By Darren Cronian on Friday, August 29th, 2008

I am tired of writing about airlines lately, but it is sad to see another airline go into administration and more stranded passengers. Zoom airlines are a low cost airline that operated from the likes of London Gatwick and Manchester to a number of cities in Canada including Toronto and Vancouver.

Zoom airlines another casualty of the economic climate

According to Zoom Airlines, the increase in the price of oil has added around £24 million to their annual operating costs and they could not recover that from passengers who had already booked their flights. You can really understand why these airlines are folding like a pack of cards.

Another casualty, more passengers stranded.

If you have booked your flight as part of a package holiday with a travel company that is a member of ATOL then you might be able to claim. Those of you, who have booked with a credit card where the cost of your ticket is over £100, should be able to claim for a refund.

The Zoom Airlines site mentions debit card payments might be able to be re-claimed but I am not convinced about that. Maybe someone could clarify if debit card payments come under a protection scheme. I am personally not aware of one.

Please read the comments for information on payment by debit card (UK customers only)

Zoom airlines have tried to tie up special deals with other airlines including British Airways and Virgin Atlantic. It’ll mean though for those passengers stranded that they will have to find the money to pay for their flight home.

For more information, please visit the Zoom Airlines website.

You have to feel for those passengers that are stranded, and if you are one of those passengers then I would like to hear about your experiences. I am also interested to hear about your thoughts on the future of low cost airlines.

I am surprised with this news because Zoom Airlines have recently introduced new routes, and they have been around for seven years. It is such a shame that travel is becoming even more expensive now that these low cost carriers are going into administration.


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42 responses to “Zoom airlines another casualty of the economic climate”

Rebecca Leach | 29 August, 2008 at 12:33 pm

Hi, we have only this weekend booked two flights from London to Vancouver for Christmas. Why were we not informed that they were in danger of going into administration when booking.

How do we get our money back?

Darren Cronian | 29 August, 2008 at 12:35 pm

@ Rebecca,

Sorry to hear about this. I understand that they tried until the last minute to receive financial funding to continue but that unfortunately did not happen. Did you book the flight through a travel agency or online?

How did you pay for the flight? Read this post as it’ll provide some answers, but if you can reply to the questions above I can try and give you some more specific advice.

Rebecca Leach | 29 August, 2008 at 12:41 pm

Hi Darren

My boyfriend booked it online this weekend with his credit card. I have just read what you wrote about credit card protection so he is on to the company now. I was tld tthat we might have to get proof that the company has gone into administration.

I have no idea how to do that HELP Please.

Darren Cronian | 29 August, 2008 at 12:46 pm

@ Rebecca

Try not to panic, that’s my first peice of advice.

I have never used a credit card as I hate the things but the company can see from the Zoom airlines website that they have shut for business. At the moment I am not 100% sure if they have gone into administration or liquidation, an even what this means for consumers.

If they have gone into administration I would expect we’ll find out who the administrators are. You will be protected by your credit card, but it might just take time.

If you read this post from consumers who tried to claim refunds through credit cards for the Oasis Hong Kong administration, it might help you out a little or at least understand the time scales.

If I find anymore information I’ll let you know.

Rebecca Leach | 29 August, 2008 at 12:52 pm

Thank you Darren for all of your help

The credit card company are sending us out a claim form and they will deal with it. We’ve been informed that we should not have a problem getting the money back. The problem is how long it will take as they have not yet appointed administrators in the UK.

Ian Robinson | 29 August, 2008 at 12:54 pm

Hi we are in the same situation but thankfully we paid by credit card.

I will let you know how we get on.

AN | 29 August, 2008 at 1:00 pm

This is a dreadful situtation to be in. I would like to thank Darren for allowing me to post a comment here. I used to work for Zoom airlines as a customer rep and I am happy to help answer any questions that you may have.

