'Fiasco': Lynx passengers left scrambling after airline announces shutdown

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 a.m. 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 flight.

"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 that would 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.

Air Canada said it will cap fares and add more than 6,000 seats in select markets Lynx Air operated in, to provide affected customers with affordable options within Canada, to the U.S. and to Cancun. 

"These fares will be available for purchase before Feb. 26 for travel through April 2, to cover the March Spring break periods across Canada and the Easter holiday period," the airline said in a press release. 

The airline said it also plans to incrementally add capacity of more than 6,000 seats on Lynx routes from Toronto and Montreal to Cancun, Fort Myers, Orlando, Tampa, Phoenix and Las Vegas between Feb. 25 and March 19. However, it said its ability to increase capacity further is limited due to the busy travel period. 

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.

He added Lynx's exit from the market should have positive implications for the larger carriers in Canada, including Air Canada and Air Transat.

John Gradek, who teaches aviation management at McGill University, said the closure of an ultra-low-cost airline was inevitable. He said the large carriers like Air Canada and WestJet introduced various pricing initiatives last fall to more closely match the lower fares being offered by Lynx and Flair Airlines.

"They basically decided it was time to take on the new guys," Gradek said.

"That put some downward pressure on prices from both Flair and Lynx in order to maintain a gap and that's a fast road to bankruptcy, which is what happened."

But he said Lynx has chosen to pull the plug at a particularly bad time for passengers, with spring break just around the corner.

"Anybody who's booked ... is going to have a hard time finding equivalent space on other carriers because there's no room left on other carriers to carry Lynx's passengers," Gradek said.

"That, to me, is flying in the face of trying to come out of a Canadian marketplace with grace." — With files from Maan Alhmidi in Toronto

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