by Doug Ashbury
Northern News Services

NNSL (May 04/98) - The president of the aboriginal-owned company set to buy Canadian North says the move will spark economic benefits for the NWT.

Air NorTerra Inc. will be Northern-owned and Northern-based, NorTerra's David Burnett said.

Last week, NorTerra Inc. announced plans to buy Canadian North from Canadian Airlines.

Air NorTerra is the 100 per cent-owned NorTerra company set up in connection with the proposed deal.

NorTerra, equally owned and managed by the Inuvialuit Development Corporation (IDC) and Nunasi Corporation, expects to acquire the Northern arm of Canadian Airlines by the end of the month.

IDC represents the Inuvialuit of the Western Arctic. Nunasi is a Nunavut-wide economic development corporation.

"For NorTerra, this is a good business opportunity. We think this will work for everybody," Burnett said.

"This is an important service to the people who own NorTerra."

The company will be headquartered in Yellowknife with another office in Iqaluit.

"In the longer term, the deal will mean more Northern contracting and more Northern employment," Burnett said.

The Northern arm of Canadian North employs about 70 people. That includes staff in the NWT as well as northern Manitoba.

"Northern ownership will put us closer to the people we are serving. We will also look at opportunities to expand the service."

Currently, Canadian North connects Yellowknife to Edmonton, Norman Wells, Inuvik, Cambridge Bay, Resolute, Rankin Inlet and Iqaluit. NorTerra said Canadian Regional service from Edmonton to Hay River and Fort Smith to Edmonton would be included in the deal.

NorTerra's proposed deal to acquire Canadian North does not include service Edmonton and Calgary. Nor is the inter-Manitoba schedule (Winnipeg, The Pas, Flin Flon and Thompson) included. These will remain with Canadian.

Customers will notice no difference as NorTerra will sign service contracts with Canadian.

The new company will contract flight operations and maintenance as well as in-flight and support services from Canadian Airlines.

But, said Burnett, "over time we hope we can create opportunities" for Inuvialuit and Nunavut land claim beneficiaries.

Asked if these legs of Canadian North are big money-makers, Burnett preferred not to discuss financial details, but he did say NorTerra would not look to buy it unless it had financial possibilities.

Terms of Canadian North's deal with NorTerra were undisclosed.

When the deal closes, NorTerra will have expanded its transportation holdings considerably.

The company already owns the North's only pan-Arctic marine operator, Hay River-based Northern Transportation Company Ltd.

NTCL is the main transportation link for bulk petroleum products and dry cargo to Northern communities.

"This is a strategic business decision for NorTerra and its shareholders as well as an opportunity to bring the ownership and operation of Canadian North to the North," NorTerra chairman Pat Lyall said.

A letter of intent to transfer Canadian North to NorTerra was signed about a month ago. The deal still requires regulatory and corporate approvals.

"We have a long history of providing vital services to the North and that service will be enhanced and strengthened by this agreement," Canadian North vice-president Barry Rempel said.

The new NorTerra company will join Canadian Airline's group of global partners and honor frequent-flyer points.

Canadian has partnerships with American Airlines, British Airways, Japan Airlines and Qantas.