Exchange Income Corp.’s $205-million takeover of Canadian North airline offers a lifeline to a struggling carrier while bolstering the Winnipeg-based purchaser’s stable of regional airlines.

Should the deal get regulatory approvals, Exchange Income will gain routes and aircraft to complement its aviation businesses in the North, a region marked by high operating costs, vast distances and a sparse customer base.

“The routes flown by Canadian North are highly complementary to our existing routes, as there’s essentially no overlap,” Michael Pyle, EIC’s chief executive officer, said on a call with analysts on Thursday.

The deal, announced Monday, is subject to approvals by the Competition Bureau and Transport Canada. The companies said they expect approvals to be granted this year.

Barry Prentice, a transportation professor at the University of Manitoba, said EIC is buying a struggling airline that faces high costs, harsh operating conditions and a small population.

“I think they were in bad shape,” Prof. Prentice said of Canadian North. “It’s a really tough business. It’s even tougher when you’ve got thin markets.”

He said EIC is an experienced aviation company with several airlines that fly in remote parts of the country. The company is known as a good operator with smart managers who should be able to revive Canadian North, he added.

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EIC employs more than 8,000 people at 19 subsidiaries. Its main business, aviation, includes Pal Airlines, Calm Air, Custom Helicopters and Perimeter Aviation, as well as medevac flights and pilot training. Its manufacturing segment includes metal fabrication and windows.

In 2024, EIC’s profit was $121-million, down by 1 per cent from the previous year. Sales rose by 6 per cent to $2.7-billion, led by the aviation and aerospace businesses, compared with 2023.

Mr. Pyle, who was not available for an interview on Friday, told analysts Canadian North’s business is a familiar one.

“We’re taking a business that flies beside ours, but services the same kind of customers, brings the same freight in, deals with the same people. This is not new. And so we’ll follow where Canadian North is and then bring EIC’s inherent advantages of size to the table, and that will enable us to get to the returns we expect,” Mr. Pyle said. “One of the cool things about this deal that typically is not the case, in fact, is never the case in aviation: Our purchase price is essentially fully backed by the assets.”

Northern airlines are vital to people in the region, which often has no road access, especially in summer. The airports, with the exception of about four, have gravel runways. Such landings are hard on aircraft, driving up the costs of maintenance and replacement parts, which must travel great distances and bear unfavourable U.S. currency premiums, Prof. Prentice said.

Inuit-held Canadian North is owned by Makivik Corp. and the Inuvialuit Development Group. It has a fleet of 34 leased and owned aircraft, including 19 Boeing 737s and 14 ATR turboprops, according to FlightRadar24. The airline flies to 24 communities in the Arctic and Northwest Territories from Ottawa and Edmonton, and charters flights in Alberta and B.C. for customers in the natural-resources industries.

CEO Shelly De Caria, who became the carrier’s first Inuk chief executive officer in 2023, called the airline a “lifeline connecting families.” “I am from the North; I believe in the potential of the North and I recognize that the North is critical to the future of our country,” she said in a statement. “Having a strong parent company with roots in Northern aviation is critical to our success.” Ms. De Caria was unavailable for an interview on Friday.

In 2019, the federal government approved a merger between Canadian North and First Air, despite warnings from the commissioner of competition that the deal would lead to higher airfares and poorer service. The approval came with terms designed to protect the public interest. Those terms were loosened in the pandemic – when Canadian North was given $138-million in taxpayer aid – and again in 2023 to allow it to remain financially viable.