Lynx Air is shutting down. Here's what passengers need to know

CTV National News: Canada's airline graveyard With the closure of another low-budget airline, Kamil Karamali takes a look at Canada's growing airline graveyard.

CALGARY — Passengers booked with Lynx Air were left scrambling to replace cancelled flights after the ultra-low-cost airline announced Thursday evening that it is ceasing operations after filing for creditor protection.

All flights scheduled Monday, Feb. 26 or later are cancelled, effective 12:01 a.m. MT. The Calgary-based company 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.”

But some travellers said Friday morning that chaos had already begun three days before the airline is officially set to shut down.

Sal Saied was supposed to fly from Toronto to Los Angeles around 9:30 a.m. on Friday, but said she received an email from Lynx stating the trip would be delayed over an hour. She was at the gate about to board the plane at 10:45 when there was an announcement that the flight was cancelled altogether.

“We lined up to get ready to board, then they actually told us to step back down and about five minutes after they told us that our flight was cancelled,” she said.

“They told us to essentially leave the airport.”

Saied, who found a replacement ticket at an “extremely high price,” described the situation as a “fiasco.”

“It's really frustrating,” she said.

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 hurrying 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.

“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.

Natasha MacLean, who was travelling to Halifax on Friday to visit family, said she received an email around 10 p.m. on Thursday informing her that the return flight she'd booked through Lynx 10 days from now was cancelled.

Speaking at Toronto's Pearson airport, she said she booked a new return flight at double the cost.

“This is my first time flying with Lynx and I'm not impressed with customer service and the late notice,” she said.

“Very stressful, a lot of anxiety and disappointment.”

Beyond the immediate impact to be felt by travellers, the Air Line Pilots Association International said 160 pilots and flight crew will be affected.

As of the end of last year, Lynx Air employed approximately 500 employees - 390 in Alberta and 110 in Ontario, according to an affidavit filed Thursday by interim chief financial officer Michael Woodward in the Court of King's Bench of Alberta.

The document said Lynx operates a uniform fleet of nine Boeing 737 MAX 8 aircraft.

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, given higher airline industry costs than other countries and a limited number of large routes that are already served by other airlines.

Doerksen 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.

“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.

- With files from Maan Alhmidi in Toronto

This report by The Canadian Press was first published Feb. 23, 2024.