First Air pulls plug on codeshare
Disappointed by sudden move: Canadian North president
Michele LeTourneau
Northern News Services
Monday, November 21, 2016
NUNAVUT
First Air abruptly terminated its codeshare agreement with Canadian North Nov. 17, effective May 16, 2017.
"Canadian North is disappointed by First Air's sudden, unilateral decision to terminate the codeshare agreement with our airline, given the numerous efficiencies and schedule improvements it had enabled," Canadian North president Steve Hankirk stated in a news release moments after the First Air announcement.
In his news release, First Air president Brock Friesen acknowledged efficiencies.
"However, our customers have told us that they strongly prefer to fly First Air on its own," he said.
Both airlines were part of an industry-wide inquiry of competitiveness for services within Nunavut and the Northwest Territories by Canada's Competition Bureau. Most recently, the bureau added predatory pricing to its inquiry.
On Oct. 20, the bureau filed an application for information with a federal court.
"The orders, which were granted on October 26, require First Air and Canadian North to provide information to the bureau, to assist with an ongoing investigation into alleged anti-competitive conduct of the two airlines," the bureau's senior communications advisor Taylor Bildstein told Nunavut News/North at the time.
"I can confirm that the bureau is currently reviewing a codeshare agreement between First Air and Canadian North, as well as allegations that these airlines have engaged in predatory pricing."
The predatory pricing complaint came from GoSarvaq, a small airline that tried to get off the ground earlier this year. In a news release May 6, GoSarvaq announced it could not proceed because competitors drastically slashed ticket prices.
"Predatory pricing occurs when a company deliberately sets prices below cost for long enough to eliminate, discipline, or deter entry by a competitor," explained Bildstein. "This involves an expectation that the company will be able to recoup its losses later, by raising prices again."
The codeshare agreement between Canadian North and First Air came into effect in May 2015. Since that time there have been numerous complaints from the public related to pricing, as well as service.
In January, executives from Canadian North, First Air, and Calm Air - which also has codeshare agreements - appeared at the legislative assembly to answer questions.
"In the history of the legislative government in the North, never before has one industry been asked to appear before the committee in this forum," Premier Peter Taptuna told the airline bosses.
"We take this session today very seriously and you should too."
The three presidents repeatedly called the complaints that followed the change "growing pains."
