Is Canadian North losing millions of dollars?
Canadian North chief executive Michael Rodyniuk won’t say if his airline is running at a loss.
Nunatsiaq News asked Rodyniuk about his company’s health after Makivvik Corp president Pita Aatami implied the airline is losing millions of dollars during a speech at an Ottawa trade show last month.
Aatami cited factors like Covid-19 travel restrictions, increased fuel prices, and federal restrictions related to the 2019 merger of Canadian North and First Air.
“People think that, ‘Oh, they’re the only airline, they’re making millions.’ Instead of making millions, we’re losing millions,” Aatami said in his February 10 speech.
“We’re trying to get support from the Government of Canada to see if they can revisit the conditions that we had to meet, and we’re still working on that.”
Canadian North is jointly owned by Makivvik and the Inuvialuit Development Corporation. Nunatsiaq’s report is republished here by Cabin Radio under a Local Journalism Initiative agreement.
When then-transport minister Marc Garneau announced federal approval of a Canadian North-First Air merger in June 2019, it came with a list of terms and conditions.
That list included no price increases for passengers and cargo beyond those related to operating costs, and no reductions to weekly schedule options for seven years, among other restrictions.
Rodyniuk – who was present at Aatami’s speech – would not directly answer whether the airline is running at a profit or at a loss.
He echoed Aatami’s comments about increased costs since 2019, noting that four years ago, the airline and the federal government could not have predicted a pandemic, a war in Ukraine and record-high inflation.
“We’re not in the wildly profitable stage of the company, for certain,” he said.
“At the same time, the good news about our company is we’re diverse enough that we have other streams of revenue that can cover off the other parts of our business that are not as efficient.”
He said his company continues to talk to Transport Canada to “eke out a profit” within its restricted operations and said the government is always open to working with the company.
Rodyniuk disputed any assertion that Canadian North has zero competition in the North, despite some round trips costing thousands of dollars.
He named a list of other airlines that operate in the North, and said individual flight operating costs are around $10,000 per hour.
More: Cabin Radio’s December 2022 interview with Michael Rodyniuk
“If I fill that airplane with 100 people, and I fill it three or four times a day, I’m going to make a profit. If I fly it once a day and I only fill it with, say, 20 people, then those 20 seats have to cover the cost of that airplane,” he said.
“The fares in the North are relatively higher than what you’ll see in the south, but that’s because there’s so much thinner market in the North, and you can get a higher fare, but you won’t be able to fill your airplane and that’s going to cause losses for companies.”
Transport Canada has not yet responded to questions about how much federal financial support Canadian North has received, or any discussions between the airline and transport minister Omar Alghabra about the 2019 merger restrictions.
On January 30, Alghabra tweeted that he met with Aatami and Rodyniuk to discuss Canadian North’s operations.
Rodyniuk, who has been the airline’s chief executive for just under a year, said his company remains strong.
“We’ve been around for 77 years now,” he said.
“It’s going to be, I believe, at least another 77 years of very good, prosperous operations.”