The Competition Bureau’s review of a proposed First Air merger with Canadian North indicates that reduced schedules and higher prices are likely, but the Inuit governments proposing the deal say the report is “superficial.”
“Our Inuit communities are surprised and extremely dismayed by the report,” states a joint news release from Quebec-based Makivik Corporation, owner of First Air, and the NWT-based Inuvialuit Regional Corporation (IRC), owner of Canadian North. “The (Competition) Bureau’s narrowed focus also ignores the economic realities (i.e., significant inefficiencies due to overlapping routes, insufficient demand and redundant schedules servicing small and sparsely settled remote communities over vast distances.”
The news release calls upon the minister of Transport Canada to approve the merger because the “organizations proposing this merger have a constitutional mandate to represent the rights and interests of Nunavik and the Inuvialuit region.”
The Competition Bureau said it foresees reduced competition for passenger travel and cargo services as a result of the two airlines joining forces.
“In most of the affected areas, the proposed transaction represents a merger-to-monopoly,” the Competition Bureau stated.
The Inuit governments countered that the merger is necessary and potential outside competition always looms.
“A merger will allow us to realize operational efficiencies that are needed to bridge the service gap and continue to be financially viable. Contrary to what the Bureau has written in its report, our airlines already face direct competition and the constant possibility of new competitors every day,” Makivik and the IRC stated.
The final decision regarding the proposed merger will be made by federal cabinet based on advice from the Minister of Transport.