By Skies Magazine | February 23, 2024 Estimated reading time 4 minutes, 48 seconds.
Ultra-low-cost airline Lynx Air is planning to cease operations early next week, citing compounding financial pressures that hindered its ability to survive.
The Calgary-based airline said 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 a mountain for our organization to overcome.”
“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,” the airline said in a statement obtained by the Globe and Mail.
The airline said it intends to cease operations at 12:01 a.m. Mountain Time on Monday, Feb. 26, 2024. It has been granted creditor protection in an Alberta court, the Globe reported.
Lynx was a brief and optimistic entry into Canada’s ultra-low-cost carrier (ULCC) landscape, launching in April 2022. Its roots go back to 2006, when former WestJet executive Tim Morgan launched the company as Enerjet. It later was rebranded as Jet Naked and FlyToo.
It’s the latest Canadian ULCC to fold, after discount carrier Swoop was absorbed into the mainline operations of its parent company, WestJet. Though popular in Europe and the United States, Canadian ULCCs have struggled to sustain long-term operations.
Lynx had reportedly been in talks to merge with one of its competitors, Flair Airlines. Neither party has issued a statement about the fate of that deal.
In court documents obtained by the Globe and Mail as part of creditor protection proceedings, Lynx reportedly described itself as “insolvent,” with “insufficient cash” to continue operating.
“Certain critical service suppliers have recently elected to take enforcement actions, which, if pursued, would jeopardize the … ongoing operations, and would likely result in [Lynx’s] operations being shut down in a chaotic and haphazard manner,” the filing said, according to the Globe.
Lynx cited a rise in jet fuel prices, Covid-19 travel restrictions and their lingering effects, as well as the grounding of Boeing 737 Max jets after two fatal crashes, as factors impacting its operations, per the report. The airline operates nine Boeing 737 Max aircraft.
“The financial strains placed on the … business as a result of the foregoing events has been disastrous to [Lynx’s] business,” the court filing said, according to the Globe.
The company has “never been able to achieve profitability in order to become self-sustaining,” the filing reportedly said.
WestJet also issued a statement on Feb. 23, 2024, saying it will offer discounts to Lynx customers affected by the halt in operations.
Lynx has released a series of guidelines for passengers in an FAQ post on its website.
“It is with a heavy heart we leave the skies,” the airline said in a statement. “We hope in our absence that our vision to Inspire More Canadians to Fly leaves its mark on our passengers.”