Whilst at this time I cannot give you any specifics about the administration I might be able to help you if I have the information to hand. I have many friends through working for this great airline and we are devasted that this has happened.

Rebecca and Ian, I hope you get your refunds and find alternative flights.

Nick | 29 August, 2008 at 1:07 pm

Advice for UK customers only.

Debit Cards protection is down to the issuing bank. So the answer is some do some do not, but in the UK it is always worth pushing for a refund, do not give up at first NO.

Also if you have booked with a travel agent in the UK, speak to them to find out if your flights protected. As I said before we protect all passengers who book with us, and this can lead to credit refusing the claim. The old rule of you can not claim on 2 insurances for same thing and credit card is often insurer of last resort.

Darren Cronian | 29 August, 2008 at 1:11 pm

@ Nick

Thank you for that. I have been digging around for the information on debit cards. The co-founder of Zoom apparently said on Radio 5 last night that passengers in the UK would receive refund through debit card.

I wasn’t convinced myself.

Darren Cronian | 29 August, 2008 at 1:14 pm

@ AN

Thanks for posting your comment. I think alot of the people arriving on the blog are wanting to know if payment is protected by debit card. The co-founder of Zoom says it is. What’s your take on this?

AN | 29 August, 2008 at 1:21 pm

Hi Darren

I would take Nick’s advice and contact your bank and persist.

I do not honestly know anymore than you do regarding debit card transactions.

Karen Bryan | 29 August, 2008 at 1:21 pm

My brother and his family who now live in Canada were due to fly to Scotland ( to show us all their new baby) this week with Zoom, I haven’t spoken with him but my Dad’s told me that they have re booked with another airline next week. I’ll get the full story from him when we meet up.

Darren, I was also surprised to read that debit card holders will get a refund although I hope that it’s true.

I’d advise anyone booking flights independently and paying more than £100 for the transaction to pay by credit card in the current economic climate. Yes you will have to pay higher card fees but it will give you more protection.

Lee Harrison | 29 August, 2008 at 1:25 pm

Sorry to see Zoom go, but another classic case of why you should not neglect booking with your local Travel Agent. An interview on Radio 5 Live this morning, also had a Passenger stranded in Canada who hadn’t bothered to take out Travel Insurance. I’m sorry but I can’t feel sorry for those stranded who take such risks.

Nick | 29 August, 2008 at 1:31 pm

Darren

Another thing that might help for customers travelling in next 24 hours can use http://www.missedaflight.com; this is operated by skybreak an airport handling company based at major UK airports. They where the handling agent for zoom and are ATOL protected. It is designed to help people stranded or delayed getting to airports.

Darren Cronian | 29 August, 2008 at 1:35 pm

@ AN

Thanks :)

@ Karen

I’m glad that they managed to find an alternative flight. I’d be interested to hear about their experience with regard to refunds and alternative flights.

@ Lee

I didnt think that many travel insurance companies compensated against administration - only a small number of companies offer this I think from a previous post on this topic. Lee, I do not disagree with you but until recently I would never have booked a flight with the likes of Zoom or Ryanair with a travel agency, and I suspect most consumers are the same.

Now I have heard of the advantages of booking through an agency (read the Ryanair and third party website post from earlier this week) I will probably book future flights with a travel agency because in this economic climate it makes sense to.

It’s another point about educating consumers. Something I do not think that the travel industry does enough of.

Darren Cronian | 29 August, 2008 at 1:37 pm

@ Nick

You are a mind of useful information - thanks!

Lisa Corcoran | 30 August, 2008 at 2:50 pm

I had Zoom flights booked for February and it was all sorted ages ago so I couldn’t believe it when I heard the news! It has never happened to me before and suddenly I had accommodation booked but no flights. It just becomes a nightmare because you’re thinking about getting the money back but at the same time feel great disappointment in case you have to cancel.

