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.