(Recasts with operations suspended)
CALGARY, Alberta Aug 28 Zoom Airlines, a
Canadian discount transatlantic carrier stung by sky-high fuel
costs, canceled all flights and began bankruptcy proceedings on
Thursday, stranding passengers at several airports.
Ottawa-based Zoom said it had tried until midday Thursday
to secure a financial lifeline that would keep it aloft after
rising jet fuel prices added $50 million in annual costs.
But creditors refused to give Zoom any more time, forcing
it to file for creditor protection in Canada and Britain.
"We deeply regret the fact that we have been forced to
cease all Zoom operations," Hugh and John Boyle, co-founders of
the privately held company, said in a statement.
"It is a tragic day for our passengers and more than 600
staff," the statement said.
"We are desperately sorry for the inconvenience that this
will cause passengers and those who have booked flights."
The carrier, which has operated since 2002, has 450
employees in Canada and 260 in the United Kingdom.
It flew to six U.K. destinations as well as to Paris and
Rome. It also operated service to eight Canadian cities as well
as New York, San Diego, Fort Lauderdale and Bermuda.
In Britain, Times Online reported the carrier's planes were
grounded by the Civil Aviation Authority for failing to pay air
traffic control fees, stranding hundreds of passengers.
In Calgary, 69 Zoom passengers bound for Glasgow, Scotland,
and London's Gatwick Airport were stranded when the firm that
had leased an aircraft to Zoom terminated the lease, local
In addition, Zoom is reported to have owed the Western
Canadian city's airport authority C$400,000 ($380,000) in
Zoom advised those who have paid for future reservations to
contact their credit card companies to apply for refunds.
It also said it would advertise details of other carriers
that fly the same or similar routes.
Surging fuel prices have led several airlines to seek legal
shelter from creditors as their costs have soared. Established
players, meanwhile, have been forced to chop staff, reduce
capacity and impose new fees to deal with the burden.
In addition, numerous Canadian start-up carriers have
failed while trying to undercut big carriers like Air Canada
ACa.TO and WestJet Airlines (WJA.TO) on fares.
In the last eight years, such airlines as Canada 3000,
Jetsgo, CanJet and Harmony Airways have all been forced to
scrap scheduled service.
Canadian Industry Minister Jim Prentice said in Inuvik,
Northwest Territories that he had yet to be briefed on Zoom's
collapse, but acknowledged the tough times in the sector.
"I have had discussions with representatives of both Air
Canada and WestJet about fuel costs and what that is doing to
the industry," Prentice said.
"If we find passengers in difficult circumstances,
everybody is going to have to work together to deal with
(Reporting by Jeffrey Jones. Additional reporting by Allan
Dowd in Inuvik and Wojtek Dabrowski in Toronto; Editing by Ted