Another budget airline bites the dust

In what’s probably the most rational decision the company’s made since changing its name from Jet Naked, Lynx Air has decided it’s time to throw in the towel. 

What happened: Budget airline Lynx Air officially stopped flying last night, winding down operations after just two years in the skies. It's the latest discount airline to fall flat in an increasingly difficult Canadian aviation market. 

  • Lynx said high operational costs, fuel prices and increased airport charges were the main culprits for the company’s unscheduled landing, while a tough economic environment left them unable to lure investors to keep the airline afloat.

Catch-up: Last year, WestJet absorbed two struggling low-cost airlines, Sunwing and Swoop. Meanwhile, one of the last Canadian budget airlines, Flair, reportedly owes $67 million in unpaid taxes and has had to pause expansion plans.  

Why it's happening: Canadian airlines pay much higher fees and taxes to airports, security agencies and air traffic services than carriers in the U.S. or Europe. That inflates their prices and ultimately makes it difficult to attract budget travellers with the same eye-popping $9 flights that carriers elsewhere in the world can offer.  

  • Without the ability to significantly undercut major players like Air Canada and WestJet on prices, it’s pretty tough to convince Canadian travellers to give up free carry-ons, extra legroom and complimentary snacks.

Why it matters: Lynx is another example of just how difficult it is to make the budget airline business model work in Canada. If no one else cares to try their hand at it (and who could blame them), experts warn that a lack of competition will ultimately mean higher airfare for flyers.—LA