Tuesday, September 02, 2008

Easy Zoom, Easy Go

The CBC website has a mainly sympathetic story about Anglo-Canadian entrepreneurs Hugh and John Boyle, whose six-year-old Zoom Airlines Ltd. crashed and burned last week.

The article describes Hugh Boyle as “the classic entrepreneur: a man with ideas, and energy, and a great deal of self-confidence. And he's followed a classic path: start with next to nothing, win big, retire, get bored, start again. And fail.”

The Scottish-born Boyles made their fortune in Britain in the direct-sell travel business. Hugh retired and moved to Ottawa in 1998, where he became frustrated with the lack of direct airline flights to sun destinations. In 2000 he started his own direct-sell tour operator, and then launched Zoom to provide airplanes for his tour company.

Before the closure, 2007, Zoom and its British sister company Zoom Airlines Ltd. had more than 600 staff and revenue of some $250 million. The business was apparently quite profitable until rising oil prices hiked costs expenses by an additional $50 million a year.

Asked in late 2007 if anyone had told him he was crazy for starting Zoom, Hugh told the Ottawa Business Journal, "I probably am. My wife tells me I am most days."

Also interesting, as always, are the reader comments. One CBC.ca reader praises Zoom for filling a market gap with its transatlantic flights, while another lambastes the company for selling tickets right up until the closure, and for deserting and/or stranding passengers without notice.

Sadly, this has emerged as a common risk that Canadians take when they fly with discount airlines. You never know if you’re home free until you’re safely back home.

Other than that, I don’t fuss over these airline bankruptcies. Most passengers get their money back, and in the meantime thousands of Canadians have saved big money on their vacations.

It’s very different from other businesses. If a factory closes down, the jobs and the value it created are usually gone forever: the equipment gets scattered, and the owner’s web of customer/supplier relationships can’t be duplicated. But when an airline closes down, the planes are merely re-leased or resold, and there’s always another entrepreneur willing to try his luck and start again (giving the workers a chance to stay in the industry).

Happy Trails, Zoom; what colours will your planes wear next?

For the full story, click here.

1 comment:

Ian Portsmouth said...

Zoom does indeed live on, Rick. Five days after the airline went bust, a Google ad for Zoom Airlines tickets (as offered by OneTravel.com) appeared at the bottom of your posting.