Northern airlines in merger talks
First Air, Canadian North shareholders in 'serious' discussions to unite competition
Miranda Scotland
Northern News Services
Published Monday, April 14, 2014
IQALUIT
Shareholders of First Air and Canadian North are holding "serious" discussions about a possible merger.
Talks have passed the preliminary stage and are "going on in earnest," said Peter McCart, vice-president of sales and marketing for Canadian North.
"The strengths and the identities of these two companies are very apparent and the ownership thought this made a lot of sense to enter into these discussions to create a stronger more sustainable business."
Canadian North is a subsidiary of NorTerra Inc. while First Air is held by Makivik Corporation.
The Inuvialuit Development Corporation took full ownership of NorTerra earlier this month.
There was speculation in 2012 that First Air might be sold to Canadian North but it never happened.
McCart said he thinks a merger is a better fit for the companies.
"Canadian North is very strong on the charter side, First Air has very strong operations on the passenger and cargo side, so there is a lot of complementarity between these two companies that make sense for a merger of equals to take place," he said.
The airlines will have to pass two major milestones if this is to become a reality. First, Makivik and NorTerra will have to reach a commercial agreement. Second, the parties will have to make an application to the competition bureau and federal regulatory authorities, explained McCart.
"We expect that process will eat up a good portion of 2014. We expect this to be finished up around the end of this year."
Flight operations and services will remain independent and unaffected during discussions, according to a news release from the airlines.
McCart said it is too early in the process to say exactly what the merger will mean for customers and the nearly 2,000 employees who work for First Air and Canadian North.
Still, management is optimistic.
"From an airline management standpoint we really see this as one plus one equals three," said McCart. "We think this will result in greater benefits for customers and employees and make these two Northern airlines stronger and sustainable for the long-term."
A Northern aviation industry consultant said in 2012 that a merger between the two airlines would likely result in major job losses.
The organizations will be posting updates on how talks are progressing to www.newnorthernairline.com.
Nunavut News/North could not reach First Air for comment.
