The parent companies of Canadian North and First Air – the dominant airlines in Canada’s sparsely populated Arctic – have completed their negotiations and will spend the next 18 to 24 months merging the two Inuit-owned companies into an operation that will have a monopoly on most of its routes.

“We are embarking on an exciting journey and our destination will be a stronger and more sustainable airline, focused entirely on providing safe and friendly passenger and cargo service to the people, organizations and communities that depend on us,” said Chris Avery, President and CEO of First Air who will serve as leader of the merged organization.

“We understand that our actions touch many lives, so we will maintain a ‘community-first’ approach throughout this integration, which includes carefully considering the essential needs of our customers when making decisions, communicating clearly and listening for feedback,” said Avery in a statement.

The merger was approved by Canada’s Transport Minister in mid-June, despite objections raised by the Competition Bureau.

The first step towards operating under a single Canadian North brand will be to merge routes and flight schedules, to eliminate duplication where possible. The Minister has set a number of conditions in allowing the merger to proceed. Among them, the new airline will have to maintain days of service to dozens of communities. Fare increases will also be capped for the next seven years.

The unified company will operate under the Canadian North brand, using First Air livery. It will also use Canadian’s Aurora Rewards which has links to Air Canada’s Aeroplan frequent flyer programme.

The company aims to be a top employer, with an emphasis on recruiting Inuit and other Indigenous staff. Employees will start working together in the coming months. “This will be a gradual process that will be completed hand-in-hand with other milestones such as combining flight reservations systems, fare products, operational processes, fleets and facilities,” the company said.

As it starts flying unified routes, executives say aircraft will be redeployed to Canadian North’s existing charter operations. “This diversification will enable continued growth and evolution, regardless of economic conditions,” they say.

After the merger, only a few companies will operate passenger flights in the North. Canadian North will concentrate on the Northwest Territories, and Air North flies largely within the Yukon, with one route linking Whitehorse, Yellowknife, and Ottawa.

Canada’s major carriers, Air Canada and Westjet, only operate a handful of routes into the North; Air Canada from Vancouver to Whitehorse, Westjet from Calgary to Whitehorse on select days, and both fly from Edmonton and Calgary to Yellowknife.

It is unsure if other airlines will step up to compete with the new Canadian North. Barriers to new airlines starting up are high, with huge distances between small communities and limited access to airports, equipment, and fuel. Canadian North will, however, have to give new airlines access to resources for the next five years.