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Saturday 24 February 2024

Airline to shut down after financial turbulence

Another budget airline has hit turbulence and will shut down just two years after launching.

Calgary-based ultra low-cost airline Lynx Air launched in 2022 but faced "significant headwinds", company says.

Lynx Air launched with a promise to make air travel more affordable for Canadians, but it will cease operations on Monday. Many weekend flights are already marked "Non operational". 

"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," the company said 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."

Air Canada announced it will cap fares and add 6,000 seats in “select markets” to assist passengers in the wake Lynx Air’s closure, which has left passengers stranded across the US, Canada and Mexico.

“The measures are to provide Lynx Air customers affected by the carrier’s shutdown affordable options in the economy cabin on Air Canada flights for travel within Canada, to the US and to Cancun in Mexico, so they can return home or make alternative travel arrangements for planned winter trips,” the airline said.

Another Canadian carrier, WestJet, said it would be offering 25% discounts on economy tickets for stranded Lynx passengers on routes WestJet also serves.
Lynx routes included Toronto and Montreal to Cancun and to many US destinations including Fort Myers, Orlando, Tampa, Phoenix, Boston and Las Vegas.

The start-up airline had filed for creditor protection in Canada, but pledged to operate “most” of its flights through the weekend.

It has directed customers who are booked beyond its final day of operations to seek flight refunds through their credit card companies.

Court documents show Lynx owes around $140 million to Indigo Northern Ventures, the firm led by long-time airline investor William Franke that helped Lynx get airborne, local media reported.

The airline's former CEO, Merren McArthur, was also in charge of now extinct Australian carrier Tigerair. She resigned in September last year to return to Australia. McArthur has also headed Virgin Australia Cargo and Skywest Airlines.

"My heart goes out to my wonderful friends and colleagues at Lynx Air after today’s very sad announcement," she said on LinkedIn

"The airline industry is not for the faint hearted at the best of times, but it takes a special kind of courage and commitment to launch a start-up airline in Canada in the middle of a pandemic…. a wildcat courage and commitment."

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