Amid rumours of a merger with Flair Airlines, of which reports of an announcement expected last week, Calgary-based low-cost carrier Lynx Air is shutting down operations in Canada citing financial pressures and unfavourable headwinds,as the operations will cease on Monday.
In a memo, as shown below, to staff, COO Jim Sullivan said that the airline has filed for creditor protection from the Court of King’s Bench of Alberta under the Companies’ Creditors Arrangement Act (CCCA). The company’s fleet will take to the skies for the final time Sunday.
The unconfirmed communication sent to employees Thursday evening that says
"today we filed for protection from our creditors under a CCA filing over the next three days we will continue to deliver a great travel experience to our customers, but we will cease flight operations after the completion of Sunday’s flight schedule."
In his communication, the COO made it clear that the compounding financial difficulties brought on by sky rocketing inflation, fuel, capital and regulatory costs, coupled with adverse exchange rates and “competitive tension in the Canadian market” is bringing down the company.
Launched in Calgary in November 21, Lynx Air was ambitious with its ultra-low-cost approach that promised an alternative to bigger carriers, with an aim “to make air travel accessible to all Canadians.”
The communication says the airline is offering service until the end of the day Sunday, in order to allow as many customers as possible to complete their journeys and return our aircrafts to base.
"I know this is a terrible shock for many of you, and this was not how our story was intended to play out for the most part. We have been doing everything right over the past two years and build our brand, grow our company and expand to new markets and destinations," the communications reads.
"It goes on to say the airline was part of a "transformational time in the airline industry" but the compounding financial pressures associated with inflation, fuel costs exchange rates, cost of capital, regulatory costs, and competitive tension in the Canadian market have ultimately proven too steep of an obstacle to overcome.
"While we did our best, the pressures mounted, and the risks increased, which has led to today’s announcement in the days ahead.
I urge each of you to remain proud of what we built together. In an exceptionally competitive industry, we started an airline from almost nothing and built it up to carry close to 2 million customers on a network across Canada, the US and Mexico. Last year alone, our passenger count group by 187%, and we did it all with a passion, dedication to a customer – centric flying experience with ultra Dash affordable fares. I know for certain that there are Canadians who were able to take their first ever flight or hug grandma one more time because we offered a rate that was affordable and fair.
It has been a highlight of my professional career serving as your leader over the last six months. This is a truly amazing team, and I will remain proud of what we have built together."
Operating its inaugural flight in April 2022, the airline showed a lot of growth promise, adding routes to its network to service destinations across Canada, the U.S. and Mexico.
Sullivan’s memo also said that the carrier boasted nearly two million flyers, with the year-over-year number increasing by 187 per cent in 2023.
However, despite the airline’s substantial growth, 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,” a press release stated.
Lynx Air flights will continue to operate as per usual until Sunday night, according to the release. Operations will cease as of 12:01 a.m. on Monday.
Flyers with existing bookings with Lynx Air should contact their credit card company to secure refunds. Further information for passenger can be availed here.
The Canadian Transportation Agency (CTA) has published guidance for Lynx Air passengers, including contact information for government agencies in Ontario, Quebec and British Columbia that can help secure refunds from travel agencies registered in those provinces.
Lou Arab, communications representative for the Canadian Union of Public Employees (CUPE), said the union was “devastated” for their members impacted by Thursday’s announcement but will fight for them.
Transport Minister Pablo Rodriguez said in a statement he expects Lynx Air to get stranded passengers back home as soon as possible, and to provide refunds if fares cannot be honoured.
According to the Air Line Pilots Association union, the airline employs 160 pilots and flight crew members. Carrier’s fleet consisted nine Boeing 737-8 planes. With the last update, Lynx’s website lists 23 destinations, that included most major Canadian cities and U.S. locations such as San Francisco, Phoenix and Tampa Bay.
The Venture included Stephen Bronfman’s Claridge Inc. and Bill Franke’s Indigo Partners, a U.S. private equity firm that invests in no-frills airlines such as Wizz Air and Frontier Airlines.
