Thoughts on a 3-Airline Yukon

Posted On February 13, 2012

Like most Yukoners who travel, I got quite excited by the January 30th announcement that WestJet is coming to the Yukon. They’ll be starting daily service between Vancouver and Whitehorse on May 17th. The exciting part wasn’t the fact that we’ll have another airline, it was their introductory fares – $99 each way. That’s much lower than what we normally pay.

Both of the Yukonís existing airlines, Air North and Air Canada Express (still known to most by the previous name, Jazz), very quickly matched WestJet’s low fare. With price no longer an issue, who will Yukoners choose to fly with? What will prices do once the introductory fares end? And what will the effects of WestJet’s arrival be, both in the short and long terms?

Let’s start with prices. Fares vary by the day, by the flight, and there are different levels of pricing on every flight so it’s not easy to calculate. But I started by checking WestJet’s lowest fare from Edmonton to Yellowknife and back, on April 20-23. It’s $278 plus $92.91 taxes, and the flight takes a total of 195 minutes in the air. That’s just under $1.43 per flying minute not including taxes. The Vancouver to Whitehorse and back route takes a total of 280 flying minutes, which would mean a fare of $399.17. plus taxes. WestJet has announced that once the introductory fares end, their fares will start at $358 round trip, though they’re actually at $318 right now). The lower number could come from the fact that it costs more to operate a jet at lower altitudes (takeoff and landing) than at cruising altitude.

Air North’s lowest fare for Whitehorse to Vancouver and back on the same dates is $318 plus $74.26 taxes and surcharge (the surcharge is $18 for fuel). Air Canada Express’ lowest fare for Whitehorse to Vancouver and back on the same dates is $338 plus $75.26 taxes and surcharge (the surcharge is not listed separately). For this random weekend-in-Vancouver date, this puts Air North and WestJet as having the lowest published fares, with Air Canada Express slightly higher.

In my role as a travel agent, I’ve booked 5 flight combinations the past few days. Two were on Air North to Vancouver and back, 1 was Air North connecting to an American Airlines flight from the States, and 2 were cross-country on Air Canada. On both of the cross-country flights, one to London (Ontario) and one to Ottawa, convenience was the primary consideration rather than price, and Air Canada easily won – no single carrier (ie WestJet) or combination of carriers (Air Canada, WestJet or Air North) could match their schedule.

Let’s move into the long-term effects of having 3 airlines. The first fairly small effect is that funding was approved a few days ago for construction of a second jetway at Erik Nielsen Whitehorse International Airport. The $500,000 project will start as soon as the weather allows.

What about the largest probable effect, on jobs? To Air Canada and WestJet, the Yukon market is a drop in the bucket – Whitehorse represents about one quarter of one percent of all of the enplanements and deplanements in Canada. Either of those companies could leave tomorrow and other than a small number of local jobs, there would be no effect on the companies. WestJet has just posted job openings for Whitehorse, and the Customer Service Agent positions are not only Casual, they’re on 6-month contracts.
Air North is in a very different situation – all they do is serve the Yukon, and they have 168 full-time employees (a total of 219 including part-time positions). With a payroll of more than $9 million, that’s almot 1.5% of the total private-sector employment in the territory.

Air North has always given Yukoners great service – since they began their jet operation in particular. When Jazz’ little CJR jets can’t fly because it’s too cold, Air North will run extra flights to get people home. When a hockey team has too much bagage, they’ll put on a extra flight just for hockey bags! Cathy and I have sat in the airport restaurant and watch Joe Sparling, the guy who owns the jets, humping baggage into the belly of a jet that’s getting ready to leave.

Air North has a very active Facebook page, and as part of their 35th anniversay celebrations are gathering stories about people’s “best Air North experiences”. Even discounting the fact that 35 winners are getting free flights, the local support of the airline is clear.

The Whitehorse Star posted an opinion piece about Air North on the 10th that’s unfortunately only available to subscribers. It includes this statement:

This grim game of airborne chicken – neither airline can stash away money at $99 per flight, toting expected acres of empty seats – will begin in May. Its outcome will establish a stark, major statement about Yukoners’ propensity to be more impressed by limited-time, cut-rate fares from a southern carrier, or to help ensure an important member of the territory’s corporate community continues to fly high.

October 26th is the final scheduled WestJet flight so far, though their intial interviews hinted at continuing on with winter service. My forecast is that WestJet is going to have a much tougher fight here than they expected, and that they won’t run winter service or be back next year.