Lynx Air, a Calgary-based airline that launched less than two years ago, says it will cease operations on Monday.
The news came as the low-cost airline announced it had sought and obtained an initial order for creditor protection from the Court of King’s Bench of Alberta.
“Over the past year, Lynx Air, has faced a number of significant headwinds including rising operating costs, high fuel prices, exchange rates, increasing airport charges and a difficult economic and regulatory environment,” said the company in a news release.
“Despite substantial growth in the business, ongoing operational improvements, cost reductions and efforts to explore a sale or merger, the challenges facing the company’s business have become too significant to overcome.”
The airline said it will cease operations at 12:01 a.m. MT on Monday, “with flights continuing to operate until that time.”
The company said passengers with existing bookings are advised to contact their credit card company to secure refunds for pre-booked travel. It also directed customers to its website.
Osler, Hoskin & Harcourt LLP are acting as legal advisers to Lynx Air. FTI Consulting Canada Inc. was appointed as the monitor under the Companies’ Creditors Arrangement Act.
Lynx Air’s flight attendants had just joined the Canadian Union of Public Employees (CUPE) earlier this month.
“We’re devastated for our members at Lynx Air and all employees who lost their jobs today,” Lou Arab, communications representative for CUPE, told CBC News.
“We will represent them and defend their rights in these times and we’ll fight to ensure that employees get everything they’re legally entitled to.”
“The company was clear that it’s losing investors and doesn’t have the capital to support continued operations.”
Airline industry is ‘notoriously difficult’
Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, said she suspects airport charges played a major role in Lynx’s decision.
“I think the airport fees as they’re structured makes it hard for discount airlines to be successful in Canada long term,” she said.
“There’s been a confluence of events that’s really put a lot of downward pressure on the airline business… So when you’re a discount player and your margins are even tighter, you’re going to feel the economic headwinds that much more acutely.”
Yedlin calls the industry “notoriously difficult,” citing various post-pandemic challenges such as labour shortages and increased fuel costs.
She says Lynx Air’s announcement is unfortunate for Calgarian consumers hoping to save on travel costs.
“I think the question is, what do we need to do in Canada to ensure the viability of discount airlines?”
Transport Minister Pablo Rodriguez addressed the news via social media on Thursday evening.
In a statement posted to X, formerly known as Twitter, Rodriguez said he is following the announcement closely.
“For any travellers that had a return flight booked with Lynx, I expect Lynx to help you get back home as soon as possible. I expect Lynx to fully refund you if your fare won’t be honoured,” the statement reads.
“My office has been in touch with Lynx, we will continue to communicate with all parties, and we’ve convened calls with other airlines to see how they can help, to ensure that passengers are put first.”
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