Anyway, it looks like we should get the money back from the credit card company but it might not be until February and we have now sorted out flights with Air Canada. Mind you, instead of going direct from Manchester (touching down in Glasgow), we have to go from London and fly indirect! Suppose I should be thankful that we now have flights which unbelievably were around the same price.

It definitely makes you think though about booking flights in the future…

Murray Harrold | 30 August, 2008 at 8:24 pm

There is talk here of “booking with a travel agent” - there are two issues, one is that booking with or through a travel agent will not help UNLESS one is booking an ATOL protected ticket - and secondly, certainly with RyanAir, you may want to book via an agent but you will be lucky to find any travel agent that will touch RyanAir with a bargepole. A travel agent will, however, tell you where you stand. Remember that the most financially insecure way of booking an airline ticket is..well, directly with an airline. You may be no better off through an agent if booking IATA scheduled fares but at least an agent will tell you where you stand! As regards insurance I have the travel Insurance which comes from the Post Office - Why? Simple - This has “scheduled ailrine failure” fitted as standard.

Darren Cronian | 30 August, 2008 at 8:35 pm

@ Lisa

I am glad you will get your money back - it must be a nightmare when you have spent so much time planning a trip. Interesting you mention the same price as Zoom airlines with a national carrier.

I really do think that if consumers compare like-for-like they will find that these “low cost” carriers aren’t as low cost as you may think. In some way low cost carriers have brainwashed consumers into thinking that booking with them is going to be cheaper without even comparing with non low cost airlines.

If that makes sense.

@ Murray

Thanks for the comment. I think we said that the travel agency had to be ATOL member. I tried to book a Ryanair flight around 6 years ago for a flight to Dublin with a hotel through a travel agency and they would not book me it - they told me to go online.

As for travel insurance with airline failure, I never knew the post office did this. That’s good to know and will bear that in mind. Do they do annual insurance with this as standard or just one-trip insurance?

Keep the comments coming - I am writing an update post and will include alot of the information included in this post.

Murray Harrold | 30 August, 2008 at 8:47 pm

I have the annual family insurance from the Post Office - with Airline Failure. There are not that many (policies) about that do this. I checked out, for example, AMEX - which does not supply this. People should make sure this feature is included (ever bearing in mind it looks like, inter alia, Alitalia are on the slippery slope) - and do not rely on credit card protection. Reason: - credit card companies will take about 10 nanoseconds to work out that being the de facto bonding company for slightly iffy airline startups is not really of too much interest to them - watch out for the letter in the post arriving at a breakfast table near you!

Murray Harrold | 30 August, 2008 at 8:48 pm

Sorry, meant to add - interesting that you booked a hotel AND a flight with RyanAir - ie a “package” within the meaning of the EEC rgulations - and the ATOL number/ bonding arrangement of RyanAir is??????

Darren Cronian | 30 August, 2008 at 8:59 pm

@ Murray

Interesting point about credit card protection. I can see that happening and then where will this lead consumers. It’ll mean that more consumers will use ATOL travel agencies, but then are the likes of Ryanair going to get miffed and then say that consumers can only book on their own website.

As for hotel and flight — I booked the flight with Ryanair (had no choice as they are the only airline that fly from Leeds to Dublin and booked the hotel independently. I was going to book it via an agent but they wouldn’t take a Ryanair booking.

Murray Harrold | 30 August, 2008 at 9:29 pm

… you may not have seen the travel trade press in that RyanAir are actively moving against anyone booking their flights anyway BUT via their website - and have cancelled booking made via “screenscraping” websites. So, a consumer can ONLY book via their website. Although they are (very) cheap RyanAir are begining to lose the plot a bit. Also not all travel agents carry an ATOL - there is no need for them to do so, unless they are tour operating that is, self packaging. Otherwise ABTA and if they choose to, an IATA licence is enough. Now, there are even several variations of ATOL’s depending on what you do. Indeed, rthe rules are so complex that not even all travel agents understand them, so heavnes help the general public.

