Longtime competitors First Air and Canadian North announced Friday that they're joining forces to form a single airline.
The airline will function under the name Canadian North and will feature First Air's marketing brand, including its recently adopted inuksuk logo.
The proposed airline, if approved by regulatory authorities, will be headquartered in Ottawa. Makivik Corporation, the Quebec-based parent company of First Air, and the Inuvialuit Development Corporation, owner of Canadian North, hope to complete the deal by the end of this year.
The parties cited a Government of Nunavut report that recommends more efficiency in Nunavut air transportation services, and stated that a merger "is the only viable way to both meet and exceed these essential needs for Nunavummiut and all Northerners."
The combining of resources should result in better on-time service, fewer flight interruptions, help address pilot shortages, improve maintenance of aircraft and create a wholly-Inuit owned airline, according to a news release issued by Makivik Corporation.
"The world is changing and we need to adapt to new realities," said Charlie Watt Sr., Makivik President. "This is one way to assert our sovereignty across the Arctic."
Makivik and the Inuvialuit Development Corporation stated that customers will not see any changes to fares and scheduling while the merger is in progress.
Concerns over higher airfares
Early response from Nunavummiut to news of the merger online was a chorus of concern over possible higher airfares in the future. Some online posters pointed out that a codeshare agreement between the two airlines in the past saw ticket prices rise.
"It's a big news story, unquestionably," said Rick Erickson, an airline analyst with RP Erickson & Associates in Calgary, who added that merger talks have been ongoing for several years.
"You can bet that the federal government is going to be paying attention to this quite closely given just how absolutely important civil aviation is for the entire Canadian northlands," Erickson said, referring to passenger service and cargo delivery. "You can never underestimate how important (the airline industry) is to the North, in every aspect you can think of: economic development, social welfare, health care, it just goes on and on."
From the airlines' perspective, Erickson said they will be aiming for improved economics in the high-cost environment of the North.
"The key issue is the financial well-being of each of the carriers. A merger could conceivably strengthen the role that aviation is able to play in the North," he said.