Zoom Co-Founder 'Optimistic' Day Before Planes Grounded
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ZOOM AIRLINES abruptly closed operations on August 28, leaving a trail of debts totalling $122 million.
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There was shock and confusion in the airline industry on August 28 when Zoom Airlines, a discount trans-Atlantic carrier, abruptly closed operations leaving a trail of debts totalling $122-million.
According to preliminary filings under the Bankruptcy and Insolvency Act, this figure includes $78.6-million garnered mostly from advance ticket sales through consumer bookings that will no longer be flown.
Eight major Canadian airports are owed a total of $3.7-million, including $1.9-million in Toronto, $515,800 in Montreal, $489,000 in Vancouver, $446,400 in Calgary and the rest spread across Halifax, Ottawa, Winnipeg and Edmonton, the filings show.
The list of wide-ranging creditors also includes aircraft lessor International Lease Finance Corp. (owed $4-million), plane caterer Cara Operations Ltd. ($835,200), Nav Canada ($812,300), The Score television network ($15,600) and snack supplier Krispy Kernels Inc. ($12,500). Even tour operator Go Travel Direct, founded by Boyle, is owed $285,500.
Within hours of the collapse, the airline released a statement which read "Zoom Airlines sincerely regrets to advise its customers that it has suspended operations with effect from 18:00 UTC on Thursday 28 August.
"All flights scheduled have been cancelled and Zoom's aircraft have been grounded. Both Zoom Airlines Inc. and Zoom Airlines Ltd., the Canadian and UK airlines, will be filing for insolvency proceedings in their home countries today."
Hugh and John Boyle, the founders of Zoom, 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 re-financing package that would have kept our aircraft flying. Even as late as yesterday 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 matters 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.
"We would like to thank the many thousands of passengers who chose to travel with Zoom during the last seven years and efforts of the airline's staff.
"We have been advised that British Airways and Virgin Atlantic are graciously offering special fares to assist Zoom customers that have been displaced by the suspension of our services."
For customers who have future travel plans involving a Zoom flight for which reservations and payment have been made, you should refer to your credit or debit card company to apply for a refund.
If your travel arrangements have been made as part of a holiday package originating in the UK and booked through a holiday company, you may be able to make a claim under the CAA's Air Travel Organiser's Licence scheme. For information on this, please consult the CAA ATOL website at www.atol.org.uk.
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