Edmonton Regional Airports Authority v Lynx Air Holdings Corporation: Appeal Decision on Airport Improvement Fees

Strategic Insights -

The Edmonton Regional Airports Authority, alongside other Canadian airport authorities, has obtained permission to appeal a decision by the King's Bench regarding the collection and remittance of airport improvement fees from Lynx Air Holdings Corporation. The dispute revolves around the interpretation of a Memorandum of Agreement between the Air Transport Association of Canada and signatory air carriers and airports. The agreement governs the collection of fees from departing passengers to fund capital expenditure projects at airports.

The applicants seek to appeal a decision that found no trust was created between the airport authorities and Lynx Air regarding the fees, while a similar agreement between the Greater Toronto Airports and Lynx created a trust. The applicants argue that the King's Bench justice erred in contractual interpretation and failed to impose a constructive trust.

Key Takeaways:

  • The Edmonton Regional Airports Authority and other Canadian airport authorities have been granted permission to appeal a decision regarding the collection and remittance of airport improvement fees from Lynx Air Holdings Corporation.
  • The dispute centers around the interpretation of a Memorandum of Agreement between the Air Transport Association of Canada and signatory air carriers and airports.
  • The applicants seek to appeal a decision that found no trust was created between the airport authorities and Lynx Air regarding the fees, while a similar agreement between the Greater Toronto Airports and Lynx created a trust.
  • The applicants argue that the King's Bench justice erred in contractual interpretation and failed to impose a constructive trust.
  • The appeal is significant to the practice, as the Memorandum of Agreement has been in place since 1999 and applies to many signatory air carriers and airports.
  • The Calgary Airport Authority is owed over $2 million in fees, making the issue significant to the applicants.
  • The appeal has a prima facie merit, as the grounds put forward by the applicants are not frivolous.
  • The action will not be unduly hindered by the appeal, as the liquidation of Lynx has been completed, and the funds in question are being held in the Monitor's trust account.

Statistics:

  • Over $4 million in airport improvement fees owed to the applicants at the time of the initial order.
  • Lynx Air was $4 million in arrears on remittance of airport improvement fees.
  • The Calgary Airport Authority is owed over $2 million in fees.
  • Over $90 million in principal, and over $20 million in interest and costs, owed to the primary secured creditor, Indigo.
  • $87 million received by Indigo since the CCAA filing.
  • The Monitor's mandate has been extended to January 31, 2025.

Sources:

  • Edmonton Regional Airports Authority v Lynx Air Holdings Corporation, 2024 ABCA 380
  • Greater Toronto Airports Authority v Lynx Air Holdings Corporation, 2024 ABKB 514
  • Bellatrix Exploration Ltd v BP Canada Energy Group ULC, 2020 ABCA 178
  • Companies' Creditors Arrangement Act, RSC 1985 c C-36
  • Alberta Rules of Court, Alta Reg 124/2010