Zoom Airlines grounds planes and files for bankruptcy

CALGARY, Alberta (Reuters) - Zoom Airlines, a Canadian discount transatlantic carrier stung by sky-high fuel costs, cancelled all flights and began bankruptcy proceedings on Thursday, stranding passengers at several airports.

Ottawa-based Zoom said it had tried until midday Thursday to secure a financial lifeline that would keep it aloft after rising jet fuel prices added $50 million (27 million pounds) in annual costs.

But creditors refused to give Zoom any more time, forcing it to file for creditor protection in Canada and Britain.

"We deeply regret the fact that we have been forced to cease all Zoom operations," Hugh and John Boyle, co-founders of the privately held company, said in a statement.

"It is a tragic day for our passengers and more than 600 staff," the statement said.

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

The carrier, which has operated since 2002, has 450 employees in Canada and 260 in the United Kingdom.

It flew to six U.K. destinations as well as to Paris and Rome. It also operated service to eight Canadian cities as well as New York, San Diego, Fort Lauderdale and Bermuda.

In Britain, Times Online reported the carrier's planes were grounded by the Civil Aviation Authority for failing to pay air traffic control fees, stranding hundreds of passengers.