Suspended Lynx Air blames contractor for passenger delays

Contractor Lynx Air says the insolvent airline is to blame for delayed refunds to customers, a holdup that also hurts the company's stakeholders.

Lynx, which went out of business in late February and filed for creditor protection, filed a lawsuit against Texas-based Saber Corp. The company claimed that the booking firm it hired had prevented it from compensating passengers.

The ultra-low-cost carrier said it plans to issue refunds directly, “without the need for customers to contact their credit card providers for refunds.”

“Unfortunately, Saber Corp… has declined to assist in refunding customers,” Lynx's interim chief financial officer said in a statement filed with the Alberta Crown Court.

This leaves the airline with no choice but to work with the credit card processor to issue a refund for prospective travelers whose flights have been canceled.

While customers expect a return on their purchases, the company's investors may find it more difficult to recoup their cash from Lynx.

“The chargeback process is expensive, so this will result in significant fees for applicants” – Lynx – “to the detriment of their stakeholders,” the carrier said.

Saber Corp., a travel technology firm with clients in more than 160 countries, declined to respond to questions.

“As a matter of policy, we do not comment on our agreements with customers and we do not comment on litigation,” spokeswoman Heidi Castle said.

Airlines are under pressure

The deadline for customers to submit refund requests is Sept. 1, 2025, court documents state.

The closure of Calgary's Lynx comes as budget airlines that have sprung up in recent years face constant financial pressure — if they survive at all. The challenging market stems in part from industry consolidation and the downturn in the travel sector during the COVID-19 pandemic.

In October, WestJet closed its discount subsidiary Swoop. It also plans to spin off Sunwing Airlines by next October and integrate the low-cost carrier into its core business after acquiring the Toronto-based company last May.

Ultra-low-cost airline Flair Airlines also faced financial turbulence last year. As of November, it owed the federal government $67.2 million in unpaid taxes due to import duties on the 20 Boeing aircraft that make up its fleet.

In court filings earlier this year, Lynx said it owed $124.3 million to a unit of US private equity firm Indigo Partners, led by Bill Frank, which owns a quarter of the carrier.

The new filings show Lynx has asked a judge to allow it to repay up to $94 million of that debt. Seeking to allay the concerns of other investors hoping to get their money back, Lynx said the move would “overall benefit all stakeholders” because interest would be lower.

The reasons for the fall are the grounding of Boeing, the pandemic

When it filed for creditor protection on Feb. 22, Lynx owed $25.6 million in unpaid taxes to the federal government and $47.8 million to various trade creditors, according to court documents.

Lynx owes another $4.1 million to Toronto and Montreal airports and $4.5 million for Delta Air Lines aircraft maintenance and storage.

The company's initial investors include Indigo, Stephen Bronfman's Claridge Inc. and became Torquest Partners.

Arizona-based Indigo is best known for launching no-frills carriers such as Wizz Air in Hungary, Frontier Airlines in the US, JetSmart in Chile and Volaris in Mexico.

The lynx, which stopped flying just 22 months after its first flight, cited several reasons for its downfall.

A 21-month global grounding of the Boeing 737 Max 8 – Lynx's fleet of nine aircraft consisted exclusively of these planes – as COVID-19 travel restrictions and rising jet fuel prices delayed the airline's first flight by more than two years to April 2022. and made it difficult to sell tickets to the point where it could no longer pay its creditors, the ultra-low-cost carrier said in a brief filed earlier this year.

“Unlike a legacy airline or low-cost carrier, which can recover lost revenue by increasing base fairs, a ULCC cannot deviate from a fixed base fare without abandoning the ULCC model altogether,” the filing said.