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Hundreds of passengers were stranded at airports in the UK yesterday after Zoom, the low-cost transatlantic airline, suspended all operations after failing to pay its bills.
The Anglo-Canadian airline, which employed 600 people, said yesterday that it would declare itself insolvent, blaming high fuel costs for its losses.
The fate of the airline was in jeopardy all day as planes were grounded and creditors attempted to seize assets.
A Zoom flight from Glasgow to Halifax and Ottawa was grounded by BAA, the airports operator, yesterday 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.
At Gatwick, two more Zoom flights were delayed and hundreds or passengers were forced to wait at the airport to hear if their flights would depart. After the Zoom website shut down, the airline said it was suspending all operations with immediate effect.
Zoom, which was founded by Scottish millionaires John and Hugh Boyle, said it regretted the inconvenience caused to passengers, many of whom may not be able to claim compensation for their cancelled flights.
John and Hugh Boyle said in a statement: "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. We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights.
"We have done everything we can to support the airline and left no stone unturned to secure a refinancing package that would have kept our aircraft flying. Even as late as today we had secured a new investment package but the actions of creditors meant we could not continue flying.
"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."
The airline had said yesterday that it hoped to get its services back to normal. It sought bankruptcy protection to allow it to continue operating without having its assets seized by creditors.
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My two sons were due to travel to San Diego with Zoom on 12th Sept. to visit their father. Both saving up over the last year. The youngest a student worked in his spare time late at night to pay for this trip. They are now left devastated, as they both paid on debit cards. I am more than angry.
Jill Savage, Norwich, Norfolk
BA and Virgin offer came too late for us. Stranded on 28 Aug in Vancouver. Air Canada flights home cost extra £3000. Now been told that travel insurance does NOT cover for reimbursement of these flights. Travel insurance pointless in this case - READ ALL SMALL PRINT - even that hardly visible!
Helen, Oxford,
THE era of cheap travel is not over . utter garbage graham . in 1999 iberia charged £600.00 for a midweek flight to alicante . ryan will do it for under 200 ll year long today . in 1970 !!!my family paid 350 each to fly to trinidad. virgin will take me tobago next week for 450 .
rob ramroopsingh, success village, trinidad
Zoom... boom ... bust
neil, frankfurt, Germany
NOOOO....Not that!!! Not flights between the US and North America!!!!
Oh wait, I'll just do the sensible thing and drive...
Oswald Cobblepot, Niagara NY , USA
Zoom passenegers only recourse to compensation is their credit card company. No travel insurance will cover cancelled flights due to airline bankruptcy and Zoom aren't members of IATA. We should question why the directors continued to trade - as they had several months of prepaid ticket sales!!!
Malcolm, London, England
"Hundreds of passengers stranded as flights by low-cost airline operating between US and North America are stopped"
Great Googly Moogly!! Now how am I ever going to get from Toronto to Buffalo...?
Jimmy C. Corn, Rhinelander WI, USA
And some of us who cannot afford to travel any other way will stay with cheap travel! I am sorry for those stranded ......if nothing else it is good advice to take travel insurance and check whether your credit card covers you for this in the future. Zoom was a decent airline, too bad they are gone.
Deborah, Toronto, Canada
Graham I agree with James. And many businesses will sell with slim margin depending on what they want to achieve! zoom could just not make a profit when oil prices are escalating all the time!!!! do you want a BA monopoly on all routes of the UK? I think not.
Rose, Stirling, UK
If they cant pay there bills why would Jim McGrory, 62, from St Andrews, expect compensation!
Chris, London, UK
How are the organisers going to fill the Olympic Stadium in 2012 if, as is now being illustrated, cheap flights and their operators will then be non-existent?
I hope the Olympic Committee are considering these very serious issues. To my mind, it's a financial disaster waiting to happen.
Shirley Bowen, Blackpool, UK
To try and run an airline on borrowed money is a dangerous business enterprise, especially in a crowded market. It's really a fashion selling thing.
David Vinter,, Louth, Lincs,, UK.
IF any of these people booked through an ATOL bonded Agency they would have been protected and put on another flight, one benefit of booking through an Agency and not saving 2p by booking on the airlines website.
Stu, London, UK
The best thing for the economy, the airline industry and the environment is for the fares to re-establish themselves at a level reflective of the real costs of operations. A few more should go to the wall including those whose pathetic management is underwired by government. Like every US carrier is
Steve, Stansted, UK
Graham,
Did you read the article? Zoom were unable to recover their costs because of an unprecedented rise in oil prices. Not because they offered fares at a loss. What do you expect them to do - retrospectively increase fares when customers have already booked and paid?!
James Carlson, Bournemouth,
Phew !! We returned home to Cardiff on a Zoom flight today.
We were held up at Belfast as some airport officials boarded the plane for talks with the pilot and crew.We had originally planned to travel back from Vancouver on 9/11 but had changed our plans a couple of weeks ago for personal reasons.
Ray W, Malvern, UK
The airlines need to charge fares that actually cover their costs and allow the business to be viable. All these crazy, cheap flights are not sustainable in the long run. What other business sells its products at a loss?
Passengers have to realise that the era of super cheap air travel is over.
Graham Stevens, London, UK