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Will Lynx Air's demise mean higher airfares for Canadians?

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The demise of Calgary-based ultra-low-cost airline Lynx Air will mean Canadians have less choice when it comes to discount air travel and could pay higher fares, industry experts say.

Citing financial pressures such as those linked with inflation and fuel costs, Lynx Air officials announced Thursday evening that the airline had filed for creditor protection. It will continue to operate flights until midnight MST on Feb. 26. Lynx flew its first flight in April 2022.

"Every effort is being made to assist passengers at this time," the airline said in a release. "Passengers with existing bookings are advised to contact their credit card company to secure refunds for pre-booked travel. Additional information for Lynx customers is available on the Frequently Asked Questions page."

Lynx Air's collapse comes as Toronto-based Porter Airlines CEO Michael Deluce said in December that the travel market is too small to keep all of Canada's airlines afloat for two more years. WestJet shut down its budget subsidiary Swoop and folded it into its mainline operation in October. It plans to also do that with Sunwing Airlines.

John Gradek, a faculty lecturer at McGill University in Montreal with expertise on air passenger rights regulations and airline operations, says Canadians have fewer choices.

"Canadian air travellers are the big losers," said Gradek in a phone interview with CTVNews.ca on Friday. "Canadians are about to lose low prices, and the stability of the Canadian air travel market is at risk."

Gradek says it will be tough for passengers to find similar deals.

"It's unfortunate Lynx Air suspended services at the start of spring break travel, so if Lynx passengers are looking for available seats for existing carriers, choices are few and far between," he said. "I'd look to (the) minister of transport to provide some relief to these Lynx passengers through his efforts to get remaining carriers to offer Lynx passengers seats."

Pablo Rodriguez, Canada's minister of transport, said his office has been in touch with Lynx Air.

"For any travellers that had a return flight booked with Lynx, I expect Lynx to help you get back home as soon as possible," Rodriguez said in a statement Thursday posted on X. "I expect Lynx to fully refund you if your fare won't be honoured."

Lauren Yakiwchuk, a full-time travel blogger and content creator in Georgetown, Ont., says the end of Lynx Air is "bad news" for budget travel in Canada.

"As Canadians, we always hope for more airline options as we only have a few compared to other countries in the world," Yakiwchuk said in an email to CTVNews.ca. "We always look to Europe and how they're able to jet around quite cheaply. While we have greater distances to cover in Canada, there's always the hope for more low cost options. … It's a shame to see them shutdown, especially as Canadians plan their spring and summer travels for 2024."

Industry troubles

Gradek said the government has a part to play in the low-cost carrier industry's current troubles since the ministry of transport issues licences for low-cost carriers.

"There should have been and ought to be some recognition that a low-cost market could only support certain capacity in Canada," he explained. "The minister abdicated responsibility to ensure the economic viability of air services. The minister of transport can solve the problem of carriers going bankrupt by limiting the licence of low-cost carriers but more importantly to provide oversight on pricing actions undertaken by (the) likes of Air Canada and WestJet in markets where they compete with low-cost carriers."

In response to Gradek's criticism, a spokesperson for Transport Canada referred CTVNews.ca to the minister's post on X.

Barry Prentice, director of the Transport Institute and professor of supply chain management at the I.H. Asper School of Business at the University of Manitoba in Winnipeg, says he doesn't expect Lynx Air's collapse to have much of an impact on budget travel in Canada until at least the summer because it's low season for travel now.

"The nature of their impact will be relatively narrow because they only served some major routes and they have lots of competition," Prentice said in an email to CTVNews.ca.

"Generally speaking it should give Flair a bit more breathing room because there are travellers who are really happy with the barebones service at a low price. … About the only thing that we can say with some certainty is that no new budget 'airline-want-a-bes' are likely to try to fill the gap at this point."

While he couldn't speak about the future of budget travel, he said he hopes Lynx Air's exit could help Flair establish its foothold.

"But the history of airlines in Canada is that it is hard for third or fourth smaller companies to survive against the full service WestJet and Air Canada," Prentice said. "Whether Canada's growing population will help is uncertain. The real problem is geography. Everyone flies the same places and wants to go at the same time."

Remedy for passengers

Gabor Lukacs, president of Air Passenger Rights, says he's also concerned the end of Lynx Air may result in higher airfares for Canadians.

He says passengers who bought Lynx Air tickets can get a refund through consumer protection legislation if they paid using a credit card in most provinces. British Columbia, Ontario and Quebec also have provincial compensation funds for passengers who purchased tickets through provincial travel agents, he added.

Passengers affected by Lynx Air's shutdown are eligible for a 25 per cent discount on all economy fares on non-stop WestJet routes previously served by Lynx for travel between Feb. 22 and Oct. 26. The discount is available until Feb. 29.

In a statement released on Feb. 22, WestJet says it is "committed to assisting" Lynx passengers.

"We are communicating closely with government officials and supporting agencies that are also working to address the needs of those impacted," it said.

For any passengers who planned to fly back to Canada from the United States or sun destinations before Feb. 29, WestJet has capped fares at $250, plus taxes and fees, for any northbound economy cabin fares on non-stop routes previously served by Lynx.

"All bookings should be made online through westjet.com. WestJet has managed pricing to ensure fares reflect a reduction from what would typically be charged," WestJet said in a press release.

The airline said all domestic fares on non-stop routes previously served by Lynx will not exceed $500, plus taxes and fees, for travel up until Feb. 29.

With files from CTVNewsCalgary.ca and The Canadian Press

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