Zoom in trouble?

[Guest rattler]

From the CTA

Canadian Transportation Agency offers advice for Zoom Airlines ticket-holders

Updated: August 28, 2008 at 2 p.m. EST

The Canadian Transportation Agency offers the following advice to passengers who hold tickets for travel on Zoom Airlines.

If you are in transit, you should make travel arrangements with another carrier or means of transport.

If you hold tickets for future travel with Zoom Airlines that were purchased through a registered travel agent, you should contact that agent to make other travel arrangements.

If the travel agent is registered in Ontario, Quebec or British Columbia, you may contact the following provincial authorities for advice on claims for reimbursement:

Ontario:

Travel Industry Council of Ontario (TICO)

Tel.: 1 888-451-8426

www.tico.on.ca

Quebec:

Office de la protection du consommateur

Tel.: 1-888-672-2556

www.opc.gouv.qc.ca

British Columbia:

Business Practices and Consumer Protection Authority

Tel.: 1-888-564-9963

www.bpcpa.ca

Residents of other provinces or territories or persons outside Canada should contact their travel agents or their provincial / territorial authority dealing with consumer matters.

If you purchased your travel using a credit card, you can contact the card-issuing company. Some, but not all, credit card companies may be prepared to reverse the charges.

Keep all tickets and receipts for expenses incurred in making alternate travel arrangements, including accommodation and meals.

If you purchased your travel in a cash transaction with Zoom Airlines, keep all tickets and receipts issued by the carrier. There may be future announcements about pursuing claims for reimbursement.

Log on to the Agency's Web site (www.cta.gc.ca) for updates about Zoom Airlines.

[tsgas]

People are going to have to pay to travel . The Greyhound fares are hopefully a thing of the past.

[FA@AC]

I have zero sympathy for the bottom feeders who are going to claim they are being "gouged" to get back home.

Boo hoo.

Had they forked out a few bucks more to fly an airline that was viable versus bottom feeding on a shoestring operation, they wouldn't be in the pickle in the first place. They have only themselves to blame.

Not everyone flew Zoom to save money. Some booked them because Zoom had nonstop or direct flights where the competition didn't. I'd be happy to pay extra to fly YYZ-GLA or YYC-Paris direct rather than by connection in LHR.

And some people probably will be gouged. BA wants GBP2000 for a one-way in the premium economy cabin from LHR to YYZ on Sat.

[IMC]

First off, best of luck to all Zoom employees, I hope that things turn out for all involved.

I do want to clarify a few things with respect to Sunwing as this thread seems to be turning into a projection of demise for them next.

I have been a long-time lurker on this forum and I do realize that The Bean and Dagger have involvement in the industry from a totally different perspective and level than I, but on this topic I wanted to point out a few things.

In previous posts Sunwing has been lumped in with Skybus, Jetsgo, and others as just another $1 fare airline cramming people in seats on trans-con redeyes. This is not really what Sunwing is about. It is a vacation airline provided customers from a parent travel company not unlike Transat. 90% of Sunwing flights are to vacation destinations as part of a package just the same as Skyservice and Transat with very similiar cramped seat pitch.

Yes, there is a summer domestic program across Canada, but this a very small portion of the overall business. It has been mentioned that they have "10 aircraft scattered about the continent", but this is not true. There are only 4 airplanes in Canada for the summer, doing a combination of Canada and Caribbean flying.

Never mentioned is the fact that each summer Sunwing deploys its airplanes and resources to the UK to offset the slowdown in the summer for its core Caribbean business. Right now basically half of the airline is overseas doing work for European operators much the same as Skyservice.

This is not at all the same as a Jetsgo or other "LLC".

I do respect the fact that you guys are in the know on many different things, and perhaps the airline is for sale - however, I do think that you need to better understand the entire operation rather than lumping Sunwing in with other airlines it is clearly different than.

Also, it was Zoom that was contracted by Sunwing for much of its Western Canada flying - Sunwing only operates 737-800s.

[dagger]

Not everyone flew Zoom to save money. Some booked them because Zoom had nonstop or direct flights where the competition didn't. I'd be happy to pay extra to fly YYZ-GLA or YYC-Paris direct rather than by connection in LHR.

