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Zoom Airlines Ceases Operations - Part Two  
User currently offlineGofly From United Kingdom, joined Dec 2004, 1727 posts, RR: 38
Posted (6 years 2 weeks 4 days 15 hours ago) and read 4659 times:
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Hello chaps,

This thread is a follow on from the thread Zoom 767 Impounded - Airline Ceases Operations. The original thread was now at over 200 replies, so I've locked it - feel free to continue the discussion in this thread.

The original thread can be found here: http://www.airliners.net/aviation-fo...eneral_aviation/read.main/4123189/

Thanks,
-Gofly


Living the high life on my ex-Airliners.net Moderator pension...
20 replies: All unread, jump to last
 
User currently offlineInbound From Trinidad and Tobago, joined Sep 2001, 851 posts, RR: 2
Reply 1, posted (6 years 2 weeks 4 days 13 hours ago) and read 4545 times:

I saw one of the 767s at FLL last night. Couldn't see a reg, felt sorry for the poor thing sitting there alone, in a dark corner.

Sad to see Zoom go. I really liked that livery, and their call sign.

Will miss seeing them here at POS.

More madness for us now at Caribbean Airlines. We really don't have the aircraft or pilots to increase flights to toronto.

RIP Zoom!



Maintain own separation with terrain!
User currently offlineMEA-707 From Netherlands, joined Nov 1999, 4328 posts, RR: 35
Reply 2, posted (6 years 2 weeks 4 days 13 hours ago) and read 4514 times:

Although Zoom was a minor player in the field, I think the significance of its bankruptcy is bigger then you'd think. After Oasis Hong Kong went belly up, and airlines as diverse as Orient Thai, Flyglobespan and Air Berlin are struggling with its long haul low cost operations, you might conclude that the low cost model doesn't work on flights longer then 5 hours, especially if fuel won't go below $100ish.
AirAsiaX will get tons of A-330s soon and it really makes you wonder if they can make it work.
JetStar might be the exception although they are embedded in Qantas bigger structure so not to be seen as true stand alone LCC.
On the other side, we saw the stand alone pure Business/First airlines like Eos and Maxjet topple as well one after the other, with only operations embedded in BA or the Privatair ops for LH/LX/KL continue.
We might conclude old style full service airlines like BA, LH, EK, SQ combining classes are the only way to make either the lower and upper end of the intercontinental market work.



nobody has ever died from hard work, but why take the risk?
User currently offline9252fly From Canada, joined Sep 2005, 1392 posts, RR: 0
Reply 3, posted (6 years 2 weeks 4 days 12 hours ago) and read 4485 times:



Quoting MEA-707 (Reply 2):
Although Zoom was a minor player in the field, I think the significance of its bankruptcy is bigger then you'd think. After Oasis Hong Kong went belly up, and airlines as diverse as Orient Thai, Flyglobespan and Air Berlin are struggling with its long haul low cost operations, you might conclude that the low cost model doesn't work on flights longer then 5 hours, especially if fuel won't go below $100ish.

You may have valid argument. The more I think about it,the more it helps explain the numerous low-cost,long-haul failures


User currently offlineMileHighFlyer From Canada, joined Feb 2008, 55 posts, RR: 0
Reply 4, posted (6 years 2 weeks 4 days 12 hours ago) and read 4449 times:



Quoting 9252fly (Reply 3):
The more I think about it,the more it helps explain the numerous low-cost,long-haul failures

Exactly! The low-fare airlines have very small profit margins as it is, they were not built to absorb such high costs. Many legacy airlines who already charge more than these no-frills airlines have been feeling the heat and have had to furlough staff and make sacrificed. From after the post-Sept. 11th aviation fiasco up until this year the conditions have been unusually good and enabled these low-fare airlines to be profitable. Now that the conditions are no longer optimum, many of these airlines have/are currently/will go bankrupt. It's simple math. The reason why Zoom's downfall was so quick was that they made the mistake of selling too many tickets ahead of time for such a discounted price.


User currently offline9252fly From Canada, joined Sep 2005, 1392 posts, RR: 0
Reply 5, posted (6 years 2 weeks 4 days 11 hours ago) and read 4286 times:



Quoting MileHighFlyer (Reply 4):
From after the post-Sept. 11th aviation fiasco up until this year the conditions have been unusually good and enabled these low-fare airlines to be profitable. Now that the conditions are no longer optimum, many of these airlines have/are currently/will go bankrupt. It's simple math.

