Lynx Air’s efforts to refund passengers have hit a roadblock as Sabre Corporation, the U.S. firm responsible for handling the airline’s bookings, has reportedly declined to assist with the refund process. This development was detailed by Michael Woodward, Lynx Air’s interim chief financial officer, in an April 9 filing to the Court of King’s Bench of Alberta.
Woodward’s filing highlighted that Lynx Air had intended to manage customer refunds directly, aiming to avoid the complexities and costs associated with credit card chargebacks. However, Sabre’s refusal to cooperate has compelled the airline to work with Elevon Canada Company, its credit card processor, to initiate chargebacks for affected customers. This method is not only costly but also results in significant chargeback fees, adversely affecting the financial returns to the airline’s creditors.
Lynx Air, based in Calgary, ceased operations in late February following financial difficulties and subsequently filed for bankruptcy protection. The airline has faced numerous challenges, including rising jet fuel prices, a downturn in passenger demand due to COVID-19, and the grounding of the Boeing 737 MAX in 2019, all of which severely impacted its operational and financial stability. It was also disclosed that Lynx owed about CAD124.3 million (USD90 million) to its 25% shareholder, Indigo Partners.
This situation underscores the complex financial and operational challenges faced by airlines in distress and the broader implications for their customers and stakeholders.
