Arctic airlines survive with little support, First Air boss says
"There is not much economic about flying to and within the Arctic"
A First Air executive said Oct. 20 that the northern airline industry is not economically viable and that the federal government should do a lot more to improve airport and air safety infrastructure across the North.
Bert van der Stege, the airline’s vice president-commercial, told an Oct. 20 gala held at the Chateau Laurier hotel in Ottawa by the Economic Club of Canada that government support is vital to maintaining the air network that connects the country’s Arctic communities.
He also congratulated First Air employee Elisapee Sheutiapik, who received the Economic Club’s Voice of Hope award that evening at a gala dinner event.
“The people in the North are calling on all of us to fix our industry and make this economically viable in order to secure their basic needs. Not just Elisapee is our voice of hope, 982 other First Air employees are committed to making this work,” van der Stege said in a release.
In his remarks, van der Stege emphasized the need for “cooperation, consolidation and improved stakeholder partnerships” in the northern airline industry.
“Since we are here this evening at the Economic Club of Canada, I need to emphasize that there is not much ‘economic’ about flying to and within the Arctic,” he said. “Weather and infrastructure are very challenging, but most importantly the operating costs are very steep.”
“If it wasn’t for the generous support of our Inuit shareholder Makivik and our loyal customers, we would not be where we are today.”
Van der Stege, who worked for airlines in Germany, Rwanda and Nigeria before coming to First Air last year, told the audience that he has never before seen a region where the cost of operating aircraft is so high and the participation of government is so limited.
He said that in the United States and Europe, governments subsidize “public service obligation routes” or essential air services, while airlines operating in Canada’s North are left to provide services at their own expense.
“I’m not asking to change this with cash subsidies, but we are asking for government investment in airport and air safety infrastructure,” van der Stege said.
“Government support in recognizing this vital infrastructure is what’s needed for an airline that is serving the people of the North.”
That investment would be beneficial not only to northern residents, but it would also help promote northern tourism, he added.
“We don’t see enough Canadians willing to spend a weekend or even a full week in such an interesting region with one of the most stunning landscapes in the world,” van der Stege said.
Makivik Corp.-owned First Air and the other major airline in Nunavut — Canadian North — are in the process of negotiating a merger, one that their owners say “would improve the sustainability of these critical Inuit birthright enterprises and would also create better air services and new economic development opportunities across the north.”
But that could take another two years, Canadian North said recently.
In the meantime, First Air has recently cut its scheduled service to Naujaat (Repulse Bay), saying it analysed its network and found the route was no longer economical.
That was one of the decisions that led Sakku Investments Corp., the business arm of the Kivalliq Inuit Association, to end its partnership with First Air last month.