Hundreds Stranded As Airline Shuts Down

(AP)  Hundreds of passengers were stranded Thursday in Canada and Britain when Zoom Airlines, a cash-strapped small Canadian carrier, shut down after creditors grounded its leased planes.

Zoom's founders apologized to passengers several hours after their flights had been canceled, explaining that the airline had to be suspended after the company failed to pay bills to government, airports, suppliers and aircraft creditors.

"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," company founders Hugh and John Boyle said in a statement.

Zoom, a privately owned company, blamed the economic downturn and the unprecedented rise in the price of aviation fuel for its financial woes. Rising fuel costs added $47.5 million in operating costs for the airline in the last year, said Boyle.

In Halifax, airport volunteers were trying to help more than 200 passengers reach their destinations with other airlines after a plane destined for Ottawa was grounded after it arrived from London's Gatwick Airport, said airport spokesman Peter Spurway.

In Calgary, dozens of passengers were transported to Vancouver, British Columbia, by WestJet, Canada's second-largest airline, on Wednesday afternoon after Zoom's Boeing 767 was grounded by a court order.

The owner of the Boeing 767 terminated Zoom's lease on the aircraft, and the plane was on the ground until the matter is sorted out, said Wayne Reimer, Calgary airport's duty manager.

In Scotland, the Civil Aviation Authority kept a Zoom plane at Glasgow airport for nonpayment of charges from Eurocontrol, the European organization for the Safety of Air Navigation, and NATS (the air traffic services provider). That aircraft had been scheduled to travel Thursday morning to Halifax, Nova Scotia, and Ottawa.

The effects of rising fuel costs have been evident for many airlines. AMR Corp.'s American Airlines, UAL Corp.'s United Airlines, Continental Airlines Inc., Delta Air Lines Inc. and Northwest Airlines Corp. have all announced capacity cuts, most of which take effect next month.

Zoom employed 450 people in Canada and 260 in the United Kingdom before the shutdown.

[whitemale08]

and his higher taxes (not fiction, he has stated that he will raise taxes), this tax increase won''''t help because Congress is still going to continue a practice of deficit spending. You want the problem fixed, pressure you congressmen and senators to pass a balanced budget amendment that will force them to balance the budget each year. That is what is needed to start fixing the economy, not more taxes.


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Posted by damom123 at 01:44 PM : Aug 29, 2008--

Bush and Reagan are to blame for this failed economy. When you eliminate good paying jobs for the sake of Wall Street then you have to supplement WalMar wages with credit cards and home equity loans.

When that runs out then the Congress has to spend money on welfare. It was Bush who wanted to go to war in Iraq and blow the defecit and the Republican Congress that went along with him for 6 years spending 100s of billions year after year ballooned the defecit thus causing all of the hyper-inflationary prices in oil.

Besides that "government class" is no good anyways, they don''t teach what really happens and stay away from college MBA degrees because they teach you nothing significant about the Federal Reserve System which is why you know diddly squat!

[trrrorislam7]

who cares,,, its a tin can airline EHHHH!!!

[nothappyatall]

"Rising fuel costs added $47.5 million in operating costs for the airline in the last year, said Boyle. "

Just imagine how much fuel is WASTED doing little more than transporting Aunt Mildred''s fat azz 3 states over so she can have a thanksgiving dinner with family and return, the fact that this ONE small airline''s fuel costs INCREASED $47 million should be a clue just how much fossil fuel they WASTE while generating that much more pollution contributing to climate change.

[rgreuman]

BRUCE STEVENS: As most people who are in to "equities"
or who follow the airline industry, SouthWest Airlines
has, for years, used hedging to "lock in" LOW jet fuel
costs...this has enable them to SAVE many billions of
dollars to their bottom line...this is to end next year
when their costs will climb radically to near equal that
of other airlines...at that time, the "playing field"
will be near equal and they will have to compete or
die, just as the others do.

[rgreuman]

BRUCE STEVENS: As most people who are in to "equities"
or who follow the airline industry, SouthWest Airlines
has, for years, used hedging to "lock in" LOW jet fuel
costs...this has enable them to SAVE many billions of
dollars to their bottom line...this is to end next year
when their costs will climb radically to near equal that
of other airlines...at that time, the "playing field"
will be near equal and they will have to compete or
die, just as the others do.

[sistatee-2009]

Well I am assuming here that you are an American SistaTee. If that is the case then obviously you didn''''t read the article. This is a Canadian airline. US taxpayers will be out of any bailout loop.
Posted by docpeter at 07:50 AM : Aug 29, 2008

Ain''t nobody out of the bailout loop. We been bailin'' out ENTIRE COUNTRIES for God''s sake!

[sociald63]

this is old news, fer cryin out loooud

[dbstevens]

All these troubled airlines blame rising fuel costs, the economy, etc. But then how do you explain SouthWest Airlines'' success? It''s management, nothing else. They should stop placing blame and start taking a good look at what Southwest is doing.

[ktshanahan]

I read all these comments blaming Bush for the failure to the economy and I realize one thing, you all must have failed your government classes in school. The president does not control the spending in our government system. That is controlled by congress, the same congress that the Democrats have been in control of since 2006. And you people want to elect Obama and his higher taxes (not fiction, he has stated that he will raise taxes), this tax increase won''t help because Congress is still going to continue a practice of deficit spending. You want the problem fixed, pressure you congressmen and senators to pass a balanced budget amendment that will force them to balance the budget each year. That is what is needed to start fixing the economy, not more taxes.

[bob5ford]

"airline had to be suspended after the company failed to pay bills to government"
Canada''s socialism at work! Socialized medicine that leaves elective procedures to the U.S. Gun registration that they can''t do. And now an airline out because it can''t pay the government. The U. S. should aspire for such glory. No wonder all the Canadians cone to Florida!!!