Air North will survive the price battle being waged in Whitehorse by Air Canada and WestJet, an aviation expert predicts.
Rick Erickson, managing director of Calgary-based R.P. Erickson & Associates, presented an economic impact study at Air North’s annual general meeting Tuesday evening.
His research showed strong local support for the Yukon airline. Despite the three-way fight underway for the Whitehorse market, Erickson does not predict that Air North will go out of business.
“Yukoners are not going to let it happen,” he said.
This is the first economic impact study completed on the airline. Air North owner Joe Sparling said changes in the competitive environment motivated the study, but he was not surprised by the results. He has long felt that air transportation can be provided locally.
Erickson’s research found Air North’s $76-million value comprises four per cent of the territorial gross domestic product. The company provides 538 jobs across Canada, 375 of them in the Yukon. Air North also works with 254 Yukon businesses. Erickson does not see Air Canada or WestJet offering the same benefits to the local economy. For communities north of Whitehorse, Air North provides a “lifeline” to the south, especially during the winter.
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“Do (Southern carriers) have any interest in Dawson? Do
they have any interest in Old Crow?” he asked. “Never. They’re never coming.”
He believes Air North provides more than economic benefits. North of Ordinary, the in-flight magazine published by Harper Street Publishing, gives local artists national and international exposure, and the airline contributes generously to local charities.
Still, Erickson and Sparling admit it faces unique challenges.
“You do not find almost anywhere else in this country where you have three airlines chasing basically a population base of 25,000 people,” Erickson said. “That’s unheard of.”
On average, nine domestic flights leave daily from the Whitehorse airport. In Regina, with a population roughly eight times larger, 14 flights leave daily. Both Erickson and Sparling see Whitehorse as a place where large airlines can battle with each other to increase their impact in the south.
However, Sparling recognizes Air North is not the only airline hurt by the competition. He says there are simply “way too many empty seats flying around.”
The market cannot sustain three airlines, said Sparling. And Air North’s future may hinge on whether it can strike an interline baggage deal Air Canada or WestJet.
Sparling has seen draft agreements from both airlines. Air North previously had such an arrangement with Air Canada that allowed baggage to be checked once and travel across airlines. Currently, no agreement exists. They were hopeful one would be in place by June 1.
Despite the delays, Spalding remains confident a partnership of sorts will happen. WestJet recently announced code-sharing relationships with China Eastern Airlines and Korean Air. This allows China Eastern Airlines and Korean Air to sell seats on WestJet-operated flights. He hopes Air North will one day enter a similar agreement. “These things unfortunately take a long time,” he said.
Erickson remains convinced Air North provides Yukoners with a quality service that deserves their support. “You’ve got a pretty good product,” he said. “I’d stick with it.”
Contact Meagan Gillmore at mgillmore@yukon-news.com