Kerry McCluskey
Northern News Services

NNSL (Jun 15/98) - After tough negotiations, NorTerra has successfully acquired assets of Canadian North, NorTerra Inc. president David Burnett said.

On May 31, the property under Canadian North's banner, including two Boeing 737s and an option on a third, officially came under the control of NorTerra, which is equally owned by Inuvialuit Development Corporation and Nunasi Corporation.

Only four Canadian North employees will not join the new company set up as part of NorTerra's acquisition of Canadian North, the Northern arm of Canadian Airlines.

Burnett, who spoke in Iqaluit last Tuesday, said 53 NWT employees would be directly affected by Canadian North's sale and they had several career options.

"Very few have indicated that they definitely want to leave the North," Burnett said.

Barry Rempel, Canadian North's vice- president, said any salary changes were the result of a two-year-old contract between Canadian North and the union representing them.

On service, NorTerra is considering reopening routes south from Iqaluit, Burnett said.

"I think it is unlikely any new service will be established this summer," he said.

"Clearly, we would like to expand and grow the airline," he said.

"We think there probably is a good opportunity in Nunavut to make a connection to the south. If it looks positive, you can expect to see that service re-established."

The routes include possible flights from Iqaluit to Ottawa and Montreal which would compete with First Air.

Rempel also said the only thing holding up the final purchase by Air NorTerra Inc., a subsidiary of NorTerra, was paperwork to be completed by June 30.

"The only thing remaining are a number of regulatory issues, but nothing in any way that we believe is going to stop the sale from being completed," he said.

The carrier's appearance and services, including seat sales, travel points and current routes, will remain the same as NorTerra contracts back services from Canadian North.

Officials would not disclose the amount they paid for the airline because they said the purchase was a private business deal and did not involve land claim beneficiaries' money.

Jerry Ell of the Nunasi Corporation said the purchase was made possible through bank loans based on the success of NorTerra's other assets.

"Funding was arranged on the strength of NTCL (Northern Transportation Company Limited, NorTerra's marine operation)," said Ell.

Ell said the beneficiaries, who are all shareholders in NorTerra, stand to benefit from the purchase.

"As a corporate entity, Canadian North has become a very viable business and knowing NorTerra, it will continue to be a viable company and beneficial for Nunasi."

From the Inuvialuit Development Corporation, Eddie Dillon said Air NorTerra Inc. offers Northerners a new realm of possibilities.

"The potential for training opportunities is there and very strong possibilities." "We're from the North. We know and understand the feelings of the airline industry in the North and the ability of service is very strong in all our communities," he said.

Rempel also said the new company is ready and eager to compete in the Northern transportation market.

"I can see they're fiercely competitive, and more importantly, understanding of the local market's needs."