Defunct Lynx Air selling off life-jackets, oxygen masks in bid to recoup losses
Company owed $186M when it sought creditor protection in late February
Lynx Air hopes to sell off everything from life-jackets to oxygen masks as it tries to recoup a portion of the losses it incurred before filing for creditor protection earlier this year.
In court filings last week, the defunct discount carrier said it has worked out deals with a pair of aviation companies abroad to sell plane parts and equipment ranging from seats to tires and transponders.
The airline didn't own its fleet of nine aircraft. The half-dozen leasing companies behind them cancelled their deals and took back the planes, according to an affidavit from interim chief financial officer Michael Woodward.
The filings ask Alberta's Court of King's Bench to approve agreements that would see New Hampshire's Aero 3 repair company buy more than 50 wheels and brakes and the Cayman Islands-based BOC Aviation leasing company snap up 79 other items, from food carts to a single garbage can.
Lynx, which owed $186 million when it sought creditor protection in late February, says a third company "unexpectedly terminated negotiations" regarding four turbofan jet engines.
The shutdown of the Calgary-based carrier three months ago came as budget airlines face ongoing financial pressures — if they've survived at all — amid industry consolidation and fallout from the travel sector implosion during the COVID-19 pandemic.
In October, WestJet closed its discount Swoop subsidiary. It also plans to wind down Sunwing Airlines and integrate the low-cost carrier into its mainline business by April 2025 after buying the Toronto-based company last May.
Ultra-low-cost Flair Airlines has also confronted financial turbulence over the past 18 months. As of November, it owed the federal government $67.2 million in unpaid taxes related to import duties on the 20 Boeing jets that make up its fleet.
As of Feb. 22, Lynx owed $124.3 million to Indigo Partners, the U.S. private equity firm run by Bill Franke that owns one-quarter of the carrier.
Lynx also owed $47.8 million to various trade creditors and $25.6 million in unpaid taxes to the federal government, according to court documents. It owed a further $4.1 million to the Toronto and Montreal airports and $4.5 million to Delta Air Lines for aircraft maintenance and warehousing.