I recall a recent excerpt of a speech given by Robert Milton CEO of ACE the parent company of AC. In that speech he pretty much said what I quoted you saying above. At the time I was a bit sceptical and wondered how he came to that conclusion. The next number of months should be interesting to watch as things unfold (unravel).


User currently offlineREALDEAL From , joined Dec 1969, posts, RR:
Reply 6, posted (6 years 2 weeks 4 days 9 hours ago) and read 4152 times:

The insurance companies insure the banks and credit card issuers limiting their overall potential payout liability -- regardless if its an airline or amazon.com disappearing.

In turn the insurance companies cross insure each other spreading risk even further.

So that your premise that an airline shutting down would wipe away banks it totally baseless.

in reply from last post ...

if close to 100% probability that a US major will go under soon, no insurance co will touch them or the insurance co will go under !!!

Quoting MileHighFlyer (Reply 4):
Exactly! The low-fare airlines have very small profit margins as it is,

wrong-the old legacy carriers costs are still way too high in lots of cases.

LCC in general are making money but eg. flying short haul in USA-why would you bother these days. Look at say LAX/LAS it would be quicker to drive.

Long haul low cost can work as long as they have there costs under control. When you're fuel isn't hedged that's when it gets tricky.


User currently offlineBWIA330 From Canada, joined Jan 2001, 919 posts, RR: 0
Reply 7, posted (6 years 2 weeks 4 days 9 hours ago) and read 4129 times:

In the collapse of Zoom, do you guys think Air Transat will pick up more aircraft to cover this capacity? Maybe more A310's or A330's?

Regards

BWIA330


User currently offlineQ120 From Canada, joined Aug 2008, 279 posts, RR: 0
Reply 8, posted (6 years 2 weeks 4 days 9 hours ago) and read 4108 times:

Zoom will be missed, I knew a lot of people from the airline and my buddy worked there.
I also helped them out last year for their dragon boat race that they had in Ottawa, I was on the Zoom team .. don't remember what place we came in, but its a fun memory of mine.

RIP ZOOM
 worried 



However beautiful the strategy, you should occasionally look at the results
User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 9, posted (6 years 2 weeks 4 days ago) and read 3866 times:



Quoting MileHighFlyer (Reply 4):
they made the mistake of selling too many tickets ahead of time for such a discounted price.

They wouldn't have had to do this if they had confidence in their future ticket sales. Things were obviously going wrong for a long time.

I read on ABTN that Zoom were still trying to get financing to re-start flying. Not sure I'd trust them after what's happened.


User currently offlineScouseflyer From United Kingdom, joined Apr 2006, 3390 posts, RR: 9
Reply 10, posted (6 years 2 weeks 4 days ago) and read 3846 times:



Quoting Babybus (Reply 9):
They wouldn't have had to do this if they had confidence in their future ticket sales. Things were obviously going wrong for a long time.

I don't know, I think that they simply got caught out by the oil price going from $35 a barrell to $147 in the space of 18 months and hadn't got any contingency in the bank to cope with it.


User currently offlineAccargo From Canada, joined Sep 2004, 610 posts, RR: 8
Reply 11, posted (6 years 2 weeks 3 days 20 hours ago) and read 3713 times:



Quoting Babybus (Reply 9):
They wouldn't have had to do this if they had confidence in their future ticket sales. Things were obviously going wrong for a long time.

They owed over 130 million dollars to various companies and agencies. They were selling future seats at rock bottom prices to cover last months bills. Things going wrong for a long time is an understatement. Even if fuel had not jumped so much it would have only prolonged the inevitable.


User currently offlineMultimark From Canada, joined Jul 2006, 796 posts, RR: 0
Reply 12, posted (6 years 2 weeks 3 days 12 hours ago) and read 3395 times:

I'm still shocked by the low loads reported in the coverage of Zoom's demise. Sounds like a couple flights had around 70 pax, during what is usually one of the busiest weeks of the year.

User currently offlineDHR From United Kingdom, joined Jun 2007, 117 posts, RR: 0
Reply 13, posted (6 years 2 weeks 3 days 10 hours ago) and read 3306 times:



Quoting MEA-707 (Reply 2):
Although Zoom was a minor player in the field, I think the significance of its bankruptcy is bigger then you'd think. After Oasis Hong Kong went belly up, and airlines as diverse as Orient Thai, Flyglobespan and Air Berlin are struggling with its long haul low cost operations, you might conclude that the low cost model doesn't work on flights longer then 5 hours, especially if fuel won't go below $100ish.

