The Calgary Airport Authority has lost its legal fight to recover more than $2 million in unpaid improvement fees owed by bankrupt Lynx Air. Read More
Calgary Airport Authority has lost legal fight to recover unpaid improvement fees
Calgary Airport Authority has lost legal fight to recover unpaid improvement fees
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The Calgary Airport Authority has lost its legal fight to recover more than $2 million in unpaid improvement fees owed by bankrupt Lynx Air.
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Alberta’s top court ruled this week that YYC and four other Canadian airport authorities, including Edmonton Regional Airports which led the legal action, don’t have an exceptional claim to the money.
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The five claimants were seeking the immediate return of $4.1 million in unremitted airport improvement fees collected by Calgary-based Lynx, which filed for bankruptcy in February 2024.
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The fees are charged to departing passengers by airport authorities for future capital projects. They’re collected by airlines and returned monthly to airport operators.
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The five authorities had argued distribution of the fees — being held in trust by the bankruptcy monitor — should be given priority over other claims under the airline’s creditor agreement. That initial claim was denied in court ruling last summer.
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Appeal Court rules no errors made in Court of King’s Bench of Alberta decision
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The three-member Alberta Court of Appeal panel, in a unanimous ruling posted online Wednesday, dismissed the airlines’ appeal, ruling no errors were made in the August decision, based on the wording of the agreement they had with Lynx.
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“The Airport Authorities were sophisticated parties organizing their affairs with other commercial entities in a specialized industry,” it reads. “Commercial risk was allocated in accordance with the terms of the (agreement).
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“In the absence of exceptional circumstances, clear contractual terms should be respected.”
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The Court of King’s Bench of Alberta ruling last August determined the airport authorities did not have claim over all other interests. Justice Barbara Romaine cited a 1999 agreement that stated Lynx did not have a partnership or trust relationship with the five airports.
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The airports’ appeal argued Romaine erred in her assessment of the contractual obligations contained in the agreement.
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“In this case, as the chambers justice found, there was no wrongdoing by Lynx Air,” the appeal court ruling states. “The failure to remit the AIFs breached a contractual term but in these circumstances that did not constitute a breach of an equitable obligation.”
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Lynx owed more than $2 million to the Calgary airport, along with $1.1 million to Vancouver and $355,000 to Edmonton. The Halifax and Winnipeg airport were also involved in the claim.
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The Toronto Airport Authority, which was not part of the 1999 agreement cited by Romaine, was successful in arguing for return of $1.7 million in unremitted fees.
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Initial court filings indicated Lynx, which launched its first flight in April 2022, had more than $200 million in debts after filing for bankruptcy.
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It said airport charges, rising costs and “a competitive aviation landscape proved disastrous” for the airline in unrelated court filings.
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