News

Is Zoom doomed?

28 Aug 2008 by Mark Caswell

Zoom Airlines has
announced it has sought creditor protection in view of “‘acutely difficult’
trading conditions within the aviation industry”.

The Canadian airline
says it is continuing to operate services across its network, following “operational
difficulties” last night when one of its aircraft was grounded in Calgary. Local media have reported that the aircraft’s lease had been terminated by its owners due to unpaid bills.

Hugh Boyle, executive chairman of Zoom, said today: “Zoom Airlines
Limited, based at London Gatwick and Zoom Airlines Inc, based in Ottawa Canada,
have sought creditor protection by filing legal notices of intention to appoint
an administrator in both the UK
and Canada.

“The airline’s flights will continue to operate and the decision to
instigate creditor protection proceedings means that the demands of existing
creditors are frozen while we continue negotiations on an investment package
which already are at an advanced stage.

“This situation has resulted in delays for passengers last night and
today and we are working extremely hard to get our flights back on schedule. We
sincerely apologise for the inconvenience this has caused passengers.

“Our trading position is a direct consequence of the horrendous increase
in the price of aviation fuel and the economic climate. The rise in the price
of fuel resulted in a $50 million increase in our operating costs during the
last year alone and that coupled with the general economic downturn has led to
difficulties which are being felt throughout the industry.”

Low-cost carrier Zoom serves routes from the UK
to both Canada and the US, although it recently announced it would be
dropping its London Gatwick to New
York flights from October 31 (see online news July
31
).

The news follows the demise of fellow low-cost long-haul carrier Oasis
Hong Kong Airlines in April (see online news April 9), and of three
all-business class airlines (Maxjet, Eos and Silverjet) over the last nine
months.

For more information visit flyzoom.com.

Report by Mark Caswell

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