And some people probably will be gouged. BA wants GBP2000 for a one-way in the premium economy cabin from LHR to YYZ on Sat.

In fairness to BA, it's a holiday weekend and flights are booked to the hilt. AC doesn't have a cheap economy seat or discounted J seat between Toronto and London for days. Inbound is even worse. AC doesn't even have a seat in Y for the next few days between LHR and YYZ. From what I can see, Zoom passengers in the UK may have to fly back via CDG or a US airport unless they wait until well into next week. If somebody is in London, they can try AT, but the cheapest one-way routing I could find is to take the euroline bus to Paris for 41 pounds and then AC has a special $622 (all-in) one-way fare to YYZ via YUL on the 777.

It's sad that this had to happen on one of the business travel weekends of the year (as did Jetsgo's final boarding).

[ceesix]

Why put a smiley on your posting? Matter of fact, why post that at all. Everyone knows that alot of good people are now unemployed and will be hoping for another opportunity at a time when things are just starting to get plenty tight. This is hard enough for Zoom employees already, and you look like you're gloating.

OK..let's clear the air here...what I did was not gloat. I have spent 30 years of my life in this industry and I have the scar tissue to prove it. I have friends at Zoom and have walked this path many times long before them. For over a year now I have monitored this site and watched how you and a few other pompous gas bags have ripped apart us and others who have "attempted" to redefine air travel in this country and offer an alternative. You guys really have it figured out, don't you?? Well come on..we have 4 or 5 MBAs on staff who would truly love to hear your thesis on it all. Non-conformity is simply not accepted and failure is feasted upon. You spout this boo-hoo rhetoric on a public forum but what are you really saying in private? My post merely hightlghted the fact that the ground wasn't cold and the wholesaler pimps were already seeking another wh**e to take up the bed. Bud..maybe you should turn that high powered perspective around and take a good hard look at you and yours cause you are definately not immune To those respectable and learned posters..I apologise for any misinterpretation of my original post. There was no disrespect meant..only a fool and antagonist would have perceived that.

[Thebean]

Ok. So its 4 airplanes trying to service Gander / St Johns to Vancouver, over 3,000 miles. I'd say that's stretching things a bit thin. Pretty tuff to deal with an AOG, I'd say.

I seem to recall that when WJ had 4 airplanes, they were spread across 850 miles with no airplane more than 450 miles from home. Pretty easy to recover from an IROP, even if it meant bring in a Convair 580 for an afternoon.

Any hot standbys at Sunwing? Nah....I didn't think so......

Low cost with all those hot meals, hot snacks, free booze and big commissions paid to travel agencies, cramming 189 seats into a -800, a paltry baggage allowance of 2 bags totaling 44lbs...(meaning it'll cost $270 more to have the same baggage on Sunwing that WJ provides for free)......there's a strategy that will keep 'em coming back for more........

Selling out future inventory to pay todays bills? We've seen that movie before and we know how it ends 99% of the time.

Toronto to Florida for $29? Toronto - Victoria for $50? Montreal to Vancouver for $50? Remind you of anyone? Sure reminds me of the smiley face at the bottom of the page. Come to think of it, it reminds me of Zoom's ads for $99 to London as well.

Would I entrust my vacation plans to an outfit like that? Not in a million years.

If I were a travel agent, would I book with an outfit like that knowing that there was a 99% chance they'll fail and I'd have to explain to my clients why I put them on Sunwing to begin with, (because they paid big fat commissions)? Nope.

Would I want to have to figure out how to reaccomodate all my clients at 3 in the morning when there are no seats on any carrier? Nope. How about a planeload of stranded passengers stuck on some island with only full fare tickets left on the competition. That's a fun conversation to have with pi$$ed off clients.

Who needs the brain damage. Let the bottom feeders run off to ITravel2000 and fend for themselves. I'll book with an integrated travel company who will be there after the wanabees inevitably blow themselves up. There are precisely three of those left in Canada. Transat, ACV and WJV.

When Sunwing bankrupts itself, and they will, they'll say it was because of the huge increase in fuel prices. Nope. It was because no one was interested in paying compensatory fares for their product.

[IMC]

Thanks for the response.

However, I go back to the fact that the domestic network that you are basing your opinion on is only 10% of the flying that Sunwing does on an annual basis. Perhaps it is even less than that.

