CALGARY — Before its shutdown this week, Lynx Air was hoping to pay off someof its debt to a top investor through a purchase by rival discount carrier Flair Airlines.
Documents filed in the Alberta Court of King's Bench state that proceeds from a tentative deal with Flair would have gone toward paying off Lynx's $124.3-million debt to U.S. private equity firm Indigo Partners, which owns one-quarter of Lynx.
Lynx and Flair did not respond immediately to requests for comment.
When it filed for creditor protection on Thursday, Lynx also owed $25.6 million in unpaid taxes to the federal government and $47.8 million to various trade creditors, according to court documents. The filings state it has liabilities totalling $600 million and assets worth $429 million — the vast majority of them leases for nine Boeing 737 Max 8 jets.
The documents say the 21-month global grounding of the Max 8 along with COVID-19 travel restrictions and jet fuel price hikes delayed its launch and hampered ticket sales to the point it could no longer pay its creditors.
However aviation expert Duncan Dee questions whether Flair had the capacity to purchase Lynx — or the desire to follow through on a deal due to Lynx's financial woes.
This report by The Canadian Press was first published Feb. 27, 2024.
The Canadian Press
