NUNAVUT - Representatives from the two airlines serving the High Arctic say the Government of Nunavut has no place getting involved in the airline industry.

Airlines serving the High Arctic say the recommendation of High Arctic Transportation Cost Study for the Government of Nunavut to charter flights for the communities of Resolute, Grise Fiord and Arctic Bay is expensive and unnecessary. - photo courtesy of Department of Economic Development and Transportation

"It didn't work with Air Canada and I wouldn't see it working in this situation," said Chris Ferris, vice-president of marketing and sales with First Air.

Ferris was speaking to a recommendation made in a study commissioned for the GN that the territorial government should contract a charter service to run flights to the High Arctic communities of Grise Fiord, Arctic Bay and Resolute in efforts to to lower the cost of air travel for residents and to provide them with better service and better connections in the North and to the south. The study was done by LPS Aviation Inc, an independent air transport consulting firm in Ottawa.

Ferris said he might see the government getting involved if there was a "hole in the marketplace" but with the number of aviation companies operating in the territory, he said he doesn't think it is needed.

"It would be the taxpayers who would pay for the service," said Sean Loutitt, vice-president, operations with Kenn Borek Air.

Loutitt said it would cost more for the government to purchase and operate an aircraft than it would be for the private sector.

Kenn Borek Air currently is the only carrier that provides service to Grise Fiord as it is the only one with a Twin Otter or DHC6 aircraft that can handle the community's short airstrip.

An adult round trip ticket between Grise Fiord and Resolute costs more than $1,000. Flights are scheduled twice a week, on Thursdays and Saturdays, but can be delayed or cancelled due to weather and the small planes have low weight restrictions, limiting capacity.

Loutitt said it is extremely expensive for his company to service the community with a population of approximately 150 people, but it does the best it can. To purchase a new Twin Otter, Loutitt said it would cost his company $5 to $5.5 million new or $3 million used.

"Unless airplanes are cheaper and the government subsidizes the fuel, our costs will remain high," said Loutitt.

He said that over the last two years, Kenn Borek Air has increased its fare to Grise Fiord by only two per cent.

Loutitt and Ferris both said there might be a role for the government when it comes to providing direct subsidies for passengers from Grise Fiord. Loutitt said he thinks it would be easiest because the government would have more control.

Ferris said he sees the report as a snapshot of where the airline industry in the North was a year and a half ago, and that his company has made many changes in an effort to serve the High Arctic more efficiently. In June, First Air announced it had purchased an ATR72 aircraft which serve the region. It will still carry 34 passengers but with double the cargo space, but won't be in operation until 2011.

Ferris said while his company's goal is to improve efficiency and lower costs for passengers, there is a reality that has to be faced.

"This is not Toronto or Montreal where there are 10 frequencies a day ... these are very long expensive markets," he said.

Canadian North president Tracy Medve said her company is most interested in hearing what option the GN prefers.

"The study is not complete. It's kind of like the punchline is missing," she said.

Medve said she thought the report was well done but she would have liked to have seen who the consultants met with.

Once the GN announces which option it prefers, Medve said her company would be interested in looking at the options.

She said the bottom line is that it all comes down to wanting to provide the consumer with good service at a reasonable cost.

"There may be different ways to go about it," she said, adding combining the options in the report might be a good idea.

All acknowledged that finding a solution to meet the three communities' needs is not going to be easy.

Ferris, Loutitt and Medve all said the study is a good starting point and will generate some discussions which they hope to be a part of. The trio said they each would have liked to have been consulted for the report.

The GN said it plans to contact the airlines before September but the three executives said they each have yet to be contacted to arrange such meetings.