NEWS: Nunavut June 13, 2018 – 9:16 am
Consultants recommend a centralized booking tool
A firm hired to study the territory’s medical and duty travel policy has found the Government of Nunavut could benefit from more central management and more transparency from its contracted airlines.
Lufthansa Consulting—a German firm affiliated with the airline of the same name—won the GN’s bidding process last fall to help develop a new airline procurement policy ahead of the territory’s next medical and duty travel contracts.
The GN has estimated the value of its combined medical and duty travel at between $60 million and $65 million a year and wants to trim those costs, while ensuring adequate air service to all Nunavut communities.
Lufthansa Consulting found the process was lacking a centralized booking tool—something all GN departments could use when booking travel, to help the government better track volumes and expenses.
Airlines could also contribute to that by reporting their own data to the GN on a regular basis, the firm said in its report.
Among its other findings:
• Flights booked for medical travel on aircraft are too frequently missed or passengers just don’t show up, which can mean unnecessary expenses or lost revenues to the airlines.
• The market in Nunavut is overserved on some routes, resulting in too many flights flying with too few paying passengers.
• Airlines’ operating costs are high compared to those in other jurisdictions. Airlines in Nunavut have a higher than industry average of flights being cancelled due to mechanical failure. Older model aircraft are also burning higher volumes of fuel, which represents up to 40 per cent of the airlines’ operating costs.
“There are opportunities for the GN to promote more efficiency within the Nunavut airline industry by using its market size influence to the benefit of all Nunavummiut,” the report found.
But before the GN can go ahead and draft a new strategy, the government is seeking input from industry stakeholders to help inform that policy.
The request for input is not a formal bidding process, the GN noted, but still adheres to rules and guidelines listed in the request’s tender document.
The GN has extended its current contracts with airlines until Aug, 31, 2019.
In the meantime, interested parties have until the end of August 2018 to provide their input.
With that feedback, the GN will prepare a request for proposals to go out by November 2018, with plans to award the new medical and duty travel contracts by April 2019.
The new contract terms will be five years in length, the GN said, with an option to renew for two additional terms of two years each.