(Bloomberg) -- Low-cost Canadian airline Lynx Air entered creditor protection and plans to cease operations in three days after being “devastated” by low passenger volumes and rising fuel costs. 

Cost cuts and the pursuit of a sale or merger weren’t enough to save the company, the Calgary-based carrier said Thursday. Lynx, which started up in April 2022, had 11 destinations in Canada, six in the US and one in Mexico. As of December, it had about 500 employees.

Lynx said in filings Thursday that its business had been “devastated” by rising jet fuel costs, persistent low passenger volumes after Covid-19 restrictions and the 2019 regulator-mandated groundings of the Boeing 737 MAX 8 it operates, which delayed its planned inaugural flight by three years.

Lynx told customers with bookings to seek refunds from credit card companies.  

Lynx had received startup debt funding from Indigo Northern Ventures LP. An affidavit published by the monitor Thursday said the airline had C$429 million ($318 million) in assets at book value, but C$600 million in liabilities as of Dec. 31 — foremost being its aircraft leases. Shareholders’ equity was negative C$170.8 million.

Lynx Chairman William Franke’s private equity firm Indigo Partners is a key backer of a host of other low-cost airlines.

In February, Lynx received notices of default from several businesses, including Canadian airports claiming fees.  

Singapore-based aircraft lessor BOC Aviation Ltd. separately said it owned three of Lynx’s nine 737 Max 8s. The lessor plans to work with Indigo to retrieve the aircraft. In a statement Friday, BOC added that it anticipates no issues in finding new airlines for the jets, which are all less than one year-old, citing the high demand for new-generation planes.

Both Boeing Co. and Airbus SE are struggling to keep up with deliveries of new jets at a time when some models powered by RTX Corp.’s Pratt & Whitney engines are being grounded by the dozen.

(Updates with background from legal filings)

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