Partner of a Pilot
The Candid Diary of an Airline Pilot’s Girlfriend

ANOTHER Low Cost Airline (Oasis, Hong-Kong) goes bust!


 

Wow, fuel prices are a bitch right now. With the price of fuel surging upwards by more than 73% in the past year, Oasis has joined several other airlines in the past month in ceasing operations. I am at a loss for words really, but here goes…

Budget airline Oasiswhich offered flights from Gatwick airport to Hong Kong has gone into liquidation today with debts of £64 million ($128 million USD), calculated at a loss in the region of £64,000 per flight ($128,000 USD)! I always have always wondered how budget airlines coull turn a profit with their ridiculously low prices; and  it appears those questions were well founded in this case. 

In a statement on their website they say:

It is with regret that Oasis Hong Kong Airlines announces that the airline has this morning applied to the Hong Kong Court to appoint a provisional liquidator. The Court has appointed Edward Middleton and Patrick Cowley of KPMG as the provisional liquidators, and they have assumed control of the airline with effect from 1400h HKG time today.

Our flight operations have been cancelled until further notice. The Provisional Liquidators are liaising with other airlines in order to help customers make alternate travel arrangements as quickly as possible.

The Hong Kong based airline was launched in October 2006 (to compete directly against Cathay Pacific) with Gatwick to Hong Kong flights, before starting a service from Hong Kong to Vancouver in Canada last June. This morning’s flight from Hong Kong to Gatwick landed as normal, but all the airline’s flights have now been suspended.

Only a few airlines have attempted a low cost, long-haul model and Oasisseems to be another victim of the surge in fuel prices. It was offering one way flights from Gatwick to Hong Kong for as little as around £65 one way or £150 return (less than 20% of the cost of the average Cathay Pacific ticket)! With such competitive prices, passenger numbers were believed to have been very healthy, (with occupancy levels at around 70 to 80%). But apparently rising fuel prices and increased competition appear to have taken their toll.

KPMG have been appointed as liquidators and Oasis is reported to be optimistic that a new investor will come forward to save the airline.

In the meantime hundreds of British holidaymakers and business people have been stranded in Hong Kong. Airline Cathay Pacific is offering Oasis customers a special one way economy fare on the Gatwick to Hong Kong route of £160 until 23rd April.

Perhaps ironically Oasis was named the world’s leading new airline at the World Travel Awards at the end of last year. Another budget airline based in Asia, AirAsiaX, is reported to be in talks with Stansted airport and Manchester airport about new flights to Kuala Lumpur in Malaysia.

This one has bothered me more than the others. It feels somehow closer to home, although for Bf’s airline, not being a low cost model, it is not as daunting as it must be for others.

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One Response to “ANOTHER Low Cost Airline (Oasis, Hong-Kong) goes bust!”

  1. This came as such a shock, as they were actively recuiting pilots, including a friends partner who handed his notice into Thomsonfly on Monday, as he had to give the usual 3 months notice to then find out this over the media on the wednesday, still waiting to see if he has secured his job back!

    My Bf had also applied to them, so it was certainly a sandwich chocking moment whist i was scanning the net during lunch, i then had to leave a voicemail to Bf who was flying at the time to tell him the ‘great’ news.

    I am starting to worry about the industry now……. i better go off and train to be a dentist, i know they are in demand!! 🙂


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