Monday, September 1, 2008

Zoom Airlines Gone Bust

Recently, another big name airline has filed for bankruptcy, leaving around 60,000 passengers with flight bookings which will not be honoured by Zoom Airlines (source). Are you protected if this happens to you?
”Zoom Airlines sincerely regrets to advise its customers that it has suspended operations with effect from 19:00 hrs on Thursday 28 August 2008. Both Zoom Airlines Inc and Zoom Airlines Ltd, the Canadian and UK airlines, have started administration proceedings in their home countries.”

Shocked customers were reeling from the news and urgently seeking advice regarding the failing Zoom airline and what steps to take next.

Zoom flight tickets purchased through their website directly, or even “flights only” purchases from tour operators (especially online operators), are not covered by any consumer protection programs such as TICO, ABTA and ATOL.

Only package holidays will be eligible for these schemes, but package holidaymakers comprise only a small percentage of Zoom’s passengers. Seventy-five percent of Zoom’s customers have booked directly with the Airline.

Am I Covered If My Airline Goes Bust?

Avoid befalling the same fate and losing both your money and your flight, when airlines file for bankruptcy in future.

When taking out your travel insurance, be very specific to check the small print on the topic of trip cancellation and interruption cover. Some policy wordings refer to “Scheduled Airline Failure”, this is what has happened to Zoom, so make sure you have it in your travel insurance policy.

For example, the Post Office’s travel insurance policy does cover Scheduled Airline Failure, to the value of £1,500.00 per person named on the insurance policy. Which is more than enough to get you home if your airline goes in to liquidation, before going bankrupt.

Not all insurers have this provision, so be sure to check.

Who Will Be The Next Airline To Go?

The future remains unstable for the aviation industry, as operating costs and the dramatically elevating price of oil and thus aviation fuel, remains a business-breaker. Whilst economic demand globally, heads in the opposite direction. See the Telegraph report here.

Just over half way through 2008 and already many airlines have gone bust, including Aloha Airlines, ATA Airlines, Coast Air, eos Airlines, Oasis Hong Kong, Silverjet, Nationwide Airlines, and Skybus Airlines.

It is in the interests of the bigger airlines to finish off their rivals as Willie Walsh of BA explains in this overtly competitive stance in the Independent.

The industry expectation is for more airlines going bust this year, so ensure you are protected against the financial fallout of these events.

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