Sorry I don't agree. All these airlines had the same problems such as wrong aircraft types, no ancillary revenues, and most likely no fuel hedging policies in place. The model can work with A330 series and B777 series twins (eventually the A380 as well) as long as you packed enough seats in the aircraft to cover your principle costs and have a large variety of ancillary revenue potential on which the airlines can rely on in difficult operating conditions such as high fuel costs.


User currently offlineTwizzler From Canada, joined Jun 2006, 9 posts, RR: 0
Reply 14, posted (6 years 2 weeks 2 days 18 hours ago) and read 3029 times:



Quoting Multimark (Reply 12):
I'm still shocked by the low loads reported in the coverage of Zoom's demise. Sounds like a couple flights had around 70 pax, during what is usually one of the busiest weeks of the year.

What the press failed say was that these pax were the through pax YYC - YVR, not the total GLA - YYC. It is not uncommon to see under 100 on the second leg of a double stop.


User currently offlineWjv04 From Canada, joined Jun 2001, 584 posts, RR: 4
Reply 15, posted (6 years 2 weeks 2 days 10 hours ago) and read 2805 times:

C-GZUM is just departing YYC-TUS.

User currently offlineViscount724 From Switzerland, joined Oct 2006, 25332 posts, RR: 22
Reply 16, posted (6 years 2 weeks 2 days 10 hours ago) and read 2775 times:



Quoting Twizzler (Reply 14):
Quoting Multimark (Reply 12):
I'm still shocked by the low loads reported in the coverage of Zoom's demise. Sounds like a couple flights had around 70 pax, during what is usually one of the busiest weeks of the year.

What the press failed say was that these pax were the through pax YYC - YVR, not the total GLA - YYC. It is not uncommon to see under 100 on the second leg of a double stop.

Yes the flights that mentioned those low passenger counts were all flights that served 2 destinations in Canada or the U.K. I'm sure their flights were full or very close to it on the longhaul sectors especially during one of the busiest periods of the year.


User currently offlineTommy212 From United Kingdom, joined Oct 2005, 126 posts, RR: 0
Reply 17, posted (6 years 2 weeks 2 days 10 hours ago) and read 2755 times:



Quoting Viscount724 (Reply 16):

well my flight from LGW to JFK only had no more than 100 people on a 763 in july, i would hardly call that full for a flight such as London-New York, seeing as i only paid £240 return i was surprissed to still see it so empty


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25332 posts, RR: 22
Reply 18, posted (6 years 2 weeks 2 days 9 hours ago) and read 2699 times:



Quoting Tommy212 (Reply 17):
Quoting Viscount724 (Reply 16):


well my flight from LGW to JFK only had no more than 100 people on a 763 in july, i would hardly call that full for a flight such as London-New York, seeing as i only paid £240 return i was surprissed to still see it so empty

I was thinking more of their Canada flights where leisure carriers like Zoom and Air Transat etc. usually operate at high load factors during peak seasons. I expect their relatively new JFK flights may have been a different matter due to the huge volume of competition, and probably less awareness of Zoom's service.

The last week of August and first week of September is normally extremely busy on Europe-Canada flights with people returning from summer trips, especially families since most Canadian schools reopen the first week of September.


User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 19, posted (6 years 2 weeks 2 days 3 hours ago) and read 2553 times:



Quoting Viscount724 (Reply 18):
and probably less awareness of Zoom's service

From the UK end there was no lack of awareness of the airline. There were posters and adverts everywhere. Travellers are a canny race, they'd track down a 250 pound LON-NYC airfare without any advertising!

I'm still trying to ponder over where they went wrong, apart from Air Canada didn't step in at the right time and buy them as the brothers probably expected/planned.


User currently offlineAccargo From Canada, joined Sep 2004, 610 posts, RR: 8
Reply 20, posted (6 years 2 weeks 1 day 21 hours ago) and read 2445 times:



Quoting Babybus (Reply 19):
I'm still trying to ponder over where they went wrong, apart from Air Canada didn't step in at the right time and buy them as the brothers probably expected/planned.

If they expected that to happen they were idiots.


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