NWT/NUNAVUT - Northern carriers may be slashing prices on their Edmonton-Yellowknife route to compete with market newcomer WestJet but carriers say the price war has not yet had an effect on community flight prices in Nunavut.

However, representatives of Northern airlines said future community prices could increase to compensate for lowered fares elsewhere.

Both Canadian North and First Air operate in both the NWT and Nunavut and are Inuit-owned; Canadian North by Norterra, which is owned equally by the Inuvialuit Development Corporation and Nunasi Corporation, and First Air by Makivik, the company mandated to manage the funds of Nunavik's Inuit.

Kelly Kaylo, vice president for Canadian North's passenger product and sales, said lowering fares to compete with WestJet won't cause Canadian North to hike prices for community flights.

"At this point in time there's been no change really in terms of our strategy in how we are competing against the two major carriers in the Yellowknife market and that is, you know, we're matching the airfares and continuing to provide a fairly high level of service," she said.

"In fact, we had our typical summer seat sale that was launched into the market some months ago for sale in the summer, and that seat sale extends to all of our communities."

Christopher Ferris, vice president of marketing and sales for First Air, said while First Air has not increased fares for community flights to make up the cost of matching WestJet's prices, the airline may consider doing so - and that increase will flow through to Nunavut.

"It could down the road have an impact on the fares beyond the northern hubs of Yellowknife and Iqaluit and Rankin, but at this time it's a situation that we're monitoring and keeping an eye on the cost and the revenue," he said.

The company has not yet taken any pricing action as a result of price decreases on high volume routes such as Edmonton-Yellowknife, but it does recognize the route is no longer contributing its fair share of revenue to costs.

"If a major component of ... revenue has disappeared, the costs don't disappear proportionally. The costs still have to be recouped over the remaining network. That's our challenge as a business ... to keep finding the revenue to pay for those ongoing costs," Ferris said.

On May 1, First Air implemented a five per cent increase on all fares over last year's rates. Ferris said fuel prices and other increases in costs - such as staffing, building and aircraft care, and taxes - caused the fare increase, not competition with WestJet.

"It's a challenging time, obviously, and as far as decreasing fuel prices, our prices beyond the hubs like Yellowknife, Rankin, Iqaluit, it's not decreasing. We're paying the same price in Nunavut as we were last year at this time. ... There's been some price fluctuation throughout the year, but I wouldn't say it's a real appreciable price decrease in fuel. If there's a fuel price decrease, we'd love to see it," he said.

"So if the fuel prices remain stable going forward, I wouldn't anticipate any further increases right now. And we're actually hoping that the Nunavut government will see some lower prices when they purchase this year's fuel than they did last year and pass that savings on to the airline," he added.

First Air is also offering summer seat sales.

WestJet announced earlier this month that it would offer year-round service to Yellowknife from Edmonton.