Image: A passenger holding a statement provided by Zoom Airlines
Clive Gee  /  AP
A passenger at London's Gatwick airport reads a statement provided by Zoom Airlines after the carrier suspended all flights on Aug. 28, leaving hundreds stranded in Canada and Britain.
updated 8/29/2008 1:31:42 PM ET 2008-08-29T17:31:42

Thousands of passengers scrambled to rearrange travel plans Friday after the sudden collapse of trans-Atlantic budget airline Zoom, amid concerns that hundreds would not get their money back.

The Ottawa-based carrier suspended all flights Thursday, citing high fuel prices. Britain's Civil Aviation Authority advised passengers to fly on other airlines and apply to their credit card companies for reimbursement.

While passengers who reserved their flights by credit card or as part of a package holiday are all but guaranteed a refund, there is no such protection for those who paid by cash or check.

Morven MacLeod had been scheduled to travel with Scotland's Inverness Gaelic Choir to a music festival in Nova Scotia in October. She said the 25-member group had paid about 7,000 pounds (U.S. $12,750) for their tickets by check.

"Everyone has worked so hard, so for this to happen is hard to take. It's all still a bit surreal," MacLeod said. "There's no way we can raise funds in the next five weeks through the normal means, so short of finding a rich benefactor it's hard to know what we can do."

Travel industry group ABTA called on the British government to require all airlines to provide financial protection for their customers.

"This failure in a tough economic climate, along with numerous other airline failures this year, highlights the importance of having financial protection in place when you book flights," said the association's chief executive, Mark Tanzer.

Zoom was a leading trans-Atlantic budget airline, specializing in flights from regional centers such as Glasgow, Manchester and Cardiff in Britain and Ottawa and Calgary in Canada. Its routes targeted vacationers, with the winter schedule packed with flights to Canada's ski slopes, and the summer and Easter break schedules teeming with sun destinations like Florida.

Zoom's founders, Hugh and Jack Boyle, apologized to passengers but said the economic downturn and sharp rise in the price of aviation fuel had made it impossible to keep going. The Boyles said the airline had tried and failed to pay bills to airports, suppliers and aircraft creditors.

Zoom said British Airways and Virgin Atlantic had agreed to offer special rates to Zoom customers who had been left in the lurch.

But some of the 4,500 people in Britain due to fly on the airline in the next week were struggling to make alternative plans.

"The other airlines are quoting 2,500 pounds (U.S. $4,500) and we just can't do it," said Isobel Shannon, who had planned to fly from Glasgow for a two-week holiday in Nova Scotia with her husband. "We'll have to cancel our trip but the Canadians need to get home, they are just going to have to pay out."

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 Britain.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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