LLI GOLINE/NORMAN WELLS
Already expensive regional air travel between NWT communities may become more expensive soon.

North Wright Airways pilots Captains Travis Wright, left, and Rosemary Poirier in Norman Wells. The company faces large GNWT airport terminal cost increases, which may result in higher ticket prices or reduced services. - Jason van Bruggen photo courtesy North Wright Airways

North Wright Airway’s leases in Norman Wells for terminal space have almost doubled following property value reassessments of airport terminal space recently completed by the territorial government.

“A counter we were paying $8,700 (per year) for, is now $17,500,” said Andrew Bailes, North Wright Airways chief pilot.

“Another counter we were paying $9,000 for, that counter is going to go up to $17,000 as well.”

If North Wright faces increases like that across all their operations, the situation will be untenable.

“We don’t have the revenue for that,” North Wright Airways president and founder Warren Wright said.

“If we get hit like this, we’re going to have to put our rates up.”

With a fleet of 21 aircraft, North Wright Airways serves Norman Wells, Tulita, Fort Good Hope, Deline, Colville Lake, Aklavik and Inuvik. It is the only airline offering regularly scheduled (non-charter) service with counter service for ticket sales and baggage handling in all those communities.

Like all airline operators, North Wright pays for separate leases or licences for every aspect of their airport presence. There are separate leases for office space, land use, and a lease-licence for use of counter space and baggage area within terminal buildings.

Bailes, said in-terminal customer service is not a part of North Wright’s business model the company wants to abandon, but it may come down to reduced service or higher fares.

“We’ve got places that are coming due (for renewal) in the next two or three years, like Colville lake and Fort Good Hope,” Bailes said. “If they double (like in Norman Wells), the end user is going to be the one who has to pay for it unfortunately.”

“It’s simple math.”

Ben Weber, territorial government manager of commercial development for airports, said he couldn’t speak to the specifics of any one individual tenant, but in some cases property reassessments and lease reviews hadn’t been completed in almost 10 years.

“There have been cases where there were long periods of time between when initial rates were set and when they were reviewed or updated,” Weber said.

“Some people may not have seen a rent review since 1995.”

Property assessments on leased land and space at territorial government airports are done on a continual rolling basis. The Yellowknife airport last saw a reassessment two years ago and so no major impacts are expected there in the short term.

Weber can’t say how many airport leases in the Central Mackenzie may face a significant bump as the process is ongoing.

“We’re in a process over the past two years of getting caught up,” he said. “There are very few left that are outstanding.”

Weber said airport lease holders, whether for hangar property or for counter space, should look at the terms of their lease to figure out if they may have a reassessment coming. The notice period for a rent increase, Weber said, is from 60 to 180 days, depending on whether a lease is long-term or month-to-month.

Weber added that there is no wiggle room for his department when it comes to establishing leases based on independently established, fair market assessments of property values.

“If property value increase and the the fair market rate increases, we’re responsible as the public servants who manage the property of the territory to get a fair return for the people of the NWT,” Weber said.

For North Wright Airways, the issue isn’t only a fair return on tax payer dollars -- which they don’t object to -- but how the territorial government's fiscal management could affect the communities the airline serves.

“They’re forgetting this is all in support of communities,” Bailes said.

“They’re almost penalizing us for using a lot of their (territorial government) infrastructure,” Bailes added. “We’re just trying to make the infrastructure work the best it can for the communities.”

Tom Beauleau, minister of transportation, said he was in discussions with Bailes and Wright earlier in the month to address their concerns.

“We went away with the understanding that North Wright and the Department of Transportation will continue to work together to resolve their issues,” Beauleau said.

“We’re not interested in hitting an airline with extreme costs that will ultimately have to be passed on to their passengers.”

Beauleau added that discussions surrounding lease rates at other terminals were not discussed, but that he would be concerned if lease hikes affected in-terminal services in other Central Mackenzie communities.

Bailes said the company doesn’t anticipate, at this time, any lay-offs of front counter staff associated with the lease increases. He added that it was too soon to talk about what the rate increases could mean for ticket prices.

But the lease increases couldn’t come at a worse time in Norman Wells.

“We’ve got no work here in the Sahtu (since) the oil companies pulled out,” Wright said.

“I don’t know what the answer is, but this is crazy.”