Vacation packages are what they are all about, and I don't think that the summer program will affect the core business.

Time will tell.

[Mitch Cronin]

For over a year now I have monitored this site and watched how you and a few other pompous gas bags have ripped apart us and others who have "attempted" to redefine air travel in this country and offer an alternative.

Wrong! J.O. is not one of those gasbags you refer to. Your response is half directed to him and half to some unnamed pompous gasbags (or someone named "Bud")... please know who it is you're responding to so as to avoid the misdirected wind.

Thank you.

[Southshore]

"only a fool and antagonist would have perceived that."

Sorry, bud, but I don't think I'm either and, inspite of your time in the biz, you come off pretty pissy. I just don't get what your point was with the 'ring ring' thing.

Best of luck to all the Zoom folks. What a biz.

[JW]

Regrets to all Zoom employees. I wish you all the best.

There is a lot of referral to the Ccard companies in the Zoom situation, in the various news media. Are the ccard companies on the hook for the refunds? How do they fare in this?

Looking forward...What are the criteria for the ccard companies to remove their support for online bookings? Will this change the threshold for ccards to remove support for travel online bookings?

JW

[Lakelad]

WestJet Comments on Zoom Airlines Announcement

CALGARY, Aug. 28 /CNW/ - WestJet commented today on Zoom Airlines announcement to suspend operations effective 2 p.m. ET on August 28, 2008.

"We are saddened to hear today's news about Zoom Airlines, and our hearts go out to the employees impacted by this announcement," commented Bob Cummings, WestJet's Executive Vice-President, Guest Experience and Marketing. "While we do not fly the same routes as Zoom, we are actively working to help any Zoom passengers stranded within our Canadian network to get home."

WestJet is offering stranded passengers discounts on all fares across Canada. Zoom passengers can book WestJet flights by calling WestJet's Sales Super Centre at 1-800-538-5696 (toll-free). Fares are subject to availability and will be offered until Monday, September 1, 2008.

[AIP]

WestJet Comments on Zoom Airlines Announcement

CALGARY, Aug. 28 /CNW/ - WestJet commented today on Zoom Airlines announcement to suspend operations effective 2 p.m. ET on August 28, 2008.

"We are saddened to hear today's news about Zoom Airlines, and our hearts go out to the employees impacted by this announcement," commented Bob Cummings, WestJet's Executive Vice-President, Guest Experience and Marketing. "While we do not fly the same routes as Zoom, we are actively working to help any Zoom passengers stranded within our Canadian network to get home."

WestJet is offering stranded passengers discounts on all fares across Canada. Zoom passengers can book WestJet flights by calling WestJet's Sales Super Centre at 1-800-538-5696 (toll-free). Fares are subject to availability and will be offered until Monday, September 1, 2008.

A rather pathetically self serving press release me thinks.

Why else would WJ "Comment" on another company's troubles.

[Maverick]

A rather pathetically self serving press release me thinks.

Why else would WJ "Comment" on another company's troubles.

Why wouldn't you when your counters are being overrun in YYC and YVR with people needing to get home????

Settle down, take a deep breathe and reeeeeeellllllaaaaaaaxxxxxxx.

[FA@AC]

A rather pathetically self serving press release me thinks.

Why else would WJ "Comment" on another company's troubles.

WJ, I think, was the airline that was able to help those stranded in YYC to get to YVR last night.

[Super 80]

Looking forward...What are the criteria for the ccard companies to remove their support for online bookings? Will this change the threshold for ccards to remove support for travel online bookings?

Credit Card companies protect themselves by witholding a fairly large sum from credit card transactions as collateral to cover charge backs. For most vendors this is based on the frequency of charge backs and the volume of transations.

Airlines naturally get "special treatment"

In the case of airlines 99% of charge backs are due to fraud and because of the cardless nature of most airline credit card transactions the credit card companies offer no protection to the airline as a merchant.

In the case of Frontier their credit card transaction collateral was ~50 million. When they were informed this was being increased to 130 million they couldn't just put another 70 million dollars up as collateral and have 50% of their revenue garnished at the same time - so to bankruptcy court they go.

[Mitch Cronin]

Why else would WJ "Comment" on another company's troubles.

...reasonable to guess they had good cause to want those folks to know they were offering a discount... no?

