Competition Bureau 5T/7F

[thirdtimecharm]

http://www.nunatsiaqonline.ca/stories/a ... _airlines/

Interesting development in the whole Northern Codeshare story.

If... and yes this is a big if... The Competition Bureau rules the codeshare null and void, it will make for a very interesting situation, I think.

A few years ago, Norterra (Canadian North's owners) entered into a process to buy First Air. After months of negotiations the deal fell through but it laid the groundwork for a fairly equal arrangement in the code share and both airlines returned to some sort of profitability in their scheduled operations.

Since that time, however, everyone is much more aware of Norterra's fairly dire situation. They have had to pay out their Nunavut ownership, their shipping company NTCL is in bankruptcy protection and the remaining businesses are all fairly tied to the Oilsands, which has had its share of problems. The bankruptcy at NTCL has shown that there were significant guarantees within the family and Canadian North will take some sort of hit through this.

Their proposed purchase of First Air now looks like it was a bluff and a good strategic move on their part.

But now, could this be a do-over for First Air? If they are back in a competitive situation with Canadian North, they now realize that they have overestimated their opponent and can go in for the kill, at least on the scheduled service side of things.

Will be interesting to watch.

[fish4life]

The interesting part is that First Air is in a poor financial situation themselves, the wild card in all this is Calm Air with the backing of EIC and it's massive war chest should they need to do a large purchase of capital overnight.

[dhc#]

http://www.cbc.ca/news/canada/north/can ... -1.3839926

http://www.cbc.ca/news/canada/north/no- ... -1.3836638

http://www.cbc.ca/news/canada/north/can ... -1.3837193

[swordfish]

I'm always boggled at how many posters here know what kind of financial shape these 2 airlines are in, and the in-depth history of the purchase that fell through. You guys should be employed as industry analysts so I can see you pontificating on CBC and CTV television...

The North is a way better place to live because of these 2 airlines. They support all the communities they serve in many unsung ways, employ local people, and supply service in demanding operational conditions:

• long distances between destinations without convenient alternates
  long distances between fueling options
  erratic, undependable, and variable weather conditions
  small communities that need to be served by combi aircraft to diversify revenue sources
  gravel operations
  little or no support infrastructure in the communities

Up North, everybody depends on everybody else - including the airlines. You may "compete" but you've still got to work in an environment of cooperation. I've lived "up North" for a long time, and the hospitality, support, and cooperation I have received has been integral to the work we have been able to to. Things have changed little in 44 years.

People cry about the prices they have to pay, but the truth is these prices ensure the continued operation of each of them, and some of it goes right back into the communities. I don't know what proportion, but compare that with Westjet or AC who milk the ZF-EG-YC route and give virtually nothing back to the NWT at large.

When they advertise they are "Seriously Northern" and the "Airline of the North"....they mean it. We lead a more civilized and easier life because of them, with exceptional service and connections to Southern Canada.

The "Competition Bureau" needs to factor these things into their Ottawa-based decisions. I hope they have been up here for a visit, or lived here for a while, to understand the unique industry conditions that exist north of 60.

[swordfish]

Did I forget to mention that the people they have working for them are exceptional also - friendly, helpful, cooperative, understanding, and patient. They are dedicated to good service and OTP. Now I haven't seen every person but I HAVE been to every station they serve, and there's a lot of uniformity among them all.

[godsrcrazy]

First air is Cancelling their code share agreement with Canadian North. http://www.cbc.ca/news/canada/north/fir ... 02?cmp=rss

[Donald]

First air is Cancelling their code share agreement with Canadian North

Standby for the next announcement from First Air......

[plhought]

Must have been some interesting chatter at the ATAC conference this week...

[dhc#]

And what about the other code share agreements with Calm Air and Air North??

Pretty sure they are wondering what 7F has up their sleeve...

[thirdtimecharm]

And what about the other code share agreements with Calm Air and Air North??

Pretty sure they are wondering what 7F has up their sleeve...

The Calm Air one is different because Calm Air purchased First Air's Winnipeg/Kivalliq operation. Not as messy as the other ones.

[fish4life]

Ya it was a a straight up wet lease in exchange for them pulling out of the kivalliq region that was masked as a code share.

[dhc#]

Ok, and whats with the CPA 7F has with Summit Air to do their western arctic jet runs ? Why doesn't 7F do their own flying, they have enough aircraft in the fleet according to the last press release.

[plhought]

Ok, and whats with the CPA 7F has with Summit Air to do their western arctic jet runs ? Why doesn't 7F do their own flying, they have enough aircraft in the fleet according to the last press release.

I suspect the loads are a little light for the 734, and the -200's are getting a little long in the tooth. Probably cheaper to sub it out to Summit.

[dhc#]

CDN North response to First Air ending the code share.

http://myemail.constantcontact.com/New- ... LJhWENRlDk

Another article about First Airs decision

http://www.nunatsiaqonline.ca/stories/a ... _air_boss/

And another viewpoint on both airlines

http://www.nunatsiaqonline.ca/stories/a ... _airlines/

[fish4life]

The viewpoint on the "failing airlines" article seemed to have done some of their own research which is nice. If the government wants cheaper prices why doesn't every airport have LPV approaches ? That would be a big start.

Some contract requirements like jet service between YWG and YRT resulted in over capacity and needless equipment doing the run.

I think First Air also played Canadian North like a fiddle "oh let's do a codeshare" meanwhile they just needed to buy some time while they got the 500 series ATR's up and running. I wouldn't even be surprised if they are trying to convince the GN that the medical contract requires aircraft not older than _____ number of years so that they are the only ones able to meet it.

[dhc#]

Uh oh, maybe more bad news for 5T.

http://www.cbc.ca/news/canada/north/deb ... -1.3898484

[palebird]

The bankruptcy of NTCL is probably the final nail in the coffin for Norterra and it's little group of companies. $140 million is a a substantial chunk of money to be on the hook for. Good luck.

[FICU]

Finally resolved and 5T no longer has to help support the debt of NTCL... Onwards and upwards!

http://www.irc.inuvialuit.com/news/idc- ... ufacturing

[palebird]

I very seriously doubt that they have been allowed to walk away from the NTCL disaster that easily. That just sounds like marketing sleaze.

[dhc#]

Northern version of 3 card monte ?

[FICU]

I very seriously doubt that they have been allowed to walk away from the NTCL disaster that easily. That just sounds like marketing sleaze.

What has happened to Noterra and NTCL under CCAA... who knows but 5T is now owned by the IDC and no longer has to help pay the debt of NTCL.

[dhc#]

Resolved.....wonder if they will try the code share again....

http://www.cbc.ca/news/canada/north/com ... -1.4257370

[Marinth]

Resolved.....wonder if they will try the code share again....

http://www.cbc.ca/news/canada/north/com ... -1.4257370

Likely not, rumor has it Canadian North just lost the co-op contact. First Air didn't pull out of codeshare because they were worried about the competition bureau. They pulled out because they saw an opportunity to let Canadian North fail.

[pelmet]

How long has 5T had the co-op contract. Was it for the entire arctic?

[dhc#]

Reduction in frequency on some northern routes according to 5T's latest schedule effective Sept 7th.