Oasis Hong Kong Airlines stops flying amid increasing fuel costs
by Kay Murchie
Oasis Hong Kong Airlines has announced it will stop flying and has applied for a voluntary liquidator. Chief executive Stephen Miller held a news conference but did not give any details of why it had happened.
The 17-month-old budget airline carrier has become at least the fourth airline globally to cease operations in under 2 weeks amid increasing fuel costs. The announcement left hundreds of passengers stranded including children returning after the Easter school holidays, according to a spokesperson for Cathay Pacific.
The airline has accumulated losses of up to $1 billion Hong Kong dollars ($128 million) and is losing over $1 million per flight. In the last 12 months alone, the cost of fuel has increased 73%.
Martin Marnick, head of equity trading at Helmsman Global Trading in Hong Kong, said if Oasis is in trouble, then others surely will follow. It does go to prove what a high-cost, low-margin business this is.
Oasis operated daily flights Gatwick to Hong Kong for $1,000 Hong Kong dollars (£65) each way. It later added flights from Hong Kong to Vancouver.
Oasis was established in October 2006 by husband-and-wife team Raymond and Priscilla Lee in a bid to challenge Cathay Pacific Airways, which is also based in Hong Kong.
Mr Lee and his wife were among backers who committed $100 million in funds to the airline before it commenced. Unlike many budget short-haul carriers, Oasis offers passengers free meals and in-flight entertainment.
Cathay Pacific is offering specially priced one-way flights for Oasis passengers and is organising additional flights.
KPMG, appointed as liquidator, advised ticket holders to call 00852 3628 0628 or 0844 482 2323 for information.
US carriers including ATA Airlines, Aloha Airgroup and Skybus Airlines have ceased trading since the end of last month.
Previous: « Crude oil, corn hit record highs
Next: UK interest rates cut; Eurozone rates steady »
Visited 2523 times, 1 so far today