First Air, Canadian North codeshare has Nunavut passengers worried

Nunavut travellers are worried that increased co-operation between two of the North's biggest airlines will leave them with fewer options and higher fares.

"Some communities, smaller communities are getting now one flight per day. They use to get two flights per days. Now we are jumping back to the 1980s. That's terrible," said Joanasie Akumalik, an Iqaluit city councillor.

Nearly a year ago, merger talks between Canadian North and First Air were called off. But while a full scale merger didn't happen, the two airlines launched a codeshare agreement in July that allows the two companies to sell seats and cargo on some of each other's flights.

In many cases it means fewer flights for communities. In the Baffin region, Clyde River, Pond Inlet, Pangnirtung and Qikiqtarjuaq were all serviced by Canadian North and First Air flights.

That's not the case any more; now, Canadian North sells seats on First Air flights to those destinations.

"If you had two flights a day where there weren't the seats filled, it might make sense economically to have one flight," says Karl Moore, an associate professor with McGill University's Desautels Faculty of Management, who has studied the airline industry in Canada.

"On the other hand, it's a basic law of economics that if you have fewer competitors or no competitors, it's very tempting to raise your prices and there is not much you can do about it as a traveller except not travel." 

Identical fare structures

Starting Aug. 18, First Air employees in Ottawa will be checking in travellers on Canadian North's daily flight to Iqaluit. Earlier this year First Air laid off 25 personnel, though many were then hired by Canadian North.

Both companies recently altered their fare structures, changing them to be virtually identical right down to the marketing names, like "saver" fare, "flex" fare and "super-flex" fare. 

They also both introduced a change fee to their beneficiary fares, which are special reduced rates for beneficiaries of land claim agreements of the Inuit groups that own each airline. Under the new rules it costs $75 to change a ticket booked under a beneficiary fare. If the traveller misses the flight, without rebooking it at least two hours before departure, the ticket is cancelled with no refund.

"[Dealing with new rules] is more inconvenient for those of us who are not bilingual," says Grise Fiord resident Larry Audlaluk.

"I can speak English and Inuktitut, but I have a sister who is elderly who doesn't speak English and that's going to be more difficult for her, I'm sure."

Blurring the line

Moore says it's not uncommon for an airline to match a competitor's fares. Since Canadian North and First Air are still two separate entities, he says it's unlikely their practices would ever be reviewed by a regulating body like the Canadian Competition Bureau.

"[Increased co-operation is] blurring the line between who is a competitor and who is a partner." Moore said.

"And that's the concern, that without competition, rates will go up. That will be good for the airline but detrimental for the community."

CBC News contacted both First Air and Canadian North for comment on this story, but neither responded to requests.