All that leads me to ask... Can an airline just pop in with an airplane and offer to sell seats without having been scheduled or planned ahead by some degree? Sorry if that's a stupid question, but I haven't a clue what sort of rules apply in that sense. Anyway, I wouldn't be at all surprised to learn WJ has the odd airplane they could pull out once in a while for an unscheduled run or two... if that's allowed? They're gettin' to be a pretty big outfit by now.

Verry sorry to hear all this bad news today. Not one of us wants to see others in that boat. I wish you all the best of luck in finding new (and hopefully stable) employment.

Cheers,

Mitch

[Guest rattler]

We have been advised that British Airways and Virgin Atlantic are graciously offering special fares to assist Zoom customers that have been displaced by the suspension of our services.

I have zero sympathy for the bottom feeders who are going to claim they are being "gouged" to get back home.

Boo hoo.

Had they forked out a few bucks more to fly an airline that was viable versus bottom feeding on a shoestring operation, they wouldn't be in the pickle in the first place. They have only themselves to blame.

Caveat Emptor. There will be more. Someone's wings are a little too close to the sun.......

I wonder when WJ will announce Bermuda? 

Beano: the very same folks who you have little or no sympathy now are the same sort of guests who flocked to Westjet because of their low fares despite the company being a "new boy" on the block and despite their initial teething problems (Transport Canada). To "Naughty Word" on those who were booking Zoom, just does not make sense. Perhaps Zoom is the only airline they could afford. Perhaps they were on their once in a lifetime vacation (you know the lower middle class & folks on a fixed income that you evidently no longer connect with) Ever pause to think about that?

[Gumbi]

...Transat with very similiar cramped seat pitch.

Not any more...

My thoughts are out to our colleagues who once again find themselves looking for a job... *sigh*

[Don Hudson]

ceesix;

I have monitored this site and watched how you and a few other pompous gas bags have ripped apart us and others who have "attempted" to redefine air travel in this country and offer an alternative.

J.O. doesn't need anyone to defend him but what you posted and what you accused J.O. of is grossly inappropriate and insulting to a highly-professional airman who possesses great compassion for fellow airline people and a great insight into this squirrelly business. You owe the man an apology.

As for ZOOM employees, there is no one who is an airline employee "out there" today who is gloating at this failure. Nor does anyone have a monopoly on compassion - we each take this industry for what it is and hope the ride is a good one - many times it isn't for some and it is always and forever a sad day when it comes to such outcomes.

That said, I agree with Bean...there has to be some measure of transparency for the travelling public.

Don

[J.O.]

Thanks Mitch and Don.

Ceesix:

I am genuinely sorry if I touched a nerve, but I doubt that anyone on this forum got what you meant by your posting. I may not be a rocket surgeon but I doubt that I'm the only one who found it inappropriate under today's circumstances. You sure as heck don't have a lock on the tough times that this industry can bring. Try getting a "going out of business" fax under your hotel room door when you're 5000 miles away from home for a test of your mettle. If you've really been there, you would see how your post could be easily misinterpreted. Web forums aren't good at conveying tone, and that's all the more reason why one needs to think twice before hitting the submit button.

As for the rest of your rant, you're right that there's far too much negativity on this forum from a few posters when they talk about business plans like Sunwing's and Zoom's that don't match their idea of how an airline should be run. But if you can find one such negative posting about either company from myself, then please provide a quote. But I can guarantee that such a search will be a waste of your time. I refuse to play that game. My colleagues and I went through the same thing back in the RootsAir days, and while the Beans of the world may have been right, that didn't make it hurt any less. I've watched a good few colleagues leave my company for Sunwing and Zoom, and I have shaken their hand and wished them well every chance I got, and I meant it. If I could have the Zoom guys back tomorrow so they could continue their careers and take care of their families, you can bet your arse that I'd make it happen. I drank a quiet little toast to my Zoom friends tonight. I really hope they can all land on their feet real soon.

Jeff

[shockwave]

Here Here ! well said J.O and a quiet toast to the Zoom people indeed. If I was a betting man I would have to say that Sunwing is becoming a real pain in the butt for The Bean which is obvious if you follow his rants. Profit 100 magazine listed Sunwing again this year. It seems Sunwing posted a quarter of a billion dollars in Revenue last year according to Profit 100 magazine and if I was a pro Westjet Vacation guru like The Bean I guess I would be miffed as well. Now its making sense.

