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Lynx Air, Canada's newest ultra-low-cost carrier, to launch out of Calgary

·3 min read
Lynx Air, Canada's newest ultra-low-cost carrier, to launch out of Calgary

A new airline is coming to the Canadian skies.

Lynx Air announced on Tuesday that it will launch as a new, "ultra-affordable" airline based out of Calgary, Alta. The company says it will operate the airline as an ultra-low-cost carrier (ULCC), which typically offers low-base fares while charging for extras such as seat selection and carry-on baggage.

The new carrier has named Merren McArthur as its chief executive officer. McArthur previously worked as chief executive of Tigerair Australia, another ULCC, Virgin Australia Regional Airlines and Virgin Australia Cargo.

Lynx says it will unveil its routes and schedules "soon." It will operate a fleet of Boeing 737, and says it has firm orders and lease agreements in place for 46 aircraft over the next seven years. The company expects its first three Boeing 737 aircraft to arrive in early-2022.

"We are excited to bring competition and choice to the Canadian aviation market at a time when Canadians are yearning for the opportunity to fly again, whether it be to see friends and family or to take a long-awaited holiday," McArthur said in a statement released Tuesday.

"We have created an ultra-affordable fare structure which is focused on simplicity, transparency and choice. Our à la carte pricing will empower passengers to pick and pay for the services they want, so they can save money on the trip and spend where it counts – at their destination."

Lynx is privately owned and says it has "financial backing and industry expertise required to transform the Canadian aviation landscape." The company was formerly known as Enerjet, a charter carrier based out of Calgary that had previously said it would rebrand and launch as a new low-cost airline before the COVID-19 pandemic hit. Tim Morgan, who co-founded WestJet and Enerjet, will serve as the chief operations officer at Lynx.

The pandemic has created an opportunity for smaller airlines to make gains in the Canadian market. National Bank Financial analyst Cameron Doerksen and associate Alex Hutton wrote in a note to clients earlier this year that although travel demand remains depressed, "conditions are arguably favourable for new competitors to make their mark." Those conditions include aircraft availability and low lease rates, a larger pool of qualified pilots, and airports that are looking to attract new airlines in order to make up for lost revenue.

However, the analysts expect smaller airlines will still face a steep challenge against established players like Air Canada and WestJet, which dominate the Canadian market.

"As evidenced by the long list of failed airlines in Canada over the past (approximately) 20 years, history would suggest that new airlines face long odds of success," they wrote.

"Given that developing new routes can take many months to turn profitable and attempting to take market share from larger incumbent airlines can be costly, any successful new airline in Canada will need to be well-capitalized."

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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