Plane seized as Zoom Airlines folds
Hundreds of travellers left stranded at airports
Last Updated: Thursday, August 28, 2008 | 7:50 PM ET
CBC News
A Zoom plane sits on the tarmac at the Calgary International Airport. (Louise Moquin/CBC) Zoom Airlines Inc. sought court protection from creditors and suspended all operations Thursday, as one of its Boeing jets was seized and hundreds of passengers were left stranded at airports in Canada and abroad.
Ottawa-based Zoom Airlines, which flies in Canada, the Caribbean and Europe, filed a notice of application, blaming its troubles on the sagging economy and the "horrendous" increases in fuel prices that resulted in a $50-million rise in operating costs in 2007 alone.
In a statement, Zoom executive chair Hugh Boyle said the company's British and Canadian operations "have sought creditor protection by filing legal notices of intention to appoint an administrator in both the U.K. and Canada."
The company also said Thursday afternoon on its website that all flights scheduled to depart have been cancelled and its aircraft have been grounded.
The Halifax International Airport Authority, which is owed nearly $200,000 by the airline, obtained and executed late Thursday a court order allowing it to seize one of Zoom's grounded Boeing planes, Peter Spurway, the airport authority's vice-president, said.
"The plane is worth quite a bit more than that, though I don't know what the going rate is," Spurway said Thursday night. "But we'll just hang on to it and continue our discussions with Zoom tomorrow."
Outstanding debts were the carrier's undoing. Ground crews in Halifax refused to release the jet earlier in the day because their company hadn't been paid $2 million owed, while a flight slated to leave Glasgow was held back by the Civil Aviation Authority because of unpaid accounts.
Outside Zoom's Ottawa headquarters on Hunt Club Road, the doors were locked and people were seen leaving the building with boxes and plants, loading them into cars and driving away.
The unexpected move jeopardized the flights of hundreds of passengers on Wednesday and Thursday at airports in Canada, the Caribbean and Europe.
Dozens of passengers stranded in Halifax bedded down Thursday night in the airport's observation deck with sleeping mats, pillows and blankets provided by the airport.
Erin Cott, who learned her flight to Calgary from Glasgow was cancelled Thursday after being first told it would be delayed, ended up paying $1,000 for a ticket on another airline so she could fly Friday for a Saturday wedding.
"This is the worst airline I've ever booked with," she told CBC News.
Imran Usmani said he felt "gutted" after learning of the airline's troubles. The university student, who is visiting Toronto, is supposed to be on a Zoom flight to Glasgow on Sept. 13 to return to school. Now he's wondering where he'll find the money for another ticket.
Zoom 'sorry for the inconvenience': founders
Zoom said customers who had future travel plans with the airline for which reservations and payment have been made should refer to their credit or debit card company for a refund. British Airways and Virgin Atlantic are offering special fares to assist stranded Zoom passengers, the company said, adding that a list of other airlines that could assist them was available on its website.
Vancouver resident Sonia, who didn't give her surname, holds up a statement handed out by Zoom Airlines at Gatwick airport in London after the carrier suspended all flights on Thursday. Hundreds of passengers were left stranded in Canada and Britain. (Clive Gee/Associated Press) "We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights," Zoom founders John and Hugh Boyle said in a release. "Even as late as yesterday we had secured a new investment package but the actions of creditors meant we could not continue flying."
On Wednesday, dozens of passengers booked on a Zoom flight bound for Vancouver were stranded at Calgary International Airport.
The discount carrier owes money to fuel suppliers and airports, including $400,000 to the Calgary Airport Authority, said airport authority spokesman Bryce Paton.
"They certainly owe lots to the Calgary Airport Authority, and we understand [to] other airports across the country," Paton said.
Paton said about 97 passengers who got off a flight when it landed in Calgary were scheduled to continue to fly to Vancouver with Zoom Airlines.
WestJet came to their rescue, booking them on several flights out of Calgary, he said.
Another 69 passengers, who were scheduled to fly to the U.K., learned Wednesday evening that Zoom had cancelled their flight.
In Ottawa, passengers were told Wednesday that their flight to London Gatwick was delayed, only to learn Thursday it was cancelled. Many scrambled to retrieve their baggage from the carousel and buy seats on an Air Canada flight, but at least one man decided to go home and cancel his vacation.
Ottawa airport spokesperson Krista Kealey said the airport was aware of the situation at other airports, but Zoom didn't owe any money to the Ottawa airport and had always been "a good customer."
Zoom Airlines employed 450 people in Canada and 260 in Britain.
With files from the Canadian Press
