Ultra low cost airline shuts down; won't refund fares

Bankruptcy filings by main airways haven’t been a typical prevalence in recent times. The final important airline chapter was Republic Airways Holdings’ February 2016 Chapter 11 submitting, which reported $3.5 billion in belongings and $2.9 billion in liabilities. The subsequent most important Chapter 11 submitting earlier than Republic was American Airlines’ Chapter 11 submitting in November 2011.

Several smaller airways have filed each Chapter 11 chapter and Chapter 7 liquidation for the reason that outbreak of the Covid-19 pandemic, together with Western Global Airlines submitting Chapter 11 safety in August 2023 and CategoricalJet additionally submitting Chapter 11 in August 2022.

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The Covid-19 pandemic coincided with different airline bankruptcies together with Miami Air International’s Chapter 11 on March 24, 2020, Trans States Airlines’ Chapter 7 on April 1. 2020, Compass Airlines’ Chapter 7 on April 5, 2020, and RavnAir Group’s Chapter 11 on April 5, 2020, based on airways.org.

And now monetary misery has pushed a North American air provider into insolvency and out of enterprise in 2024.

Lynx Air shutters operations and can wind down 

Canada-based extremely low-cost airline Lynx Air has obtained an preliminary order for creditor safety from the Court of King’s Bench of Alberta underneath the Companies’ Creditors Arrangement Act with plans to close down all operations on Feb. 26 and wind down its enterprise.

Under a CCAA submitting in Canada, an organization is taken into account to be bancrupt however not bankrupt. The preliminary order for creditor safety additionally offers Lynx Air with a keep of all authorized proceedings towards the airline through the CCAA course of.

The Calgary, Alberta, airline can also be looking for approval of a $1 million interim credit score facility from Indigo Northern Ventures to finance working capital, basic company functions and capital expenditures, based on courtroom papers.

The firm listed C$429 million ($317.8 million) in belongings and C$599.8 million ($444.3 million) in liabilities in its submitting.

Lynx Air, which offers low-cost airline service all through Canada and to sure airports within the U.S. and Mexico, mentioned that over the previous yr it has confronted important headwinds, together with rising working prices, excessive gasoline costs, change charges, growing airport prices, and a tough financial and regulatory atmosphere, based on an organization assertion.

In February, the airline obtained 4 notices of default from collectors: C$351,688 owed to Calgary Glycol Facilities Corp. on Feb. 1, C$1.63 million owed to Aeroports de Montreal on Feb. 2, C$2.44 million owed to Greater Toronto Airports Authority on Feb. 16, and C$2.19 million owed to Delta Air Lines on Feb. 17, based on courtroom papers. 

The fledgling airline started air service on April 7, 2022 and at present flies 9 Boeing 737 Max 8 plane to 18 locations in Canada, U.S. and Mexico. 

The air provider mentioned that in reference to graduation of its CCAA proceedings, it would proceed working flights till it ceases operations efficient 12:01 a.m. Mountain time on Feb. 26.

Lynx Air Jet Plane

Shutterstock

Airline says contact bank card corporations for refunds

While the airline mentioned that “Every effort is being made to assist passengers at this time,” the airline is not going to refund prebooked airline tickets. Lynx Air is recommending that passengers with present bookings contact their bank card corporations to safe refunds on prebooked journey.

Lynx Air employs about 500 employees, based on courtroom papers. The Canada Industrial Relations Board on June 3, 2023, licensed Air Line Pilots Association, International, as bargaining consultant for Lynx Air’s pilots, and the board on Feb. 7, 2024, licensed the Canadian Union of Public Employees to symbolize cabin crew, courtroom papers mentioned.

“We are devastated for our members at Lynx and all the employees who lost their jobs today. While this is a hard day for the employees of Lynx, they are better off for belonging to Canada’s largest union. CUPE will represent them and defend their rights in these difficult times. We will fight to ensure the employees get everything they are legally entitled to,” the union’s National President Mark Hancock mentioned in a press release.

CUPE represents 240 flight attendants on the airline, based on the assertion.

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