Canadian North will provide medical travel, duty travel and air freight for the Government of Nunavut in the Qikiqtaaluk and Kitikmeot regions while Calm Air will serve the Kivalliq region and Sanikiluaq as the territorial government awarded its airline procurement strategy contracts Friday.
The GN was seeking new carriers to enter the Nunavut market but only one potential new player -- North Star Air in Thunder Bay, Ont. -- made a bid on the contracts. First Air, which is in the process of merging with Canadian North, also submitted a bid. Nunavut News contacted several airlines over the past year and none expressed interest in serving Nunavut. A few executives with those companies said operating costs are too high in the territory.
The duty and medical travel contracts are for three years with the option for renewals potentially stretching them to a maximum of six years.
The financial terms were not publicly released, but the GN created its airline procurement strategy with a goal of reducing expenses associated with medical and duty travel, which costs the government an estimated $60 million to $65 million annually.
Calm Air's coverage area will include Winnipeg while Canadian North's civil service work travel and medical passenger service will encompass trips to Ottawa, Yellowknife and Edmonton.
The GN began its airline procurement process in 2017 and issued a $700,000 contract to German-based Lufthansa Consulting in September of that year to produce a report with recommendations on how to proceed.