Canadian low-cost air carrier Lynx, an equivalent to Spirit Airlines or Frontier, will shut down and has encouraged ticketed passengers to contact their credit card companies because it will not be issuing any refunds…
Canadian Budget Carrier Lynx Will Shut Down Operations February 26, 2024 – No Refunds Offered
Alberta-based budget carrier Lynx, which began in 2022 and offered service to cities within Canada and to the United States and Mexico, will shut down on February 26, 2024 at 12:01 am MT. It has a fleet of eight Boeing 737 MAX 8 aircraft. Earlier this week, it entered insolvency protection and received court approval to wind down operations. It said that industry headwinds were “too significant to overcome.” Those included:
- rising operating costs
- high fuel prices
- exchange rates
- increasing airport charges
- a “difficult” economic and regulatory environment
I’m not up to date on the nuances of Canadian law, but insolvency protection is different than bankruptcy protection. Under the federal Companies’ Creditors Arrangement Act, Lynx will be able to restructure debt and pay off some creditors without filing for bankruptcy.
Recently, Lynx has defaulted on a number of creditors, including Montreal and Toronto Airports and Delta Air Lines
It was just last week when flying into Toronto and pulling up next to a Lynx plane that had also flown from Los Angles to Toronto that I remarked to my son that we should give Lynx a try next time.
Perhaps that particular route provides a good example of why Lynx could not make it. It goes head-to-head with Air Canada, Porter, and WestJet on the same route…(and this also explains why Porter flights were so cheap).
Consumers won’t benefit from this, though budget carrier Flair continues to fly.
500 employees stand to lose their jobs.
Concerningly, although Lynx has cash and assets on hand, it is not issuing refunds to impacted customers. It has essentially urged ticketed passengers to file a chargeback with their credit card company:
Any future travel booked and paid for, the monies are held by your financial institution prior to travel, your credit card will be able to reverse the charge and refund your payment.
While I would not get my hopes up, I am cautiously optimistic that a Canadian court will order that part of its assets be used to refund consumers who are now left without tickets.
CONCLUSION
Canadian budget carrier Lynx will shut down and is not offering refunds to passengers who have purchased tickets. It is a tough time for budget carriers in North America and Lynx’s struggles parallel the staggering losses budget carriers in the US have reported during a period of profitability for mainline carriers.
Operations are normal today, but Sunday will be the last full day of service.
Were you impacted by the Lynx shutdown?
The british system, bk is like our chapter 7
Canada’s civil law system is more like the US than the UK
A week or two ago, there were reports that Flair was going to acquire Lynx but it appears that it did not.
Flair?
They’re in even worse shape than Lynx.
The difference is Lynx had some adult supervision in PHX, (Indigo), who, after blowing through their C$100m investment and incurring a cumulative net loss of over c$200m as of mid Feb, knew enough to know when the jig was up and do an orderly shutdown to protect their reputation.
That’s not the case at Flair, who have 20 tails, (18 operating and 2 with Bonza, and apparently not coming back). When the demand letters start arriving, they’ll shut down without any notice.
Flair is out of cash, with 777 Partners no longer having access to 777Re funds or Haymarket Insurance, both of whom are under investigation by respective authorities in Bermuda and Utah respectively. Google it.
As of April 1, Flair’s bill to the Canada Revenue Agency increases from about $220k a month to $1,560,000 a month and that continues until January 2029 when they’ll have paid off that dept, which will amount to a total of $89m including interest. But they’ll be a distant memory long before then,
I doubt they’ll male it through the next 3 weeks without another $35-40m cash injection, and it’ll have to be Cdn sourced to stay on side of Canadian law. Lynx last $200+ million. How many investors will want anything to do with Flair who have the identical business plan?
Flair are losing about $1.7m a day.
Lynx took $20m from Indigo in Jan and Feb and its all gone. Flair has 18 tails operating, 2x the size of Lynx.
If you don’t know what you’re doing, you can lose staggering amounts of cash running an airline.
I don’t understand this obsession with sitting next to your spouse or partner for an airline flight. You all have the rest of your life to be in close contact with your wife as she spends hours on her phone texting with superficial friends or watching foolish Tik Tok videos.
What a fantastico point.
I’m sure the banks aren’t happy about the direction to consumers to dispute charges. TD, one of Canada’s big 5 banks, now even has a notice at the top of its login page: “For customers looking to dispute a Lynx Air transaction, please submit a transaction dispute request. This is faster than calling our Contact Centre.”
They should reach out to the United States Govt. for a bailout.
@Stuart
+1
‘Any future travel booked and paid for, the monies are held by your financial institution prior to travel’.
Is that actually true? Sounds really dodgy- so, if I use my UK MasterCard, or even Italian non-resident Visa Debit card, to purchase a domestic flight in Brazil, the bank will not be handing the money over to the airline until after they’re satisfied I have actually used the flights? It sounds ridiculous – could there be a Canadian regulation stipulating that for their own carriers?
As per Robert (Bob) Crandall (former CEO of AA) concerning airline deregulation:
“A lot of people came into the airline business. Most of them promptly exited, minus their money,”
Flair’s operations were anything but normal on Sat Feb 24th.
They didn’t operate any flights into the US, knowing that Delta Technical Services would, at best, not service the aircraft and at worse, have the aircraft seized.
Lynx operated 27 sectors on Saturday Feb 17th, generating 8,075,781 asms.
They operated 9 sectors on the 24th, generating just 2,572,101 asm’s.
It’ll be even worse today as all aircraft will find their way back to either Toronto, or more likely Calgary where WS will be talking to the Lessors and kicking the tires.