Dean | 30 August, 2008 at 10:17 pm

Hi Darren
I have read and listened to the comments about Zoom, here and in the national press. It’s disturbing to see some of the mis-information that has been happening, I watched a Sky news report that stated that Zoom customers should contact Abta for a refund. Why would the association of travel agents refund customers who booked direct with an airline?
Abta regulates it’s members and provides some protection for customers, but the main protection it provides is if a travel agent or tour operator member does bust. Zoom was not a member as I understand
Maybe as a Atol holder and Abta travel agent I can help clarify a couple of points.
Atol - covers package holidays - IE when a flight is “packaged” with another travel product, like hotel, car hire or tickets etc to form a package holiday. Legally anyone selling travel in the UK must be an Atol holder. However most airlines are not Atol holders, so airlines like Ryanair, contract out to third parties for hotels etc to remove any obligations on them should anything go wrong. It also removes from them the financial obligation that the Atol holders have to provide, in the form of a large bond.
There is also a small fee on every booking, again not something that Ryanair has to worry about
Scheduled or low cost flights which are sold as flight only are not covered under Atol regulations
But Atol holders are legally bound to help customers if they book a scheduled or low cost flight only for them. So most agents like myself include a AFI or airline failure insurance. On scheduled flights this is normally included in the price, but for low costs it is added on the top.
Again though this may not be full coverage, as AFI does not cover airlines which go into Chapter 11 administration.
Travel insurance will not cover airline failures, and although customers do have protection when using a credit card, this may not be the case of the transaction is handled overseas, IE buying direct with a US based airline like Jetblue.
So what’s the long and the short of it? Buyer beware!
If you book direct and DIY your holiday, you may lose all your money if it goes wrong.
Try to use Atol holders, if in doubt ask about your coverage. Most Atol holders are only too happy to promote that fact to customers that their holiday is fully protected. I can package the DIY holiday for customers, usually at a better price and protect them well.

Darren Cronian | 30 August, 2008 at 10:34 pm

@ Dean / Murray

I will be publishing a new post about airline protection and would welcome your input - especually to answer the question I have about protection in the ATOL section of the post. It’s information overload I am sure.

Alan | 30 August, 2008 at 11:32 pm

We booked two flights with Zoom airlines by Nationwide Visa debit card and unfortunately they have said that we will have to apply for a refund through the administrators. Does anyone know who the administrators are yet?

Darren Cronian | 30 August, 2008 at 11:35 pm

@ Alan

Sorry to hear that. I understand Zoom Airlines owe creditors over $100million so I do not hold out much hope for anyone wishing to get refunds through the administrators, but as soon as I find out who the administrators are I will update this post.

Kim Kinrade | 31 August, 2008 at 1:44 am

Hi Darren,

As a nova Scotian I feel bad for the people who were stranded at the Halifax airport. We did not know that the passengers were stranded at the airport until the next day because the media said that other arrangements were being made. Otherwise we could have arranged billets for these people. Halifax airport dropped the ball on this one.

However, with all the failed airlines in the past few years (a lot from Canada) why isn’t there a fund for these unfortunate strandings?

Darren Cronian | 31 August, 2008 at 3:57 am

@ Kim

There is a fund as such in the UK - the air travel trust I think it’s called but it is only paid out to consumers who have booked with an ATOL member travel agency. The travel agency would also attempt to find alternative flights.

If you book direct with the likes of Zoom then your pretty much left to get yourself out of the mess, which is cannot be a nice experience.

