IQALUIT
What many hoped signaled a new era in airline pricing between Iqaluit and Ottawa has been extinguished as quickly as it showed up on the scene.

GoSarvaq president Adamee Itorcheak said May 6 the new competitor on the Iqaluit to Ottawa flight will not operate and all tickets will be refunded. - NNSL file photo

GoSarvaq, in a news release May 6, announced it will not get off the ground because competitors drastically slashed ticket prices. There was not one flight yet, and all purchases will be refunded.

"Unfortunately we find ourselves in a position where we have to admit defeat, now, in order to protect competitive pricing for our potential passengers," stated president Adamee Itorcheak. "It is with deep regret we are notifying you to advise that we will not be able to operate GoSarvaq."

The company had announced $499 flights between Iqaluit and Ottawa, to which competitors Canadian North and First Air responded with $399 sales of their own. First Air offered a further sale last week during a limited time for $299 flights between Iqaluit and Ottawa. The release goes on to say "no one" predicted market conditions changing - Canadian North and First Air competing at a lower price point - as drastically as they did. "We have been open and honest when we have said our model is only sustainable in a competitive environment," stated Itorcheak. "When that market sees pricing that has never before been seen in at least the last 10 years, the environment is no longer competitive."

GoSarvaq decided to make the announcement in the morning of May 6 so passengers could still take advantage of the sales from First Air and Canadian North during the limited window. "We fully understand the impact this decision has on passengers, potential tourists, small businesses and our staff," stated Itorcheak. "This was not a decision we made lightly." Itorcheak said he will be releasing more information in the coming days and will continue to engage the Canadian Competition Bureau on changes to the market.

Despite closing before opening, Itorcheak wrote that "we have demonstrated that this model is sustainable. Other carriers have responded showing they can operate at affordable levels. This is a win for Nunavummiut and it's an important reminder that as Nunavummiut, we must demand better from the businesses who have the privilege of working in Nunavut."

The company plans to hold a press conference May 9 on the issue.

Meanwhile, the Canadian Competition Bureau is investigating a codeshare agreement between airlines operating in Nunavut, a spokesperson stated in an e-mail to Nunavut News/North last week.

"We can confirm that the competition bureau is currently reviewing a codeshare agreement between First Air and Canadian North," stated senior communications officer Sophie Paluck-Bastien.

She provided no other comments or details.

Consumers upset about the codeshare agreement were vocal in late April when GoSarvaq began selling tickets for flights to depart in May and Canadian North and First Air quickly responded with $399 flights of their own.

Online commentators speculated about collusion and expressed incredulity at the airlines' ability to lower their prices now that competition arrived.

David Gillen, director of the Centre for Transportation Studies at the University of British Columbia's Sauder School of Business, previously told Nunavut News/North that he would not be surprised if the bureau puts an end to the codeshare agreement, "because I think they're going to find that it's anti-competitive."

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