The Competition Bureau says if two Arctic airlines — Canadian North and First Air — merge, it’s likely that prices would increase, passenger and cargo capacity would go down and there would be fewer flights.
“The effects of the transaction are likely to include reductions in passenger and cargo capacity, increases in price, and reductions in flight schedules,” the press release said.
The bureau said many communities these airlines serve are fly-in only, so the reduction in competition would hinder economic development, community connections, and the supply of food and healthcare.
Makivik Corporation, the organization that represents Inuit in Quebec’s Nunavik region, owns First Air and operates across all three territories to more than 30 communities.
Canadian North is headquartered in Calgary and owned by the Inuvialuit Development Corporation. It operates flights to 16 communities in the Northwest Territories and Nunavut with links to Ottawa and Edmonton.
The two companies announced their plans to merge in July.
Review process continues
This decision is only one step in the process of reviewing the potential airline merger.
Now Transport Canada has until April 12 to make its recommendations to Garneau. He will make his recommendations to cabinet, which will make the final decision.
There is no deadline on when cabinet has to decide.
The bureau also said in the report that should the airlines put measures in place to address its concerns, the bureau would also assess them for Garneau.
Corrections: The Competition Bureau’s report did not make recommendations on the potential merger but listed possible consequences. A previous version of this story incorrectly stated the report said the airlines should not merge. This article has been updated.
Related stories from around the North:
Canada: Residents concerned by Northern Canadian airline merger, CBC News
Finland: Turkish Airlines to carry tourists to Finnish Lapland through new Istanbul hub, The Independent Barents Observer
Norway: Longer runway for bigger planes in Kirkenes, northern Norway, The Independent Barents Observer
Russia: Airline companies merge in Arctic Russia, The Independent Barents Observer
Sweden: Swedish regional airline Nextjet files for bankruptcy, cancels all flights, Radio Sweden
United States: Alaska Airlines adds restrictions on emotional support animals, Alaska Public Media