Canadian North, federal government agree on new terms and conditions of airline merger

Following the 2019 approval of the merger of two airlines that serve Canada’s northern communities, First Air and Canadian North, the federal government on April 21, 2023, announced new terms and conditions of the merger. First Air and Canadian North — respectively owned by Makivik Corporation and the Inuvialuit Regional Corporation — said the reason for the merger stemmed from “the highly inefficient status quo of two airlines operating overlapping flight schedules with aircraft capacity that has far exceeded demand on most routes.” The airlines noted that this led to “higher airfares and cargo rates,” and hindered any investments in improving their operations. When the airline merger was first approved, it was subject to terms and conditions that were intended to protect the public interest, as there were concerns about decreased competition and reduced air services in the communities in Nunavut and the Northwest Territories that relied on the airlines. Those terms and conditions included: 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; and access to northern infrastructure (facilities and equipment) for new airlines entering the market, among others. Story has more.<br/>