Transport Canada monitoring airline merger after claims of rising fare prices in the north - APTN NewsAPTN News

Transport Canada monitoring airline merger after claims of rising fare prices in the north

File photo.

Brett Forester
APTN News
The federal government will step in if it finds “binding conditions” on a merger between two airlines serving Nunavut and the Northwest Territories aren’t met, says Minister of Transport Marc Garneau.

“We monitor their operations,” he says. “And we monitor all aspects of their operations as a merged airline, and we want to make sure that nothing is sacrificed in terms of the services that are offered.”

First Air and Canadian North merged and now operate only as Canadian North.

The airline tells APTN News that it’s been in contact with Garneau.

“We continue to work closely with Transport Canada with respect to those undertakings,” a spokesperson says.

The airline announced Thursday it’ll be overhauling its pricing structure.

The new pricing benefits corporate and rewards cardholders, but may force those looking for economy fares to pay higher prices.

For some communities air travel is a necessity. Some can only be reached by plane, or rely on Canadian North’s cargo shipments to deliver essential supplies.

There have been “growing pains” since the merger, the airline admits.

“I think that there have been some situations in the last month where we’ve experienced some issues with cargo service.”

The spokesperson did not offer details about the nature of these “issues.”

The federal government approved the merger in June despite concerns raised by Canada’s Competition Bureau that the merger could raise prices and negatively impact service.

“The merged entity is likely to have the ability and incentive to raise prices and lower the quality of service to passengers and cargo customers on all affected routes except Edmonton-Yellowknife,” the bureau concludes in a report issued this year on Feb. 25.

Reports emerged on social media that tickets for some flights within Nunavut have almost quadrupled.

The airline says the prospective traveler was booking on short notice and looking at a near full flight – which the price reflected. It contends the high price would’ve been the same before the merger.

In response, Garneau says the government had imposed conditions on pricing, scheduling, capacity, and transparency.

He adds that they are “very serious” about stepping in if “specific examples” emerge of the airline not following the rules.

Changing Airfares

Canadian North’s new pricing structure introduces an “economy fare class” that it says will offer tickets priced cheaper than the lowest fares currently available.

The airline adds, however, that these economy class seats won’t be available on every flight, only “less busy flights and travel dates,” making it possible that travelers may have to pay a higher price when economy fares aren’t available.

“The prices are going to be widely available. We’re not suggesting that they’re hardly ever going to be able to be accessed. There is going to be a significant seat allocation towards these seats.”

Canadian North says they’re trying to be as transparent as possible about pricing.

But it admits that those booking on short notice or booking during periods of high demand may have to deal with raised fares.

The Competition Bureau consulted an unnamed expert, who warned the government the merger “would likely lead to significant and material price increases for passenger and cargo customers in the relevant lead markets.”

Garneau acknowledges the bureau “felt there would be a problem with competition.”

Nevertheless, he approved the deal.

“As the transport minister I had the overall responsibility with respect to the public interest,” he says.

bforester@aptn.ca
@BrettForester

Tags: , , , , , , , , , ,