Proposal could hurt First Air's future
NNSL (Oct 11/99) - Canada's third largest airline has come out strongly opposed to the proposed merger of the country's two largest carriers.
The proposed merger of Air Canada and Canadian Airlines "threatens" the survival of First Air, the company said.
"Under a merged scenario, one of us (First Air or Canadian North) will be left out in the cold," said Bob Davis, the president of First Air.
First Air, owned by Northern Quebec Inuit birthright corporation Makivik, spends $38 million a year in the North. First Air's annual revenue from the North is about $170 million.
In the North, First Air competes with NorTerra-owned Canadian North. NorTerra is equally owned by the Inuvialuit of the Western Arctic and Nunavut-wide economic development company Nunasi.
Though the two Northern carriers are Northern owned, each has an alliance -- First Air with Air Canada and Canadian North with Canadian Airlines.
Last Friday, Davis called on Transport Minister David Collenette to oppose any deal that would not specifically guarantee the interests of the North's consumers, its airline industry, First Air employees and Inuit investment through the James Bay and Northern Quebec Agreement.
"This merger threatens the survival of the North's largest airline, and with that, essential passenger and cargo service to small Northern communities, as well as the economic benefits of more than 450 Northern First Air jobs," Davis said.
First Air is the Arctic's largest private-sector employer.
According to First Air, if Air Canada and Canadian North were to merge, the resulting company would require only one Northern partner.
If there were only one national carrier, that company would be in competition with itself in the North.
Should First Air be forced out of business by a southern merger, 26 Northern communities would get less service.
For Pond Inlet, Iglulik, Hall Beach, Kimmirut and Clyde River, First Air is the only airline offering regularly scheduled service.
During a Friday teleconference, Davis went on to say that "we believe competition in the North has never been stronger."
He also said First Air has had informal discussions with Transport Canada. Davis said he was given indication that the country's southern market is moving toward "dominant carrier status."
But, he adds, there needs to be a formal process where Canada's entire industry can be reviewed. First Air have asked to make their view known at a parliamentary committee meeting.