NORTHWEST TERRITORIES
Lower fuel prices may be helping consumers at the gas pumps, but they may not be seeing savings in other areas.

Gas prices may be going down, but Air Tindi says the cost of travel won't necessarily follow. Airline president Al Martin said there are a lot of factors that go into the cost of a ticket. - Walter Strong/NNSL photo

Gas prices may be going down, but Air Tindi says the cost of travel won't necessarily follow. Airline president Al Martin said there are a lot of factors that go into the cost of a ticket. - Walter Strong/NNSL photo

Airlines are saying lower fuel prices will not immediately mean lower fares and prices for passengers.

Al Martin, president of Air Tindi, said there are a lot of factors in play and lower fuel prices don't automatically mean the airline will lower prices for passengers.

"It's not that simplistic and there's a lot more to it," Martin said.

"(Fuel) is part of our cost but not a major part of our cost. Our costs are based on fuel and a lot of other inputs, a lot of which have gone up."

Martin said part of the equation is there is a lot less flying and mining exploration work in the NWT at the moment.

Because the airline is doing less flying, he said its overall per hour costs have gone up.

Martin said he is always optimistic that things will turn around but he is not sure that lower fuel costs will prompt that.

"I don't think that would make a big change. There is not a lot of activity out there."

He said the people he has spoken to don't expect a big upturn in the exploration industry in the NWT or anywhere else this year.

Martin said this year is expected to be slow for activity in the exploration business, much like 2014.

"Mining is a cycling market - you have your ups and you have your downs.

"Our main focus is setting ourselves up well for the future so that we can then respond when there is an upturn."

Meanwhile, WestJet Airlines CEO Gregg Saretsky was quoted last week as saying he expects fuel costs to drop by as much as 30 per cent in the first quarter of this year, but travellers shouldn't expect to see a drop in fares unless the airline sees a sudden decrease in demand.

"Our plan is not to pass any of it on," he told reporters. "We price according to supply and demand."

Rod Brown, special projects manager at Yellowknife-based Discovery Mining Services said that his company has not really seen a direct benefit from falling oil and gas prices.

"The whole mining industry is suppressed, so if the price of oil had dropped when things are booming it would add it to more work because (companies) would be able to spend more."

Brown said he thinks lower fuel costs are helping existing mines in the North, but as far as he can tell, it's not really doing anything for the exploration business.

Doug Ashbury, communications advisor for Diavik Diamond Mines stated in an e-mail that for competitive reasons, he is not able to provide details about his business' fuel purchasing.

He also stated that to prepare for the winter road season in February and March, Diavik purchases and stores fuel in advance and as a result the recent decline in fuel prices is of limited benefit to Diavik.