WestJet would have more difficulty penetrating Whitehorse's air travel market than it did Yellowknife's, according to the president of the Yukon's airline.

Reacting to news WestJet is considering adding Whitehorse to its growing list of destinations, Air North president Joe Sparling said he is uncertain passenger volume could keep three major operations viable.

"Yukon's a small market," Sparling told the Star this week. "And there's only so many seats a year that the market would support."

After announcing summer service from Yellowknife to Edmonton and Calgary, WestJet sparked a minor price war. Would-be competitors Canadian North and First Air dropped their fares more than 50 per cent during the same time period.

But Sparling said that because Whitehorse's air travel market is half that of Yellowknife's, adding more flights from here to southern hubs could actually have the opposite effect on fares.

"It's a business of margins," said Sparling. "If there are too many seats and the average load factor falls, the margin can shrink or evaporate, and the only way to retrieve it is to cause fares to increase, and that will have a negative impact on travel. It's a tricky balance to achieve."

So could the cost of air travel actually increase? It depends on each airline's load factors.

Load factor is the percentage of seats sold on each flight. Since Air North introduced jet service in 2002 from Whitehorse to Vancouver, Calgary and Edmonton, its loads have increased 25 per cent, allowing prices to drop by roughly the same amount.

Sparling said lower airfares helped increase passenger volume to near peak levels, but with a recession looming, load factors are expected to take a hit.

When Air North jumped in to compete with Air Canada six years ago, the number of seats available in and out of Whitehorse climbed to 207,000 from 151,000, annually. Today, that number has reached 273,000.

Sparling said if another airline entered the fray, with economic uncertainty on the horizon and load factors cresting 75 per cent, something would have to give.

"You're not going to see six flights a day out of here but if (WestJet) put some seats on the market, somebody will have to take some seats out of the market," said Sparling.

A week before Christmas, WestJet spokesman Robert Palmer told the Star that WestJet could be flying the Yukon's friendly skies as early as the summer of 2010.

However, the number of planes in WestJet's fleet, rather than load factor, is what has kept the discount carrier from attempting to penetrate the Yukon market.

Currently, WestJet serves 55 destinations with 76 aircraft. With more planes on order from Boeing, the Calgary-based airline expects to grow its fleet to 121 over the next five years.

"When you only have so many planes, you can only service so many centres," he said, adding once the company takes delivery of more planes, it can expand service.

"There's no specific dates but Whitehorse is definitely on the radar."

If WestJet were to serve the Klondike, two successful summer seasons would precede any permanent, year-round service, Palmer said of strategy.

"We'd want to make sure it's sustainable over the long haul," he added.

But summertime is the most profitable time for airlines already serving Whitehorse.

Lining up with Air North as competition to a possible WestJet incursion would be Air Canada Jazz, which operates two flights daily from Whitehorse to Vancouver during the fall and winter, compared to Air North's single daily return trip.

During peak tourism periods, Sparling said the Jazz/Air North West Coast corridor flight ratio is 3:2, and is concerned another competitor could cut into the profits of both Jazz and Air North.

However, the possibility of a third airline jockeying for a slice of this business does not faze Air Canada spokeswoman Angela Mah.

"Air Canada has been serving the Whitehorse market for decades and we compete very well in all the markets we serve," said Mah.

"And the one thing we offer Whitehorse (that WestJet could not) is connections to Air Canada's worldwide network; it's really one-stop shop."

But with online booking making it easier to organize connecting flights, it remains to be seen how big a factor Air Canada's global links would play.

While Mah touts Jazz's sisterhood with the nation's air carrier giant, Sparling is confident his baby can rely on regional loyalty and solid product positioning.

"Don't forget, one in 15 Yukoners is a shareholder in this company and we certainly count on that to preserve our share in the market. That's been the key to success for us," Sparling said of what allowed Air North to get a foothold while competing with a much larger rival.

"Our local shareholders have played a really big part and had a tremendous amount of influence on friends and business associates that choose to travel here."

When Air North made its first offering of shares, they sold for $5,000 each, and included the annual equivalent of two round-trip tickets to anywhere the carrier flies.

Last spring's second offering by Air North saw its share value increase to $7,500, and the more than 600 available were scooped up in less than a week.

In addition to four turboprop planes, Air North operates with three Boeing 737 jets.