Murray Harrold | 31 August, 2008 at 10:52 am

There is an alternative to the ABTA bonding scheme that is the Travel Trust but we are looking here at holidays rather than anything else. The Trust scheme is a bit of red herring because if the participants don’t put the money in it in the first place, there is nothing to come out. Now, let’s be clear. The reason you can claim on a credit card is for non-performance of the goods or service bought on it - or if you are halfway through a journey - there is (possibly) NO non-performace claim (after all, they got you there) and there is a matter about if you paid any deposit, say, in cash and the balance on a card - a problem exists! If you paid any other way. Tough. That’s it, gone. Deal with it. All IATA scheduled airlines are totally unbonded. If British Airways goes bust tomorrow a lot of people will lose a lot of money - as they did with the demise of Swiss Air, SABENA, etc. You, the ticket holder, are an unsecured creditor at the bottom of the pile. This is why the travel trade wants to see a levy on all tickets - or to see the bonding of airlines, especially startups.

Bob Allen | 3 September, 2008 at 2:33 pm

My son is going to work in Canada in November and booked via his Debit Card with ZOOM. The bank (The Nationwide) basically said ‘Tough!’; his travel insurance with Insure and Go didn’t cover him. I have now applied for a Credit card (something I have always steered clear of) so that we can re-book his flight with another carrier. British Airways have offered £50 off a flight on production of his receipt from ZOOM, (so that’s something!) and Air Canada will do the same but only on flights in September.
Bad news all round!

Darren Cronian | 3 September, 2008 at 11:06 pm

@ Bob

Sorry to hear your bad news. I’ve had a few people like yourself who have booked with debit cards and the bank are not prepared to refund any money. Most insurance is not covered for airline failure insurance so to summarise

(1) book the flight with a ATOL travel agent
(2) take out insurance (i.e. post office) that includes airline failure insurance
(3) ask your travel agency when booking if they offer airline failure protection
(4) pay by credit card

I have not heard anything about who is dealing with the administration of Zoom Airlines in the UK. Has anyone else heard anything?

Trudy Mylrea | 5 September, 2008 at 1:48 am

I think it is very unfortunate that many people like myself who had the money to pay for flights updront on their debit card had to learn the hard way that you should book all flights on VISA so you are covered if this happened. If I had known this I would never have booked by debit card. But I didnt realise.

Trudy

Joan | 5 September, 2008 at 6:39 pm

We were caught mid-trip when Zoom went under. Virgin Atlantic and British Airways were the two carriers Zoom mentioned having a deal with to re-book. Virgin gave us very reasonable one-way rates to get back from New York (with proof of the Zoom tickets), while British Airways were going to charge a ridiculous amount. So shop around for who gives the best alternative–we booked ours the day after the announcement was made to fly on the 31st of August.

Joan

Darren Cronian | 5 September, 2008 at 9:09 pm

@ Trudy

Sorry to hear about your experience. To be fair I do not think you are the only person who thought you would be protected by debit card. It’s a shame that the banks won’t do anything, but then where are they going to get the money back from.

I hate credit cards as they have got so many people in debt, but I am thinking about getting one for booking holidays with. Best advice though is to ask your travel agency to see if they can help protect you when booking the holiday.

I’m not sure why but the consumer has to ask for protection.

@ Joan

Thanks for the update and I am glad you managed to get a return flight. Interesting you mention the price difference of the flights. Have you managed to get the money back for your Zoom tickets?

al | 8 September, 2008 at 11:01 am

i was stuck in NYC last week and luckily got on a virgin flight to get back… couple of hundred pounds later.

in an effort to recover expenses… i just called my credit card company (hsbc master card) and they said i should take it up with zoom as they would not cover it.

most of the reports/web sites are confident i should claim against the CC company but mine didnt help at all.

could someone clearify please?

Betty Lopez | 9 September, 2008 at 6:54 pm

Hi,

The administrators are:

PFK (UK) Limited, LLP Accountants and Business Advisors
78 Carlton Plance
Glasgow G5 9TH.

My daughter is an unfortunate member of cabin crew staff and they are yet to receive any salary.

