By Skies Magazine | February 15, 2024 Estimated reading time 4 minutes, 58 seconds.
Reports of the potential merger of two Canadian independent ultra-low-cost airlines may signal another setback to the long-sought viability of low-cost air travel in the country.
Flair Airlines and competitor Lynx Air are in discussions about a merger, and a deal could be announced as soon as today, the Toronto Star reported, citing three industry sources.
If approved, the agreement could signal another blow to the ultra-low-cost carrier (ULCC) model in Canada, following on the heels of Swoop’s absorption into WestJet’s mainline operations.
Flair and Lynx declined to comment on speculation of a merger, and sources told the Star the exact timing and structure of a deal remains to be seen.
The Airline Observer, an industry publication hosted on Substack newsletter platform, first reported the airlines were in “advanced merger discussions,” citing two sources.
Although the merger is not confirmed, analysts predict it would likely result in the end of at least some ultra-low prices currently offered by Flair and Lynx.
“The price war is now over. Fares will go up, without a question. The days of Toronto to Calgary for $99 are over,” said John Gradek, a former Air Canada executive and head of McGill University’s Global Aviation Leadership Program, in an interview with the Star.
“They were chasing each other down the rabbit hole with low fares. It just wasn’t sustainable. They were barely making enough to cover fuel costs on some of those flights.”
Others point out a merger could allow Flair to reach destinations it currently doesn’t service. Flair could potentially add Lynx’s nine aircraft to its existing fleet of 20 airliners.
“There’s been a lot of skepticism about how many airlines can be sustainable,” University of Manitoba business professor Barry Prentice told the Star. “But I definitely think there’s room for an ultra low-cost carrier in this market.”
This merger speculation follows a Feb. 8, 2024, press conference in which Flair CEO Stephen Jones tried to allay concerns about the airline’s long-term viability. Jones doubled down on Flair’s commitment to low-cost air travel, saying “low-cost travel is for everyone. It’s not a product for the rich and the elite. We’ve put affordable travel in the hands of all Canadians.”
The airline has also reached “an arrangement” with the Canada Revenue Agency (CRA) about its reported $67 million in unpaid federal taxes, Jones told reporters.
“The CRA repayment has zero impact on any of our operations,” he said. “We’ll be here delivering the same product we’ve been delivering successfully for years.”
Mentions Lynx has 8 aircraft
Is actually 9
Tail numbers 4801 thru 4803 & 4805 thru 4810
I’m told a 10th one very soon with projections to have 17 by year end