Air Canada's reduction in service to Whitehorse could cost passengers more
Airline analyst expects fares to and from the Yukon to go up by as much as 10 per cent this winter
An airline analyst thinks Air Canada's planned cut to its Yukon flight service this winter may benefit Air North, but could increase passenger fares.
Rick Erickson says the Yukon airline market is over saturated with more airlines serving the territory than many larger locations in the south.
"I think what were seeing in the Yukon market over the last three or four years has been basically a bun fight between the two major southern carriers, both WestJet and Air Canada, and I think they're fighting for market share in what is a very small market."
He says that competition has resulted in some of the lowest air fares in the country, but he warns that could quickly change.
"Your marketplace is probably 50 per cent less than say Calgary, Vancouver... and that's unsustainable," he says.
Erickson expects air fares from the Yukon to go up by as much as 10 per cent this winter.
He says the summer tourism market is what drives air traffic to the Yukon and says it doesn't make sense for air carriers to maintain the same number of flights year-round.
Erickson doesn't think Air Canada and Westjet will pull out of the market, but will continue to adjust their schedules seasonally until the winter tourism market grows.
He says Air Canada is able to sustain its Yukon service because of its contracts to fly federal government employees.
Last week, Whitehorse Mayor Dan Curtis and Yukon tourism minister Elaine Taylor announced they are heading to Yellowknife in October to promote Air North's service between the capital cities. The Yukon-based airline began flying twice a week between Whitehorse, Yellowknife and Ottawa in February 2014.