Debra Thomas | 9 September, 2008 at 9:59 pm

Myself and my family flew to Fort Lauderdale in Florida on 16th August for a 3 week holiday. We didn’t know anything was wrong until we showed up at 3pm (ECT) on the 8th September to catch our return flight. We couldnt find a check-in desk and there was no ZOOM reprsentative to get advice from. The only information we were given was from a airport porter who told us they’d ” gone bust “. We thought it was a joke ! We asked a security guard who told us that it had happend about 2 weeks ago and that we would need to go to MIAMI Internationl to make alternative arrangements. Talk about panic !! Me, my husband and three children stranded with no help or advise at all. We took a taxi to Miami ($140) and simply went to a ticket booking desk ( no idea which company to try or what we should be doing ). The earlies flight they could offer was the following day at a cost of around $3500. Where were we supposed to find that kind of extra cash at such short notice ??? Nobody seemed to care !! Three children practically in tears and my self in shock, there wasnt a single person we could turn to for help or advice. My husband finally spoke to a gentleman at the British airways check-in desk who gave us an American BA telephone number to contact. The lady who answered was very helpful and managed to get us a better price but still nothing until the following day. We ended up having to pay for a hotel room ($199) and the extra tickets cost $2580.

We took the flights and are now safely home in Wales . I contacted my Credit card company who are willing to arrange a refund of half my original payment but not the full amount as ZOOM did manage to get us to Florida; they just couldn’t get us home. I understand the logic in this but most customers who were unable to travel have had a full refund or an alternative flight at a later date, however my family, who were stranded in Florida thousands of miles from home, have incurred hundreds of pounds of extra cost
and a hellish amount of stress are just told ” tough , you got there didnt you ” ! You tell me if thats fair. ?

Sorry to seem a bit of a moaning minnie but we only got home a few hours ago I’m still really upset and annoyed. Any advise from anyone on a way of getting a bit of compensation would be great.

Darren Cronian | 9 September, 2008 at 10:06 pm

@ Betty

Thank you for the information on the administrators. As for your daughter; I hope she receives her salary, and manages to find alternative employment quickly. We forget how not only consumers are affected by airline failures but staff and their families are just as badly affected.

@ Debra

Wow, that sounds like a nightmare. I am glad you are home, and it must have been a complete shock after arriving at the airport. I will be honest, I think it’s highly likely that you will be able to get any compensation - did you take out travel insurance, and if so, have you tried contacting them?

Other than the credit card company they are your probably only option.

Please read this post about protecting your money from airline failures. Let us know how you get on so that we can all learn from our experiences.

Jim Tinley | 19 September, 2008 at 5:28 pm

Yeah still jere in the USA. Due to fly home to London on the 5th Nov.

Just found out that my debit card company wont pay up (Lloyds TSB). Eeeek

Visa running out & no flight home…..Darn the airlines…..
Stuck Stuck Stuck no money to get back spent it travelling the last 3 months….

Laters whilke I go scream…
Jim T

malkie | 22 September, 2008 at 11:18 pm

I have just returned from Canada after Zoom ‘dropped us in it ‘ 24 hours before departure. What I want to know from fellow ‘Zoomers’ was whether the Zoom website ‘forced’ them into using their debit card. I always book everything online with my credit card for the protection it gives. But, the only time this has happened, the Zoom site wouldn’t accept my c/card and I had to use the debit card. A week before the Zoom collapse a friend had exactly the same experience using another budget carrier’s website with his credit card.
For all you sceptics, the credit cards are both perfectly valid and the balances cleared every month so there was no reason for their refusal.

Could it be that at least some of the credit card companies already knew that Zoom was in difficulty? Apparently Zoom and Alitalia have been excluded for months from most travel policies that actually cover bankruptcy of an airline! So, why not the credit card coys???

malkie

Darren Cronian | 23 September, 2008 at 6:17 am

@ Malkie

That’s a very good question.

I would be sceptical too and I would be interested to hear from anyone else who has had a similar experience where your credit card was refused on the Zoom Airlines website. That would be very interesting.

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