[Thebean]

Beano: the very same folks who you have little or no sympathy now are the same sort of guests who flocked to Westjet because of their low fares despite the company being a "new boy" on the block and despite their initial teething problems (Transport Canada).  To "Naughty Word" on those who were booking Zoom, just does not make sense.  Perhaps Zoom is the only airline they could afford.  Perhaps they were on their once in a lifetime vacation (you know the lower middle class & folks on a fixed income that you evidently no longer connect with)  Ever pause to think about that?

Who cares about what revenue Sunwing has.

It's audited profit, using industry standard metrics that matter.

Capitalising losses over the first year of operations on any given new route of an expanding airline is an easy way to produce paper profit. It's a trick that's been used over and over.

Profitable airlines with 9 airplanes aren't shopped around for $21m. I'm told even NewAir turned them down.

Remember what WJ's market cap was when they went public in 1999 with 10 737-200's? It was about $260m and rose to about $360m within a couple of months. That's what a profitable airline should be worth. Not the $21m price tag Sunwing has placed on itself, in spite of it's supposed profitability.

BTW, C3000 had record revenues before they collapsed. They also had record expenses. Talking about one without the other is like me saying the score of the game last night was Toronto 2. It doesn't tell you anything.

I'm all for low fares if they are sustainable. WJ's plan was completely sustainable, proven by being profitable after 3 full months in business.

Zoom, and others, both past and present, are not sustainable.

They only survive by adding capacity to sell in the future to pay for todays bills. All their cash is in advance ticket sales.

In Sunwings case, they sell 15 aircraft of future inventory with expenses of a fleet of 9. It will always cashflow, but cashflow is not profit. If they are short of cash, they sell November's Florida inventory in August for $29+ all the taxes. Hey presto, instant cash to pay Augusts fuel bill and landing fees.

Eventually, the ponzi scheme catches up to reality. It always does.

Consumers should have figured out by now that if the deal is too good to be true, it probably is. It's a risk / reward calculation. The airline will fail, but who cares if you have finished your trip.

Gamble right and you save money. Gamble wrong and you're going to be stuck in a far off place and are going to have to fork over the market rate to get home.

WJ rarely had to deal with naysayers in the early days because there were plenty of people on Bay Street who saw the profit the company was producing. Any sustained whisper campaign fell on deaf ears. It was easy to disprove.

I don't know middle class folks on a fixed income? Two out of three of my immediate neighbours, to begin with.

I'm waiting to see someone try and blame AC on Zooms failure. Last I checked, AC rarely, if ever, even bothered to match the sched charter fares to Europe....

Zoom did itself in. There will be more, unless oil quickly drops another $20 a bbl.

Will the 600 Zoom employees find work? With WJ adding about 70 employees per aircraft added to the fleet, I dare say that 600 folks will be added to WJ's payroll within about 9 months. They may not be the same folks, though.

[Jdix]

I have no idea who this 'bean' individual is and frankly I don't really care. Zoom had an excellent product with safe, reliable, on-time flights that included meals, movie and wine while earning a profit over the first five years. Many of our customers were of the repeat variety. Not too bad for a LCC.

Management mistakes were made, however, and the airline's demise resulted.

On behalf of 600 or so Zoom employees I sincerely thank those with the kind comments and toasts. They are appreciated.

Jdix

[newgirl]

Bean

With all due respect your middle class neighbours in Oak Bay probably average 150000.00 a year minimum on a fixed income. If they earn less than that then the house has been passed down generation by generation or perhaps they bought in the 40/50's when houses there were MUCH cheaper. I know the property values as Victoria has been my second home since 1973.

I'm not pointing any fingers at anyone but you get what you pay for. If the price of a ticket is too good to be true then it probably is. It's unfortunate that the passengers are not made aware of the repercussions if an airline ceases operations before purchasing their tickets. The air carriers who are members of IATA have an agreement to carry each others passengers in IROP's, union disputes or even an airline failure.

I sympathize with the travellers who are scrambling to get where they need to be. But more so to the employees of Zoom. Good luck just doesn't seem to cut it.