Canadian North cuts flights, lays off staff

Northern airline Canadian North announced Thursday it is cancelling and scaling back some of its routes, in part because a saturated market in Yellowknife.

Canadian North said it is cancelling flights from Yellowknife to Calgary effective Oct. 10 and cutting flights to Hay River, N.W.T., as of Oct. 25.

The Yellowknife-based airline cites a slowdown in the oil and gas industry in its decision to end the Calgary flights, and not enough passengers on the Hay River flights.

Airlines 'flooded' local market

Canadian North is also reducing the number of flights between Edmonton and Yellowknife as of Oct. 25, blaming competition from Air Canada Jazz and WestJet, which offer similar flights at discount prices.

"They flooded the market with excess capacity. It's created some phenomenal deals for Yellowknife consumers, for sure, but it's not sustainable and it doesn't really contribute to our total northern air service network," Canadian North president Tracy Medve told CBC News on Thursday.

"We are vulnerable to the exploitation of those high-traffic routes by competitors who don't share our commitment to the North."

Canadian North will eliminate Flight 423, which flies five mornings a week from Yellowknife to Edmonton, effective Oct. 25.

It will also reduce Flight 422, which flies from Edmonton to Yellowknife, from six evenings a week to five.

'Can't ride an airplane for cabfare'

Air Canada Jazz began flying to and from Yellowknife in 2006, offering direct flights between the N.W.T. capital and Edmonton and Calgary.

WestJet entered the Yellowknife airline market with similar flight offerings in the summer.

Medve said WestJet's arrival in the N.W.T. has amounted to 4,900 seats a week, with less than half of them being used.

"The fares that are out there are very low, and it got to the point where there were fares in the market at $55 one-way between Edmonton and Yellowknife. Well, if you've ever taken a taxi cab between the airport in Edmonton to downtown, it's about the same price," she said.

"So surely it's understandable that you can't ride an airplane for cabfare. You know, that's not sustainable."

Layoffs coming in Yellowknife

Five Canadian North employees in Hay River are losing their jobs, including two full-time positions and three part time, as the airline closes its base in the community.

The airline says it will lay off more staff in Yellowknife, although officials don't know how many.

Customers who may be affected by the flight cancellations can call Canadian North at 1-800-661-1505.

The airline says it will get in touch with customers who have already booked tickets on the cancelled flights, to either book them on alternate flights or arrange a refund.