Major discount airline shutting down in Canada

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Published February 22, 2024 at 10:00 pm

Airplanes carrying covid to Pearson Airport in Mississauga

Lynx Air, a Calgary-based low-cost airline that launched in the fall of 2021 and welcomed its first customers less than two years ago, is shutting down operations as of Sunday night at midnight.

The airline cited the “compounding financial pressures” from inflation, fuel costs, exchange rates, cost of capital, regulatory costs and other economic factors as the reasons for the company’s closure.

“The competitive tension in the Canadian market have ultimately proven too steep a mountain for our organization to overcome,” the airline said in a message to its customers. “It is with a heavy heart we leave the skies. We hope in our absence that our vision to ‘Inspire ‘More Canadians to Fly’ leaves its mark on our passengers.”

Lynx Airlines, which had its inaugural Toronto-Calgary flight in April of 2022 and its first flight out of Hamilton in late June of that year, has obtained creditor protection from the Court of King’s Bench of Alberta.

The company said it had put in “tremendous work” into expansion over the past two years but despite substantial growth in the business 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 honour the “majority” of its flights this weekend, noting “our passengers are our priority.” Passengers on any cancelled flights will be notified by email.

Passengers booked on flights on or after Monday, February 26 are asked to contact their credit card company for a refund. Lynx Air’s contact centre will not be available to assist with refunds after this weekend.

The airline thanked its customers for their loyalty during the past two years.

“Thank you for supporting us in our journey – we are as disappointed as you are. We are thankful for the loyalty of our passengers who valued our ultra low-cost carrier model. We know this is a shock to many and our goal is to make the wind down of our operations as seamless as possible. It has been a privilege to serve you.”

Merren McArthur, who had worked with several airlines in Australia including as CEO ultra low-cost carrier Tigerair Australia, was brought in to run Lynx Air as the pandemic was winding down.

“We are excited to bring competition and choice to the Canadian aviation market at a time when Canadians are yearning for the opportunity to fly again,” he said at the launch.

Osler, Hoskin & Harcourt LLP are acting as legal advisors to Lynx Air. FTI Consulting Canada Inc. was appointed as the monitor under Companies’ Creditors Arrangement Act.

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