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Consolidation in Canada Continues

Photo: John Davies/Wikimedia Commons

 

First Air and Canadian North have completed a merger transaction which paves the way for further consolidation within the Canadian commercial aviation market. The respective owners of the two carriers, Inuvialuit Regional Corporation and Makivik Corporation issued a joint statement stating that the move will create “a strong and unified airline”.

With both firms having significant network overlap, the news is not entirely surprising, but nonetheless significant. The carriers hinted at the problems of duplication within their statement, suggesting that “the highly inefficient status quo of two airlines operating overlapping flight schedules with aircraft capacity that has far exceeded demand on most routes has contributed to higher airfares and cargo rates while impeding their ability to invest in improving their operations.”

The full integration of the two companies is expected to take between 18 and 24 months, owing to the “complex nature of the airline industry and the many essential services that First Air and Canadian North provide”.

In the short term, both brands will continue to trade, however only the Canadian North name will survive the merger. The distinctive First Air identity will not be lost entirely, with its famous Inukshuk logo and red and white colour palette will live on under the new venture’s scheduled flights and charter operations.

Mark Taylor/First Air

Chris Avery, president and CEO of First Air will serve as leader of the unified organisation. Speaking as the news was announced, he said: “We are embarking on an exciting journey and our destination will be a stronger and more sustainable airline, focused entirely on providing safe and friendly passenger and cargo service to the people, organisations and communities that depend on us.”

Aware of the importance of the carriers’ lifeline services to remote towns and cities, Avery affirmed his commitment to consultation with passengers during the merger process. “We understand that our actions touch many lives, so we will maintain a ‘community-first’ approach throughout this integration, which includes carefully considering the essential needs of our customers when making decisions, communicating clearly and listening for feedback,” the CEO continued.

Canadian North currently operates three types of aircraft: the Boeing 737-300 in a flexible configuration of 136 seats or combinations of passenger and cargo, up to a maximum of 31,400lbs (14,200kg), the 737-200 equipped with up to 112 seats or combinations to a maximum of 29,900lbs (13,600kg), and Dash 8 Combi examples with up to 37 seats or a combined options up to a maximum of 8,200lbs (3,700kg). As for First Air, the carrier flies the 737-400 in an all-passenger layout and also the 737-400C fixed combi variant, seating 156 and 78 passengers respectively. The airline also has ATR 42-300 and -500s, offering space for up to 42 passengers, with the former also allowing mixed-freight options.

The development is the latest within the rapidly evolving Canadian commercial sector. In June it was announced that Air Transat and Air Canada had entered advanced merger talks, with rival WestJet’s takeover by private equity firm Onex Capital recently given the green light by regulators in Ottawa.

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