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Zoom Airlines, a low-cost carrier operating between North America and Europe, has suspended operations.

Published: 29 Aug 2008

Zoom Airlines, a low-cost carrier operating between North America and Europe, has suspended operations.

Both Zoom Airlines Inc and Zoom Airlines Ltd, the Canadian and UK airlines, have started administration proceedings in their home countries. All Zoom flights have been cancelled and aircraft grounded.

Hugh and John Boyle, the founders of Zoom, said: "We deeply regret the fact that we have been forced to suspend all Zoom operations. It is a tragic day for our passengers and more than 600 staff."

According to the airline, the increase in the price of oil has added around $50 million to airline's annual operating costs and it could not recover that from passengers who had already booked their flights.

"The suspension of operations is a result of the exceptionally difficult trading conditions which have affected all airlines over the last 12 months. We have worked hard over the last seven years to build up a successful business but have incurred losses in the current year due to the unprecedented increase in the price of aviation fuel and the economic climate," stated the company.

"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 late today we believed we had secured a new investment package to ensure future operations but the actions of creditors meant we could not continue flying. Having been unable to complete the investment package the directors of Zoom had no option but to instigate administration proceedings," added the statement from company's founders.

Zoom is the latest of several small international carriers to run into financial difficulty as a result of the surge in fuel prices. Other casualties have included the transatlantic all-business class carriers Maxjet, Eos and Silverjet, and the long-haul, low-fare carrier Oasis Hong Kong Airlines.