Zoom's classic entrepreneur: some wins, a loss
Hugh Boyle (l) and brother John in a publicity shot in front of a Zoom plane in 2007. (Craig Watson/AFP/Getty Images)
Hugh Boyle is 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.
Boyle, a Scot who has lived in Ottawa since 1998, has spent most of his career in air travel. With his brother John, he made a fortune estimated at millions in the British travel business. Now he is facing the loss of some of that money after the failure of Zoom Airlines Inc., a small Ottawa-based discount, full-service carrier that headed for receivership on Aug. 28.
Boyle said the end of Zoom, and its British sister company Zoom Airlines Ltd., was a "tragic day" for passengers and more than 600 staff. That was a big change from early 2007, when he told the Ottawa Business Journal that the Canadian company was "very profitable," and had annual revenue of about $250 million just five years after starting in 2002.
In the same interview, he expressed the hope that oil prices — a key factor for airlines — would come down a bit. They did, but have since risen to new highs. In announcing the end of Zoom, the company said a $50-million increase in fuel costs was a major problem.
Boyle, who is in his mid-50s, grew up in a middle-class family in Bellshill, Lanarkshire, about 10 kilometres from Glasgow. He trained as a chef, and worked in Scotland, London and Spain, a biography provided by one of his companies and posted on the Electronic Scotland website said.
But in a recurring theme, he got bored and joined his more exuberant brother John in his travel business.
They sold that company, Falcon Holidays, for a large profit, and then founded and sold another company, Direct Holidays, for a reported £56 million in the late 1990s.
Hugh then retired and moved to Ottawa in 1998, where several of his wife's brothers and sisters lived. But he became frustrated at the lack of airline flights to sun destinations from the city, and in 2000 started Go Travel Direct.Com Inc., described as Canada's first direct-sell tour operator, using the business model the brothers developed in Britain.
As of 2007, he told the Ottawa Business Journal that the company was providing 15 to 20 flights a week to sunny places.
Travel company, airline separate, exec saysHugh is head and major shareholder of both Zoom and Go Travel, but the agency is "a completely separate company" from the airline, marketing manager Dan Brennan said Friday. Go travel used Zoom planes — its owns five Boeing 757s and 767s, a federal database shows — so with its main carrier out of business, the company is "negotiating deals with other air carriers," he said.
It was problems getting seats on transatlantic flights that led Hugh to start Zoom in 2002. "The airline was started for the tour operation," he told the Ottawa Business Journal.
"I was very lucky … I had the deep pockets" to finance the business, because banks are reluctant to back entrepreneurs, he said. Also, the launch coincided with the airline failures that followed the Sept. 11 attacks, so there were planes and crews available.
Growth of the airline was steady, with other investors later putting in $12 million, the journal reported.
Meanwhile, the tour business was also growing, but it also hit some problems. For more than a year, the Competition Bureau has been investigating allegations that certain parties boycotted Go Travel.
And the company recently lost a case in the Supreme Court of Nova Scotia, where Maritime Travel Inc. had sued it over three alleged misleading price comparisons in ads.
Judge Suzanne M. Hood dismissed two of the claims, but in a May 30 judgment said the third ad was "more than merely one-sided. It does not have a reasonable basis for its representation. It is clearly unfair."
She ordered Go Travel to pay Maritime $216,842 to cover the business lost because of the unfair comparison.
Brother John's role in the Canadian businesses is not clear, but he has been called the co-owner and a founder of Zoom. It would make sense if he ran the British arm, which began flights out of Britain in 2007, including to Bermuda.
John spent an estimated £250,000 recently flying 150 people to the island for his second wedding, the Times newspaper said.
He also invested in the Motherwell Football Club, a team based near the area where the boys grew up. It failed with debts of more than £8m in 2002, the paper said.
That gives the brothers at least one problem investment each. Asked in late 2007 if anyone had told him he was crazy for starting Zoom, Hugh was candid.
"I probably am, my wife tells me I am most days," he told the journal.
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