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Oasis Airline from Hong Kong goes bust

Monday 14 Apr 2008 7:57am

Hong Kong's buget airline Oasis has gone bust after only operating for 18 months. The airline bought all its planes, rather than renting, and that combined with the rising costs of fuel prices (which have increased over 60% in the last year) led to the downfall of the company. The company was run by husband and wife team Patrick and Priscilla Lee and in an open letter published late last week they said: "As a newly started airline, we have found it next to impossible to obtain a credit facility from financial institutions to carry out fuel-hedging programmes. We only managed to hedge once, successfully. . . . " "As oil prices sharply increased, the fuel costs took up the majority of our budget". . . Adrian Lowe, an aviation analyst with an american brokerage firm said that buget airlines have a difficult job getting into the airline market and unless they have a strong financial backing, the will struggle. Three airlines also went bust in America in the last two weeks as the economic climate and rising oil prices take their toll. Despite going bankrupt, Oasis said that they did have strong demand for the routes they were flying - but the critical mass of destinations and aircraft were what was missing. Its estimated that 700 staff will be out of work, and 30,000 passengers will have to repurchase their tickets with another airline. Its unknown how many passengers were left stranded when the airline went into bankruptcy.

Browse tags: #HKG

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