Is Canadian North losing millions? CEO won’t say

Canadian North CEO Michael Rodyniuk won’t say if his airline is running at a loss.

Nunatsiaq News reached out to Rodyniuk about the health of his company after Makivvik Corp. president Pita Aatami implied the airline is losing millions of dollars during a keynote speech last month at the Northern Lights conference and trade show in Ottawa.

Aatami cited a number of factors including 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 Feb. 10 keynote 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 Corp.

When then-Transport Minister Marc Garneau announced the federal approval of the Canadian North and First Air merger in June 2019, it came with a list of terms and conditions.

That list included no price increases for both passenger travel and cargo delivery beyond those related to operating costs and no reductions to the weekly schedule options on all routes of the airlines’ combined network 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. However, he said the merger has challenged the airline’s operation costs.

He echoed Aatami’s comments about increased costs since 2019, noting that four years ago, the airline and the federal Transportation Department 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.

“But you know, 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.

Michael Rodyniuk is the president and CEO of Canadian North. (File photo courtesy of Canadian North)

Rodyniuk also 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 that individual flight operating costs are around $10,000 per hour.

“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 about what sort of discussions there might be between the airline and Transport Minister Omar Alghabra on the 2019 merger restrictions.

On Jan. 30, Alghabra tweeted that he met with Aatami and Rodyniuk to discuss Canadian North’s operations.

Rodyniuk, who has been the CEO 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.”

Jeff Pelletier, Local Journalism Initiative Reporter, Nunatsiaq News