Nunatsiaq Online
NEWS: Nunavut October 23, 2014 - 4:42 pm

Airlines announce First Air-Canadian North merger is dead

“No such further discussions are envisaged."

NUNATSIAQ NEWS
Seven months after announcing their intentions to merge, Canadian North and First Air have pulled out of negotiations. (FILE PHOTO)
Seven months after announcing their intentions to merge, Canadian North and First Air have pulled out of negotiations. (FILE PHOTO)

In a surprise announcement issued Oct. 23, Makivik Corp. and Norterra Inc., the owners of First Air and Canadian North, said they’ve killed talks aimed at merging their two airlines.

“No such further discussions are envisaged,” a joint news release stated.

Neither company is offering a reason why and they say they will offer no more comment on the issue.

“Canadian North and First Air will continue to have a positive working relationship aimed at providing the best possible service to customers in a competitive marketplace,” the release said.

Makivik and Norterra jointly announced last April that the two airlines would merge to “improve the sustainability of these critical Inuit birthright enterprises” and “create better air services and new economic development opportunities across the North.”

But seven months later, both airlines have pulled out of merger talks.

Just last month at a meeting of the Kitikmeot Inuit Association, Canadian North executives hinted at hiccups with the merger process, calling it “complex.”

The process had been much slower than expected, said Canadian North’s vice-president Peter McCart, adding it could require another two years to wrap up.

“We want to make sure we’re doing the right thing,” McCart told KIA directors.

And earlier this week, a First Air executive told Ottawa’s Economic Club of Canada that the northern airline industry was not economically viable, making a public plea for more government investment.

“Weather and infrastructure are very challenging, but most importantly the operating costs are very steep,” First Air’s vice-president Bert van der Stege said Oct. 20.

“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.”

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