Doug Ashbury
Northern News Services

Yellowknife (Feb 14/00) - Fuel, more specifically the skyrocketing cost of it, has sparked an increase in Northern passenger and freight prices, says First Air's Tracy Beeman.

First Air hiked passenger and cargo prices by six per cent, Feb. 1, but there are notable Northern exceptions, said Beeman, the company's director of marketing and communications.

Ticket prices between Iqaluit and Ottawa, Iqaluit and Montreal, and Yellowknife and Edmonton will not be affected by the increase, she said.

As for freight, most routes will be affected by the increase, but Ottawa to Iqaluit will be excluded. And where First Air competes directly with Canadian North, expect First Air's cargo rates to jump three per cent.

"The reason for the increase is fuel. On Feb. 1, the price of aviation fuel went up 7.2 cents a litre. That kind of increase represents $4 million (in additional costs for First Air)," she said.

But after an industry-wide three-per-cent hike last December, Canadian North vice-president and general manager Michael King said the NorTerra-owned carrier does not currently see the need to put another increase on Northern passenger and cargo fares.

"We're finding it hard to pass on another increase to the customer. There comes a point when you start scaring business away."

Canadian North did opt to raise its international freight rates though. The fee, effective Feb. 15, only applies to cargo going outside Canada.

On top of the higher fuel costs, the Nunavut Government instituted a five- cent-per-litre surcharge on all types of fuel, Smith adds.

"We've seen fuel (cost) increases of 50 per cent over the past year. We haven't seen this since the Gulf War."

First Air is owned by the Inuit of Northern Quebec, while NorTerra is owned by the Inuvialuit and Inuit firm Nunasi Corp.