proceeded. Transport Canada's conditions address those issues.

A new release from Makivik and ICG rejects the notion of lesser service: "Travellers can be confident that there will be no degradation in service during the merger process, nor following its completion. The parties are committed to ensuring that the merger creates a sustainable airline which provides exceptional customer experience at the best possible prices."

The new, Pan-Arctic airline will operate under the name "Canadian North" and aircraft will use First Air's colours and inukshuk logo. Headquarters for the merged airline will be in Ottawa.

“The North, more than any other region in Canada, relies on air transportation to maintain quality of life. We carefully examined the public interest, financial and competition aspects of the proposed merger," stated Transport Canada Minister Marc Garneau. "A strong, financially stable northern air carrier, taking advantage of operating and network efficiencies of a merger, will best serve the North by leading to greater reliability of service as well as environmental sustainability. The strict terms and conditions will keep costs low and ensure northern and remote communities have the access they deserve, while at the same time protecting northern jobs.”