Hundreds of passengers were stranded at airports in the UK yesterday after Zoom, the low-cost transatlantic airline, suspended all operations after failing to pay its bills.

The Anglo-Canadian airline, which employed 600 people, said yesterday that it would declare itself insolvent, blaming high fuel costs for its losses.

The fate of the airline was in jeopardy all day as planes were grounded and creditors attempted to seize assets.

A Zoom flight from Glasgow to Halifax and Ottawa was grounded by BAA, the airports operator, yesterday for non-payment of European and British air traffic control fees, stranding 205 passengers.

A further 156 passengers at Glasgow were also left without a flight when their plane was grounded in Canada for failure to pay aircraft leasing and airport fees.

At Gatwick, two more Zoom flights were delayed and hundreds or passengers were forced to wait at the airport to hear if their flights would depart. After the Zoom website shut down, the airline said it was suspending all operations with immediate effect.

Zoom, which was founded by Scottish millionaires John and Hugh Boyle, said it regretted the inconvenience caused to passengers, many of whom may not be able to claim compensation for their cancelled flights.

John and Hugh Boyle said in a statement: "We deeply regret the fact that we have been forced to cease all Zoom operations. It is a tragic day for our passengers and more than 600 staff. We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights.

"We have done everything we can to support the airline and left no stone unturned to secure a refinancing package that would have kept our aircraft flying. Even as late as today we had secured a new investment package but the actions of creditors meant we could not continue flying.

"The collapse of Zoom is a result of matter beyond our control. Only last year Zoom Airlines made profit, but that turned into a loss in the last year due to the unprecedented increase in the price of aviation fuel and the economic climate.

"The price of oil resulted in our fuel bill jumping by nearly $50 million in one year and we could not recover that from passengers who had already booked their flights."

The airline had said yesterday that it hoped to get its services back to normal. It sought bankruptcy protection to allow it to continue operating without having its assets seized by creditors.

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