OTTAWA - A spokesman for the Canadian Transportation Agency says it is "pulling out all the stops" to ensure stranded passengers get home after Zoom Airlines abruptly shutdown its operations Thursday.
"We were caught by surprise. We learned about the situation at the same time as everybody else," said Jadrino Huot, spokesman for the Canadian Transportation Agency. "Our top priority right now is to provide advice to affected ticket holders about their options, rights and recourse and refer them to appropriate organizations for immediate help."
The low-cost transatlantic carrier left hundreds of passengers stranded in Canada and Europe.
Huot said his agency is also working to ensure that priority will be given to other air carriers seeking additional charter and flight permits, to provide alternate transportation to stranded passengers.
"We will expedite the matter for sure and we will give priority to those requests from charter air carriers who want additional flights to bring back stranded passengers from wherever. We will put a priority on those applications."
Huot said he has no idea how many passengers have been affected by the shutdown. The Transportation Agency's mandate is to administer all laws and regulations pertaining to air transportation in Canada.
In a statement Thursday, Hugh and John Boyle, the founders of Zoom, said: "We deeply regret the fact that we have been forced to cease all Zoom operations. It is a tragic day for our passengers and more than 600 staff. We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights."
The company has advised all passengers to rebook their flights on other airlines.
It was not immediately clear whether the company has plans to resume at any time.
"We would like to thank the many thousands of passengers who chose to travel with Zoom during the last seven years and efforts of the airline's staff," the statement said, adding: "We are extremely sorry the airline could not continue."
The Zoom executives blamed the company's woes on the "unprecedented rise in the price of aviation fuel" and the "general economic downtown that has made it impossible for operations to continue."
These two factors resulted in a $50-million increase in operating costs, the statement said.
The airline has also sought protection from its creditors and has begun insolvency proceedings.
Zoom Airlines has both a Canadian and British arm. Both companies are affected.
The airline employs 450 staff in Canada and 260 in the U.K.
It operated flights from six U.K. airports, as well as Paris and Rome and flew to eight destinations in Canada, New York, San Diego, Calif., Fort Lauderdale, Fla., and Bermuda.
The travel woes for Zoom passengers began Wednesday with flight delays and, by Thursday, cancellations. There was no announcement on the company website, which had been taken offline by early Thursday afternoon, about the possibility that all flights would be cancelled.
"We were told to be here at 9 a.m. sharp to check in, but no one's here," said passenger Eileen Moss at Ottawa International Airport on Thursday morning. Zoom staffers arrived around 9:30 a.m. to a maelstrom of unhappy passengers, but quickly left the counter for a "company briefing."
Equally visibly distraught airline employees were later seen leaving the company's Ottawa headquarters once word spread that the airline was enacting massive layoffs.
In Halifax, passenger Karen Kravchenko was supposed to be visiting family in Canada.
She was flying to Ottawa from Gatwick Airport in London, England. The airline cancelled operations as she landed for a layover in Halifax, leaving her and hundreds of other passengers without a flight to their original destination.
"We were left to sit for seven hours on the tarmac," she said Thursday. "We were very tired. Babies were crying all the time."
Airline industry expert Ramy Elitzur, a financial analyst at the University of Toronto's Rotman School of Management, said with few exceptions, every airline is struggling with high fuel costs.
"I've been saying for a long time that we'll be seeing many of them go down the drain," he said.
"I don't get why people want to be in this business. It's a terrible business. Everyone thinks it's sexy and you can make money. The truth is, it's one of the toughest businesses on the face of the Earth."
But the outlook for the budget airline did not always look so gloom.
Just last month, Zoom announced they were planning on expanding their flights to Europe in the summer of 2009.
Meanwhile, Transport Canada spokesman Jean Riverin said that Zoom has voluntarily surrendered their operating certificate so all of their aircraft will remain grounded.
"We were made aware of the situation yesterday and the aircraft seizure is a business decision outside of Transport Canada's mandate," she said. "We will, however, follow up with the company to review its operation."
As a regulator, Transport Canada's mandate is to ensure the safe operation of all aircraft in Canadian skies.
"They made a decision; they were not ordered by anyone, they were the one that made the decision to surrender their operating certificate which allows them to fly," Riverin said.
She also confirmed Zoom aircraft were seized because of a default in payments, in excess of hundreds of thousands of dollars.
The budget airline was created in 2001 following the 9-11 terrorist attacks in New York, in what was considered a troubling time for the international airline industry.
