Bank of Scotland has taken a 7.5 percent stake in Zoom Airlines in a deal that reportedly values the carrier at £131m. The transatlantic airline, set up by Scottish travel industry entrepreneurs John and Hugh Boyle, is planning a major expansion into the

Published: 06 Aug 2006

Bank of Scotland has taken a 7.5 percent stake in Zoom Airlines in a deal that reportedly values the carrier at £131m. The transatlantic airline, set up by Scottish travel industry entrepreneurs John and Hugh Boyle, is planning a major expansion into the

It is being said that budget airline’s hopes of becoming the transatlantic equivalent of Ryanair or easyJet has moved a step closer as a result of a tie-up with Bank of Scotland. Post deal, Zoom, which already runs low-fare flights between the UK and Canada, is now planning to launch a series of new routes to the US, Caribbean and Mexico.

The carrier was set up by John and Hugh Boyle, who are said to have made £53m from the sale of Direct Holidays in 1998.

Boyle reportedly called the investment by the bank “a red letter day for the airline which bodes well for our future prospects”. He added: “For Bank of Scotland to take an equity stake in our airline is a tremendous vote of confidence in the success of Zoom which, for the past three years, has pioneered the low-fares concept on a transatlantic basis between six European airports and seven Canadian destinations.”

In the past three years, Zoom has carried 750,000 passengers across the Atlantic using five Boeing 767s.

“The Bank of Scotland money will allow Zoom to increase the size of the fleet and buy cheaper fuel, helping it to compete with the major airlines. Zoom, which charges about £99 for the flight between Britain and Canada, reported pre-tax profits of £3.68 million last year. The most expensive air fares are traditionally charged on the transatlantic route - about 60 per cent of BA's profits come from flights between Britain and North America,” reported thisismoney.co.uk.

According to scotsman.com, the BoS deal means Boyle is now unlikely to float Zoom, as had been his plan, but he is still expected to triple its fleet in the next two to three years. Zoom - which clocked up turnover of £48.6m in its latest financial full year - operates scheduled flights from Cardiff, Gatwick, Glasgow, Manchester and Belfast. It services eight Canadian cities with connections to resorts such as the Caribbean and Las Vegas.