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Air war looming in North?

Two airlines seek Air Canada 'preferred carrier' deals

Norm Poole
Northern News Services

Yellowknife (Apr 09/03) - Canadian North is negotiating a preferred carrier agreement with Air Canada. First Air says it, too, is in negotiations with the national airline.

Which of the two northern carriers will come out on top when the talking stops is up in the air.

Canadian North confirmed Monday that the firm is negotiating with Air Canada and hinted that a deal is all but done.

Rumours that an announcement is pending have been circulating through the Yellowknife business community for days.

"There is a preferred northern air agreement being worked on with Air Canada," said Canadian North's Kelly Kaylo.

When it will be completed and announced isn't known, but teams from both airlines are working on it, she said.

"We have come to terms on providing our customers with all that Air Canada can offer.

"At this point we have not yet finalized the details of some of those enhancements."

That includes "seamless" connections for Canadian North passengers, air fare initiatives, and upgraded status with Air Canada's Aeroplan travel points package.

"In time we will have announcements to make on whatever arrangements we have been able to put in place."

Air Canada's recent bankruptcy filing isn't a concern to Canadian North going into the deal.

"They are going to have some challenges at Air Canada. We expect that they will emerge from this restructuring a very strong, healthy, and profitable carrier."

Canadian North was the preferred northern carrier for Canadian Airlines prior to its purchase by Air Canada in 1999.

Kaylo said she expects a similar agreement with Air Canada would supplant the national carrier's existing arrangement with First Air.

That would not be a happy turn of events for First Air.

First Air has a long-term deal with Air Canada that is subject to periodic review.

"We are in the process of negotiating with them as well," said First Air's Jim Ballingall.

"Air Canada has said they want a level playing field for both airlines, but we are the carrier that bought NWT Air from them in 1997.

"We bought the routes, the planes ... the entire airline. When we did that we entered into a long-term commercial agreement with them."

Will only one of the two competing northern airlines have 'preferred carrier' status with Air Canada?

"Yes," said Canadian North's Kaylo.

"You would have to ask Air Canada that," said First North's Ballingall.

At deadline, Air Canada had not returned our calls.