By Sammy Hudes
Come Monday, Canadian travellers booked with the ultra-low-cost airline Lynx Air will be out of luck and its employees out of work.
Officials with the Calgary-based company announced Thursday evening that it is ceasing operations, effective 12:01 a.m. MT on Feb. 26, after filing for creditor protection.
Lynx Air has advised passengers with existing bookings to contact their credit card company to secure refunds for pre-booked travel.
The airline said it was unable to overcome compounding financial pressures associated with inflation, fuel costs, exchange rates, cost of capital, regulatory costs and competition in the Canadian market.
"It is with a heavy heart we leave the skies," Lynx said in a statement on its website.
"We hope in our absence that our vision to inspire more Canadians to fly leaves its mark on our passengers."
Jean-Francois Turcotte and his girlfriend were planning to fly to Las Vegas from Montreal next Friday for a five-day trip with 12 of their friends, but Lynx's announcement has left them scrambling to find another way there.
The couple had booked their departing flight on Lynx along with a return flight on Air Canada through Bookings.com. Turcotte said he has now looked into cancelling the whole vacation, but was told Bookings.com wouldn't reimburse their Air Canada flights.
"From what they've been telling us on the phone, there's no impact on the return flight and we have to take the return flight even though we don't have an outgoing flight anymore," he said.
"It's just a matter of deciding if we're cancelling the trip altogether or if we are just buying a very expensive last minute ticket to still go on the trip."
While they initially paid about $250 each way per person, Turcotte said tickets to Las Vegas next week appear to be north of $1,000 at this point.
Meanwhile, he said his girlfriend's credit card company informed them they have to dispute the charge for their cancelled Lynx booking, a process which would then take 14 days to determine an outcome.
"Basically nobody has the answers now about what to do," he said. "So we have to act not knowing what's going to happen."
WestJet said it was ready to help mitigate some of the issues for travellers. The airline said it will offer discounted fares for stranded domestic travellers and capped fares for Canadian repatriation flights on non-stop WestJet routes previously served by Lynx.
All economy cabin fares that meet that criteria are eligible for a 25 per cent discount between Feb. 22 and Oct. 26, as long as the booking is made by next Thursday.
For transborder repatriation flights, WestJet said it would cap fares at $250 plus taxes and fees on all northbound economy cabin fares until Feb. 29. All domestic fares on non-stop WestJet routes previously served by Lynx are also capped at $500 plus taxes and fees.
"We are communicating closely with government officials and supporting agencies that are also working to address the needs of those impacted," WestJet said in a statement.
On Friday morning, Toronto Pearson International Airport said passengers flying on Lynx Air were able to check in and flights were departing as scheduled.
Beyond the immediate impact to be felt by travellers, the Air Line Pilots Association International said 160 pilots and flight crew will be affected.
Duncan Dee, the former chief operating officer at Air Canada, issued a statement on X, the social media platform formerly known as Twitter, calling it a "very sad day for Canada's airline community" and the communities Lynx served.
National Bank of Canada analyst Cameron Doerksen said in a note that Lynx's closure illustrates the challenges of the low-cost carrier model in Canada. He said one of the financial backers of Lynx was Indigo Partners, a successful private equity investor in numerous low-cost airlines globally.
"The fact that even with the help of an experienced investor, Lynx Air was unable to have success with its ultra-low-cost model strategy and was also unable to source additional capital to sustain its operations speaks to the challenges any startup airline faces in Canada," he said.
"These include much higher airline industry costs than many other countries, a limited number of large routes to target that are already well served by other airlines and limited access to capital. In this context, we would not be surprised to see other rapidly growing airlines' growth plans scaled back."
He added Lynx's exit from the market should have positive implications for the larger carriers in Canada, including Air Canada and Air Transat.
Banner image: THE CANADIAN PRESS/Jonathan Hayward
This report by The Canadian Press was first published Feb. 23, 2024.
