IQALUIT
When GoSarvaq launched its $499 Iqaluit-Ottawa air travel sales April 6, customers were coming in strong and steady, said president Adamee Itorcheak.

GoSarvaq president Adamee Itorcheak said phones were ringing to book his company's Iqaluit-Ottawa flights, then were ringing for refunds when Canadian North and First Air lowered their fares. - Stewart Burnett/NNSL photo

But that changed when competitors First Air and Canadian North responded with $399 prices of their own.

"We were able to capture the travelling public who were anxious to take advantage of affordable travel options as well as support a local Inuit-owned company," Itorcheak told a small room of reporters and supporters at a news conference May 9.

"Public support on social media was also strong. We were able to capture hearts and minds of Nunavummiut."

Phones were ringing off the hook for seats in the beginning, he said.

"When the legacy carriers responded with fares that hadn't been seen in recent memory, our phones continued to ring, this time for refunds," said Itorcheak.

"We admit we underestimated the level of aggressiveness the legacy carriers would throw at a company competing on a price on a two-day-a-week service."

The nail in the coffin came when GoSarvaq staff were internally testing lower prices to see if they could reduce the price even further, but accidentally published those lower prices on the company website May 3.

"When we were evaluating matching prices, we loaded lower prices, lower rates into our system that were accidentally released into the market on Tuesday and Wednesday of last week," said Allen Hayward, vice-president of GoSarvaq.

"There was no advertising of these prices done by us. However, the response to these fares was seen on the night of Wednesday, May 4, when one of the legacy carriers dropped their price to $266."

He didn't specify a number but said a substantial amount of people asked for refunds.

"Our sustainable model was based on a $499 price," said Hayward. "We can't operate for less. We had a very popular reaction to the market when we announced $499, lots of calls coming in, and then the price atmosphere changed in Nunavut and it went lower than the $499 and we can't afford to go any lower. There was a substantial amount of people that called for refunds."

Still, the company considers part of its mission a success -- being able to lower the price of air travel this summer, at least.

"Let me emphasize," said Itorcheak. "We still believe our model works and can still work."

As of May 9, all refunds had been processed.

"The failure to launch service as planned for GoSarvaq is a setback," said Itorcheak. "We will continue to advocate for fair, affordable fares for Nunavummiut and encourage all Nunavummiut to stand up and challenge the status quo of the aviation industry."

Hayward said the company is looking at cargo options to reduce its costs and said GoSarvaq will be back in some capacity. He also encouraged Nunavummiut to make their voices heard through channels such as the Canadian Competition Bureau.

Itorcheak, when asked to go into further detail on how some of the decisions were made, implied there were some subjects he couldn't get into "without getting my balls squashed."

"There's a lot more stuff," he said. "But we cannot put all our cards on the table, because they would love to chop that sucker like there's no tomorrow. We're dealing with a flawed mechanism, before we were even involved in it. I have to sort of watch what I say because I'm sure they would love to chop at my heels."

GoSarvaq had contracted Flair Airlines Ltd. to run the flights. Chris Lapointe, vice-president of commercial operations at Flair, said his company regretted the decision to cease operations.

"The integrity and leadership of Adamee Itorcheak, the quality of his team here and the strong belief that the people in this region deserve more affordable pricing and better service, all brought us here and those same factors will keep us engaged in trying to find other opportunities to make the model work," stated Lapointe in a written briefing.

"Our plan is to continue to work with Adamee and his team to collectively find our way through the political and competitive landscape and ultimately to provide real competition which benefits the people of this region."

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