By Darren Shannon in Washington DC
Ontario-based low-cost carrier Zoom Airlines is planning to establish a UK subsidiary to operate services from London to non-Canadian destinations.
The launch of the low-cost long-haul unit comes as Zoom finalises a deal with the Royal Bank of Scotland to invest C$12 million ($10.7 million) in the three-year-old airline for a 7.5% stake. Zoom chairman Hugh Boyle will head the new company, Zoom UK. His dual Canadian and UK citizenship averts any foreign ownership restrictions.
Boyle says the UK expansion was not part of his initial business plan, but was proposed by the bank when it approached him with its investment plan. The Royal Bank of Scotland will hold a 7.5% stake in the new UK subsidiary. Its total investment includes equity, loans, guarantees and assistance in fuel hedging.
Zoom UK, which Boyle hopes to incorporate within the next two months, will probably be based at London Gatwick, already a gateway for the Ottawa-based parent company. Markets are still being determined, although Boyle says India and the USA are probable. A May 2007 launch date is planned for the inaugural Zoom UK flight.
The new carrier will initially operate two leased Boeing 767s, the same type flown by Zoom. "I'd like to keep the fleets the same, so we are looking for -300ERs," says Boyle. Zoom currently operates four 767-300ERs, all of which are powered by General Electric CF6-80C2B6F engines.
Source: Flight International
