Lynx Air hoped its purchase by Flair Airlines would ease debt woes
Before its shutdown this week, Lynx Air hoped to pay off some of its debt to a top investor through a purchase by rival discount carrier Flair Airlines. According to documents filed with the Alberta Court of King’s Bench, proceeds from a tentative deal with Flair would have gone toward Lynx’s $124.3m debt to Indigo Partners, the U.S. private equity firm run by Bill Franke that owns one-quarter of Lynx. The 1,275-page filing refers to Flair dozens of times, including to a planned “transaction” and a non-binding agreement signed on Jan. 11. Lynx and Flair did not immediately respond to requests for comment. When it filed for creditor protection on Thursday, Lynx also owed $25.6m in unpaid taxes to the federal government and $47.8m to various trade creditors, according to court documents. The filings state it has $600m in liabilities and $429m in assets — the vast majority of them leases for nine Boeing 737 Max 8 jets. Judge John Gill granted Lynx protection under the Companies’ Creditors Arrangement Act last week, which allows firms to restructure their financial affairs and pay off lenders, typically for pennies on the dollar. “The corporate entity that we know today as Lynx will not exist coming out of CCAA, based on what they’ve publicly stated,” said Duncan Dee, Air Canada’s former CCO. “What it appears they’re doing is liquidating their assets.” The 21-month global grounding of the Max 8 along with COVID-19 travel restrictions and jet fuel price hikes delayed Lynx’s inaugural flight by more than two years to April 2022 and hampered ticket sales to the point it could no longer pay its creditors, the ultra-low-cost carrier (ULCC) said in a brief to the court.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-02-28/unaligned/lynx-air-hoped-its-purchase-by-flair-airlines-would-ease-debt-woes
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Lynx Air hoped its purchase by Flair Airlines would ease debt woes
Before its shutdown this week, Lynx Air hoped to pay off some of its debt to a top investor through a purchase by rival discount carrier Flair Airlines. According to documents filed with the Alberta Court of King’s Bench, proceeds from a tentative deal with Flair would have gone toward Lynx’s $124.3m debt to Indigo Partners, the U.S. private equity firm run by Bill Franke that owns one-quarter of Lynx. The 1,275-page filing refers to Flair dozens of times, including to a planned “transaction” and a non-binding agreement signed on Jan. 11. Lynx and Flair did not immediately respond to requests for comment. When it filed for creditor protection on Thursday, Lynx also owed $25.6m in unpaid taxes to the federal government and $47.8m to various trade creditors, according to court documents. The filings state it has $600m in liabilities and $429m in assets — the vast majority of them leases for nine Boeing 737 Max 8 jets. Judge John Gill granted Lynx protection under the Companies’ Creditors Arrangement Act last week, which allows firms to restructure their financial affairs and pay off lenders, typically for pennies on the dollar. “The corporate entity that we know today as Lynx will not exist coming out of CCAA, based on what they’ve publicly stated,” said Duncan Dee, Air Canada’s former CCO. “What it appears they’re doing is liquidating their assets.” The 21-month global grounding of the Max 8 along with COVID-19 travel restrictions and jet fuel price hikes delayed Lynx’s inaugural flight by more than two years to April 2022 and hampered ticket sales to the point it could no longer pay its creditors, the ultra-low-cost carrier (ULCC) said in a brief to the court.<br/>
