Fri, Aug 29, 2008
'Zoom' Comes To Screeching Halt, Stranding Passengers
The latest collapse of an airline stranded hundreds of
passengers on both sides of the Atlantic on Wednesday.
Zoom was a low-cost carrier founded by Scottish millionaires
John and Hugh Boyle, and operating in the UK and Canada. The
airline apparently was behind on its bills... and when Glasgow
Airport operator BAA grounded a Zoom flight Wednesday morning for
failure to pay air traffic control fees, it started a chain
reaction stretching across the ocean.
At about the same time, an inbound Zoom flight was grounded
before leaving Canada for failure to pay aircraft leasing and
airport fees. Those two cancellations stranded 361 passengers in
Glasgow.
Almost immediately, creditors smelled blood in the water, and
started moving to seize Zoom's assets. By Thursday afternoon, the
airline shut down its website, and declared itself insolvent.
"We deeply regret the fact that we have been forced to cease all
Zoom operations," John and Hugh Boyle told the London Times. "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... 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 pair went on to blame a $50 million increase in fuel costs
for its ill fortune, and said it will seek bankruptcy protection to
allow it to return to normal operation during refinancing. The
Boyles point out that Zoom earned a profit last year.
Both British Airways and Virgin Atlantic issued statements
Thursday, each saying they would offer discounted fares to
customers whose travel plans have been affected by the closure.
Zoom also posted a list of carriers operating from airports where
its former customers may still be stranded.
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