Total debts of Zoom Airlines nearly £25 million

Zoom Airlines, the Canada-based low-fare trans-Atlantic airline which suspended all operations on August 28, 2008, and filed for bankruptcy protection owing to its deteriorating financial position, has said its total debts come to about  £20 million-£25 million.Zoom Airlines, based in Ottawa, Ontario, Canada, had operated year-round scheduled services to Europe, as well as charter services to South America, Caribbean, and destinations in Southern United States with Canadian tour operators.

Zoom Airlines, launched in 2002 by Scottish brothers John Boyle and Hugh Boyle, operated from 5 airports in the United Kingdom.

The company has blamed its financial difficulties on the huge rise in its fuel bills.

The company had attempted to get a re-financing package that would have kept its planes flying.

The airline, based at London’s Gatwick Airport, employs 450 people in Canada and 260 people in the United Kingdom.

Media in Canada had reported that Zoom Airlines owes its creditors over $121.9 million, according to a list filed with Canada’s Office of Superintendent of Bankruptcy. The amount, the reports said, included $78.5 million in “deferred revenue,” which normally refers to money taken in through advanced ticket sales in airline insolvency cases.

A spokesman for the airline rejected some reports which said that Zoom Airlines had debts amounting to £62.7million. He explained in a statement: “The position of the management of Zoom Airlines is that that is not an accurate reflection of the debts of the company. We don’t know how this figure has been arrived at. It’s likely that the debts will be substantial. Our estimate is that it’s likely to be in the £20 million-£25 million category, but it’s not possible for anyone at this time to give a definitive figure.”

The spokesman added that Canada’s Civil Aviation Authority (CAA), which monitors airlines, would not have allowed Zoom Airlines to reach the debts levels reported.

The suspension of services by Zoom Airlines had resulted in passengers on both sides of the Atlantic spending extra money on alternative flights to return home.

After suspending flights, Zoom Airlines asked passengers to seek refunds from their credit-card companies and book tickets on other airlines.

The Canadian Transportation Agency – the independent, quasi-judicial tribunal that makes decisions on many economic matters relating to federally regulated modes of transportation (air, rail, and marine) – advised affected passengers to keep all their receipts, including those issued for alternative travel.

Hugh Boyle, the Scottish-born co-founder of Zoom Airlines, said in an interview with the Star newspaper: “A very aggressive creditor seized one of Zoom’s seven planes in Calgaryy, setting into motion a domino effect that brought down the airline.”

“It is possible,” Boyle went on, “but unlikely that Zoom could fly again one day.”