Thursday, April 21, 2016

Fight or Flight

So on Monday an airline war broke out, resulting in a seat sale unlike anything that's been seen in Iqaluit in years.

And social media immediately broke out into outrage. In fact, it's safe to say you've never seen so much anger and seething rage over a seat sale.

So in one corner we have the usual gang - First Air/Canadian North. In the other corner a new airline that is in the process of starting up - Go Sarvaq.

Go Sarvaq is a bit of a weird airline. They're working with another airline, Flair Air, and booking seats on those planes when they fly in. I don't pretend to understand all of it. And they had a rocky start. They originally were Fly Sarvaq, but had to change their name due to the government regulations. Their website didn't work for weeks, and people were calling to reserve tickets, but often weren't getting responses back. All of this and the airline is scheduled to start next month.

So a shaky start, sure. On the upside they announced an introductory fare of $499 each way to either Ottawa or Halifax. So that got a lot of attention. And people were eager for some competition. I understand for the average person a $1,000 return plane ticket does not sound like a fantastic deal, but considering the average plane ticket for the last two years has been around $2,400, then yeah, saving $1,400 is a pretty good gig.

(Caveat: Airline tickets are never that straightforward in Nunavut. There are all kinds of discounts. Government of Nunavut employees get them, teachers do, Government of Canada employees, staff of Inuit organizations, Inuit beneficiaries. You have to be special not to qualify for one. But even with those discounts, tickets are still around $1,500-$1,800, which has gone up).

So when Go Sarvaq finally got their shit together, and their website up and running and booking tickets, Canadian North/First Air reacted pretty much the way you expected. Except they didn't. Most people expected them to match Go Sarvaq's fare. They actually undercut it - $399 each way or $798 return. But even that was weird because when you went to book a ticket, the final return fare was $740.

To put that in perspective, we've lived in Iqaluit for nearly 11 years now. Only once have I seen a seat sale better than that, and it was a 12 hour flash sale for around $650. This one is going to last a couple of weeks. And just when people are booking their summer vacation plans.

The howls come from the fact that is not even a remotely subtle attempt at bankrupting Go Sarvaq before it gets going. And let's be clear, it is. You can talk "protecting your market share" or "being competitive" all you want, but Canadian North and First Air are essentially the same airline at this point, what with the highly unpopular codesharing and all.

Also rubbing people the wrong way as both airlines crying poverty just a few months ago when called before the Legislative Assembly to explain why tickets were so expensive and the quality of service in decline. Now, magically, a few months later they can apparently cut ticket costs by two-thirds in advance of one of their busiest times of the year.

There have been a lot of people pleading on Twitter and Facebook that people should bite the bullet, spend the extra couple of hundred dollars on Go Sarvaq. That if the First/Canadian succeed in bankrupting Go Sarvaq then plane tickets will bounce back to their old $2,400 levels pretty quick. I'd argue that's not true. I'll bet money they go higher as they try to recoup money lost in their little war to drive their new rival out of business before it finds its feet.

(Also, it should be noted, it's not as simple as battle over the Iqaluit-Ottawa route. Canadian/First also fly into other communities, Go Sarvag doesn't. That affects the economics of things as well)

I'm pretty pissed with Canadian/First. Standard business practice and all, but they're trying to protect their fiefdom and it's not a particularly enjoyable feeling being the serf when you're trying to book plane tickets. My only gripe with Go Sarvaq is the terrible roll out they had. They got a little too eager to announce, didn't have things in place, and didn't communicate what was going on very well, which gives me pause about them.

But I think Go Sarvaq is just the harbinger. Even if they hadn't entered the competition between Iqaluit-Ottawa (and good for them adding that once a week Iqaluit-Halifax route), I still think competition is coming. Iqaluit's sparkly new airport opens next year. And when it does I will not be the slightest bit surprised if WestJet, Air Canada or Air North takes a crack at the route. The other two Northern capitals have multiple carriers beyond First Air/Canadian North. It's only a matter of time before it happens in Iqaluit.

Then things will get interesting. And hopefully a little cheaper. And hey, if you ever wanted to come up and visit us, now's the time.

Last Five
1. Open all night (live) - Bruce Springsteen
2. This sad song - Alison Krauss and Union Station
3. It's hard to be a saint in the city (live) - Bruce Springsteen and the E Street Band
4. Bluish - Animal Collective
5. Twined and Twisted - Valerie June*

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