First Air And Canadian North Merger Approved By Federal Government
Anna Kroupina, Open Jaw
A merger between First Air and Canadian North has been approved by the Government of Canada.
The two Indigenous-owned primary air carriers serving Canada's North filed a merger notification with the Commissioner of Competition and the Minister of Transport in fall 2018.
The approval of the merger comes following a public interest assessment led by Marc Garneau, the Minister of Transport, and incorporated the findings of the Commissioner of Competition.
"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," said Garneau in a statement. "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 merger is subject to a number of terms and conditions.
"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," said Garneau.
The terms and conditions include:
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; and
Several transparency and accountability measures, such as providing quarterly financial updates and yearly financial statements to the Minister.
Earlier this year, The Globe and Mail reported that the Competition Bureau ruled that a merger between First Air and Canadian North would result in a “merger-to-monopoly” and said it would likely lead to higher prices and fewer flights.
First Air and Canadian North owners reacted angrily, saying the bureau ignored the “overwhelming” benefits for northerners, floated the risk of the airlines “being driven out of business” and argued a merged northern airline is the “only long-term viable answer.”
Anna Kroupina Journalist
Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.