Hundreds of travellers left stranded by the collapse of the low-fare airline Zoom were trying to make their way home today, many of whom will be ineligible for compensation for their cancelled flights. A further 60,000 passengers have forward bookings with Zoom, many of whom could also lose their money.
The Anglo-Canadian carrier, which employed 600 people, grounded all flights last night as it prepared to go into administration. It said yesterday that it would declare itself insolvent, blaming high fuel costs for its losses.The alarm bells started ringing on Wednesday evening when a Zoom plane in Calgary bound for Glasgow was grounded by the leasing company over unpaid debts. The fuel supplier told the airline it wouldn’t refuel the aircraft because of outstanding debts.
A flight from Glasgow to Halifax and Ottawa was yesterday grounded by BAA, the airports operator, for non-payment of European and British air traffic control fees, stranding 205 passengers. All flights were then cancelled yesterday as creditors attempted to seize assets, prompting its chairman Hugh Boyle to release a statement.
He said: “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 resume services as normal. It sought bankruptcy protection to allow it to continue operating without having its assets seized by creditors.
However, it is understood that aviation regulators refused to allow the airline to continue operating without the immediate payment of debts to air traffic controllers.
Zoom’s demise echoes that of Laker Airways, the first airline to attempt to offer low-cost transatlantic services. Laker Airways ran from 1977 until 1982, when it went bankrupt partly because of the early 1980s recession, but mainly other airlines’ attempts to undercut Laker.