Zoom Airlines Stops Operating

Both the Canadian and the UK airline subsidiaries of the Zoom Airlines Group operated Boeing 767-300ERs painted in a distinctive bright-blue color scheme. The Zoom Airlines group filed for insolvency on Aug. 28, 2008, citing high fuel costs, weakening North American and European economies, and creditor pressure for its decision. Credit: Doug Bull

Transatlantic airline group Zoom Airlines has stopped operating and is filing for insolvency, saying its creditors have forced the move even though Zoom secured a new investment package yesterday.

Zoom, which operates two separate long-haul airlines, one based in Ottawa, Ontario and the other in the UK, said on its Web site flyzoom.com that it had suspended operations with effect from 18:00 UTC (2:00 p.m. EDT) today. The airline attributed the financial difficulties which had precipitated the creditor action to major increases in jet-fuel prices and softening North American and European economies.

"All flights scheduled to depart from (Zoom's destinations) have been cancelled and Zoom's aircraft have been grounded," said Zoom's Web-site statement.

Both Zoom Airlines Inc and Zoom Airlines Ltd, respectively the Canadian and UK airline subsidiaries, are filing for insolvency proceedings in their home countries today, the statement said. Zoom was founded by two Scottish brothers, Hugh and John Boyle, who operated a very successful travel business in their native country in the 1980s and 1990s and emigrated to Ottawa in the 1990s.

Since its formation in the mid-1990s, Zoom has specialized in low-cost scheduled transatlantic services. Operating a fleet of four Boeing 767-300ERs painted in a distinctive bright blue color scheme, the original Canadian carrier served a sizeable number of UK destinations, as well as Paris and Rome, from airports throughout Canada. It operated less-than-daily schedules to most destinations, but served the Toronto-London Gatwick route on a daily basis.

Because the Canadian airline didn’t have rights to serve destinations in the United States, Zoom Airlines Ltd was formed in 2006 to offer flights from British airports to destinations on the other side of the Atlantic. The UK airline, which also flew bright-blue 767-300ERs, operated scheduled services to New York JFK, Fort Lauderdale, San Diego and Bermuda, and served a variety of Canadian cities.

"For customers who have future travel plans involving a Zoom flight for which reservations and payment have been made, you should refer to your credit or debit card company to apply for a refund. We have set out details of other airlines who operate the same or similar routes to those flown with Zoom in the hope that this may assist you in making alternative travel plans to replace the flights that you had booked with Zoom," the airline said on its Web site.

"If your travel arrangements have been made as part of a holiday package originating in the UK and booked through a holiday company, you may be able to make a claim under the CAA's Air Travel Organiser's Licence scheme. For information on this, please consult the CAA ATOL website at www.atol.org.uk," the statment advised.

"We deeply regret the fact that we have been forced to cease all Zoom operations. It is a tragic day for our passengers and more than 600 staff," said Zoom founders Hugh and John Boyle in the statement.

"We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights," the statement quoted the Boyle brothers as saying.

"We have done everything we can to support the airline and left no stone unturned to secure a re-financing package that would have kept our aircraft flying," the statement continued. "Even as late as yesterday we had secured a new investment package but the actions of creditors meant we could not continue flying."

The Boyles' statement said: "The collapse of Zoom is a result of matter beyond our control. Only last year Zoom Airlines made profit, but that turned into a loss in the last year due to the unprecedented increase in the price of aviation fuel and the economic climate. The price of oil resulted in our fuel bill jumping by nearly $50 million in one year and we could not recover that from passengers who had already booked their flights.

"We would like to thank the many thousands of passengers who chose to travel with Zoom during the last seven years and efforts of the airline's staff."

Zoom Airlines said it had been advised that British Airways and Virgin Atlantic Airways are "graciously offering special fares to assist Zoom customers that have been displaced by the suspension of our services."

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