Nunatsiaq Online
NEWS: Nunavut July 25, 2017 - 10:00 am

GN ponders new ways of doing Nunavut medical, duty travel

Nunavut government seeks consultant for advice on territorial airline market

STEVE DUCHARME
Three northern airline bosses who appeared before the Nunavut legislature last year. From left to right: First Air President Brock Friesen, Canadian North President Steve Hankirk, and Calm Air President Gary Bell. (FILE PHOTO)
Three northern airline bosses who appeared before the Nunavut legislature last year. From left to right: First Air President Brock Friesen, Canadian North President Steve Hankirk, and Calm Air President Gary Bell. (FILE PHOTO)

When the Government of Nunavut concludes its next medical and duty travel contracts with airlines in 2019, it could be done under radically different terms, according to a new GN request for proposals that seeks a specialist to help them look at the aviation market in the territory.

Issued July 21, the RFP seeks an aviation industry specialist to help develop a procurement strategy before the GN’s new medical and duty travel contracts are put into place prior to a Sept. 1, 2019 deadline.

Those contracts are a coveted gem for airlines operating in Nunavut, with revenues estimated in 2010 at 36 per cent of the Nunavut airline marketplace, according to a study commissioned a year before the last round of contracts were signed.

But the airlines’ recent codeshare schemes and other cost-saving measures have angered passengers and led to growing animosity between Nunavut politicians and the major airlines.

This has left the territorial government open to exploring new options aimed at ensuring the GN gets the best possible deal.

“These changes [by the airlines] have resulted in an overall decrease in the levels of customer services,” the GN said in its tender.

The GN is also concerned that its next medical and duty travel RFPs may not produce the best possible financial result for the government.

“The GN is unsure how the marketplace will respond given the new market realities and limited competition among the northern airlines.”

In terms of reference attached to the RFP, the GN wants a consultant to research the value of combining both medical and duty travel within a single contract, separate contracts—or no contracts at all.

“What would be the impact if there were no formal contracts for medical travel or duty travel, and the GN were entirely reliant on the free market,” the attached terms of reference asked.

The RFP also proposes evaluating the advantages of issuing contracts by region, or “potentially procure as one overall territorial approach.”

And given the limited number of airlines capable of handling the contracts, the RFP asked if it might be easier to skip the formal tendering process entirely and hold direct negotiations with airlines.

The new medical and duty contracts, whatever their final form, need to provide “the best value government operations and to all Nunavummiut,” it said.

Following research and rounds of consultations with communities and stakeholders, the airline industry consultant will issue a final report to the GN by July 2, 2018.

The GN said it expects to be operating under the terms of its new medical and duty travel deal by Sept. 1, 2019.

The RFP marks the latest episode in the territorial government’s ongoing criticism of the existing airline industry, which Nunavut’s premier, Peter Taptuna, called in 2016 “a necessary” and not a luxury.

“You transport the food we have to eat, you move the goods we buy and the products we need. Airlines are truly the lifeline of Nunavut,” Taptuna said in a letter to Nunavut’s three main airlines—First Air, Canadian North and Calm Air—following an appearance by executives to Nunavut’s legislature in 2016.

The GN’s tender requesting an aviation specialist is open until Aug. 18 and is available here.

 

 

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