Thousands stranded as budget airline folds

The Gatwick-based carrier became the latest casualty of the spiralling cost of aviation fuel. It has applied for administration because it no longer has the money to pay airport landing charges.

All its flights were grounded last night, leaving up to 1,000 passengers on both sides of the Atlantic having to find alternative routes.

One plane has been unable to leave Calgary airport since Wednesday, while Glasgow airport was yesterday instructed by the Civil Aviation Authority to detain a Halifax-bound flight over the non-payment of charges. Another plane was held on the runway at Cardiff.

Passengers were initially told of a technical fault that had delayed departures before learning that the airline was unable to fly because of its financial difficulties.

One stranded passenger said: "We had boarded the flight and sat for an hour and a half. We were then told we all had to disembark again. The pilot was left to tell all the passengers that there would no longer be a flight, and the reasons for this."

Travellers will now have to book alternative flights and hope that they will be able to get a refund from their credit card companies.

Passengers whose flights are part of a package holiday should be able to make a claim under the ATOL scheme that protects holidaymakers from tour operators going bust.

Zoom said BA and Virgin Atlantic were offering "special" fares for passengers whose flights had been cancelled.

Zoom's owners, Scottish brothers John and Hugh Boyle, issued an apology to travellers and its more than 600 staff in Canada and the UK after failing to secure a last ditch financial rescue package.

The surge in the oil price, which touched almost $150 a barrel in July, is thought to have added around £25million a year to the airline's costs.

The Boyle brothers: "We are desperately sorry for the inconvenience and disappointment that this will cause passengers and those who have booked flights."

The airline was set up in 2001 and operated flights from Gatwick, Glasgow, Manchester, Cardiff and Belfast, as well as Paris and Rome.

It flew to eight destinations in Canada, as well as New York, San Diego, Fort Lauderdale and Bermuda.

A number of other carriers have gone into administration in recent months, including business class transatlantic firms Eos, Maxjet and Silverjet.