The rumours have been around for some time. But chatter about a possible merger of Canadian ultra-low-cost carriers Flair Airlines and Lynx Air is getting louder, with reports that an announcement could come as soon as today.
Stephen Jones, CEO Flair Airlines. (Photo Credit: Flair)
Last week, during an online press conference, Flair Airlines CEO Stephen Jones was asked about the rumours, but refused comment. Today, The Toronto Star is reporting that three separate airline industry sources say merger talks are the final stages.
The first published report came early this month in a publication called The Airline Observer, which said the carriers were in talks for a deal that would see Flair and its 20-aircraft fleet take over Lynx, which operates eight planes.
Canada Jetlines is also fighting for space in the crowded Canadian market. (Photo Credit: Canada Jetlines first airline)
Many observers have suggested just such an outcome, believing that the Canadian market cannot support the current number of low-cost carriers. Both Flair and Lynx have offered fares that experts say are unsustainable. Fledgling Canada Jetlines, while not occupying the same ULCC space, is also competing for Canadian travellers. It has just three planes now, but plans to grow to 15 in a little more than a year.
While both airlines meet Canadian ownership regulations, Flair is partly owned by Miami-based private equity firm 777 Partners. Lynx is partly-owned by Phoenix-based Indigo Partners, which has stakes in other airlines, including U.S. discount carrier Frontier Airlines, Mexico’s Volaris and Hungarian ULCC Wizz Air.
Lynx Airlines (Photo Credit: Lynx Airlines)
While Lynx has mostly gone about its business without much fanfare, Flair has endured a bumpy ride in the Canadian marketplace. It was forced to make changes to its ownership and board composition to meet Canadian ownership rules.
Last March, Flair had four of its planes seized by an Irish leasing company which claimed it had fallen behind on payments. A $50 million lawsuit by Flair against leasing company Airborne Capital is ongoing.
In November, 2023, Flair was ordered by the CRA to pay $67.2 million in unpaid aircraft import duties, an order backed by the potential for aircraft seizure, though the CRA described that as “a last resort.”
Despite its struggles, Flair has soldiered on, with CEO Jones telling media last week that in 2023 it cancelled a smaller percentage of flights than any Canadian carrier, and posted the second-best on-time performance for the year. In 2023, Flair carried 4.5 million passengers, 1.5 million more than in 2022.
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