Airline company GoSarvaq blames competition's seat sales for failure to launch

Folded airline companyGoSarvaqis blaming dramatic drops in prices by competitorsFirst Air and Canadian North for killing its discount air service between Iqaluit and Ottawa, saying that prices available during a recent seat sale were "not a part of [their] business model.

• Discount company GoSarvaq folds 2 weeks before first scheduled flight

"Who could have predicted that the incumbents in this market were going to drop their price by more than 75 per cent?" saidGoSarvaq'sAllan Hayward.

He said the seat sale prices announced by First Air and Canadian North resulted in a significant number of passengers calling for refunds.

"We had a price, we were sticking to that price. We wanted to provide service, but we can't compete at those prices."

Although he stopped short of saying his competitors' actions werepredatory, Hayward did sayGoSarvaqwas reviewing legal options and speaking with the Competition Bureau.

'We had to respond'

Bert van derStege, First Air's vice-president ofcommercial, said Monday thathe wasn'tsurprised byGoSarvaq'sfailure to launch, adding that announcing an airline is easy, but running one long-term is much harder.

"We had to respond, we had to react when we saw this attempt bySarvaq," said van derStege."We launched attractive seat sales.

"It's a free market, it's based on supply and demand and that's the business sense that prevails," he added.

Van derStegesaid thatFirst Airwill continue to offer competitive seat saleprices as the market dictates.

However, despite his company's failure,Hayward believesGoSarvaqhad a positive impact onNunavut'saviation market forcing the competition to offer cheaper airfares.

Refunded customers frustrated

Although GoSarvaq says that it has issued full refunds to all customers who purchased tickets, passengers who banked on the company say they are frustrated with the additional costs the changes have added to their travel plans.

"I was naive as a consumer, ordering with the one new airline when they hadn't even had a flight yet," said MadsSandbakken, who had booked tickets from Iqaluit to Halifax on GoSarvaqfor himself and his three sons. The family will then head to Norway to visit family.

"I'm looking at a bump of over $4,000, and that's only to Ottawa," he said."Then I'll need tickets to Halifax, and a hotel room for the night, I'm guessing. So all of a sudden it's almost double my budget."

The news that GoSarvaq has foldedhas hit customers such as Sandbakken, who find themselves with few options, hard.

"You feel lost, you feel small," he said. "You feel like you don't have a say."