NNSL (Nov 24/97) - Inuit-owned First Air will hike prices, the Carp, Ont.-based carrier said Tuesday.

The company cited privatization of Canada's air navigation system and overall Northern economics for the move.

Ticket prices on all flights will rise six per cent by March 1.

Increases will be phased in -- three per cent each on Jan. 1 and March 1.

Cargo costs will rise 10 per cent, 4.5 per cent Jan. 1 and 5.5 per cent March 1. Fees for packages under 2.2 kilograms will not increase.

"The increases are necessary for two reasons," said Andy Campbell, vice-president for sales and commercial operations.

"NAV Canada has imposed new fees," he said.

"Changes in overall economic conditions have affected First Air as well as other Northern businesses and consumers," Campbell said.

NAV Canada is the private non-profit company set up in 1996 to run Canada's air traffic control system.

The company is introducing fee schedules in two phases. The first, to be introduced March 1, applies to commercial aircraft. Phase 2, slated for Nov. 1, covers aircraft under eight metric tonnes.

In September, NAV Canada fees were given ministerial approval under the Civil Air navigation Services Commercialization Act.

First Air also said that due to fuel-price stabilization, the company will eliminate the seven cents per kilogram surcharge on cargo shipments effective Jan. 1.

As NAV Canada phases in its rates, the federal air transportation tax on passenger airline tickets will be eliminated. The tax is seven per cent of ticket price plus $6 to a maximum of $55. There is no federal transportation tax on cargo.

First Air, owned and operated by the Inuit of northern Quebec, has 30 aircraft and services in more than 30 communities.