Thursday, August 28, 2008

Insolvent transatlantic carrier Zoom Airlines ceases operations

Zoom Airlines B767-300ERLow fare transatlantic carrier Zoom Airlines suspended operations today due to insolvency. According to a message posted on the Zoom website, the airline suspended operations with as of 18:00 UTC on Aug. 28, 2008. All flights have been canceled and Zoom's aircraft have been grounded.

The message on the website explained, "Both Zoom Airlines Inc. and Zoom Airlines Ltd., the Canadian and UK airlines, will be filing for insolvency proceedings in their home countries today."

News reports, including a story published today by the UK's Times Online, say that two of Zoom's aircraft were refused permission to depart as creditors attempted to seize assets in the hours before the insolvency announcement. From the Times Online:
A Zoom flight from Glasgow to Halifax and Ottawa was grounded by BAA, the airports operator, this morning for non-payment of European and British air traffic control fees, stranding 205 passengers.

A further 156 passengers at Glasgow were also left without a flight when their plane was grounded in Canada for failure to pay aircraft leasing and airport fees.
The Times article went on to say that aviation regulators presumably refused to allow the airline to continue operating without the immediate payment of debts to air traffic controllers, and that suppliers were refusing to refuel Zoom's aircraft unless they were paid in cash, which would have cost about £30,000 per flight. In addition, Reuters reports, Zoom is said to owe Calgary's airport authority C$400,000 ($380,000) in landing fees.

Zoom founders Hugh and John Boyle said in a statement that the airline's demise was due to "the unprecedented increase in the price of aviation fuel and the economic climate." They said they had been trying to obtain re-financing for their financially troubled airline, but had failed to do so. As a result, the airline had to cease operations.

In its story about the demise of Zoom Airlines, the AFP news service quoted an Transport Canada official who said that the carrier had "voluntarily returned its operating license to Transport Canada."

No word yet on the fate of the airline's hundreds of employees. It is not clear if any arrangements were made to repatriate Zoom crews who were at out-stations at the time of the shut-down, or if they have been left stranded. Anyone who has such information is welcome to post it in the comments.

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