First Air, Canadian North Merger Begins

The process of merging the North’s two largest airlines is officially under way, two months after the federal government approved their joining. Faced with increasing pressure from mainstream airlines competing on some of the most lucrative routes, Air North and Canadian Norththe two indigenous company-owned carriers proposed the merger, which will give it a monopoly on some routes. The feds moved cautiously with the approval, allowing the merged airline to operate conditionally for the first seven years. Among the conditions are that no routes be dropped and that “beneficiary fares,” the discounted tickets offered to members of the Inuit groups that own the airlines.

Although the federal competition bureau warned that creating the single predominantly Northern carrier would potentially be “detrimental” to Northern customers, the government said the precautions it’s taking would prevent those circumstances. The two indigenous companies that own the airlines, Makivik Corporation and the Inuvialuit Regional Corporation, said the merger is about preserving the vital air services they provide. In a statement they said the new airline, which will be called Canadian North but use First Air’s livery, will be “a strong and unified airline that will provide safe and sustainable air service to northern customers and charter clients.” Complete integration of the two businesses will take about two years.