Oasis may tap market for funds to expand fleet
Hong Kong's newest low-fare airline will offer flights to London from next month
Oasis Hong Kong Airlines, which will launch flights to London on October 25, said yesterday it might sell shares to the public as it looked to raise capital to expand its fleet of long-haul aircraft to 25 units in five years, according to chairman Raymond Lee Cho-min.
'Our aim to go public eventually is driven by the desire to make Oasis available to Hong Kong investors,' Mr Lee said at the airline's launch yesterday. 'We were told by investment banks that this could be possible within nine months after our launch.'
However, market watchers reacted with scepticism to the early timeline yesterday, pointing out local regulations require a track record of no less than three consecutive years of profit before qualifying to list on the main board.
Waivers have been given, but regulations also require earnings in the final year to be no less than HK$20 million and an aggregate of HK$30 million in the previous two years.
Positioning itself as Hong Kong's 'low-fare airline', Oasis said yesterday it would offer one-way business class tickets to London at HK$6,600 before taxes, one-third of the pretax price Cathay Pacific Airways will charge for a flight on the same day, according to its website.
The management would not say what proportion of business class seats would be sold at that price, or how long the sale would last.
'We would like to sell as much as possible [at HK$6,600]. But to get those fares you have to book early,' said commercial director Ken Chad. 'The number of seats we offer in business class will depend on the levels of competition and demand.'
Services to Vancouver within a year were also in the cards, the company said.
The carrier, whose shareholders put up US$100 million for the first phase of operations, said last month it would sell 10 per cent of economy class seats for HK$1,000 one way and before taxes for the first year of sales.
Fuel surcharges, landing fees and passenger taxes increase ticket prices by HK$785 per leg at present. But because it flies to London Gatwick airport rather than Heathrow, Oasis may offer marginally lower prices.
The service would start four times a week but would increase to daily flights by November, chief executive Steve Miller said.
Oasis plans to begin direct flights to Oakland by the start of next year, pending the purchase or lease of at least one of the five aircraft they plan to operate within eight months. 'We have made bids on a number of aircraft,' Mr Miller said.
It applied last month to the Air Transport Licensing Authority for a licence to fly direct to Vancouver, which is served by just two airlines, against the four airlines which fly direct to London. The application is pending.
Keen to limit the perceived threat to incumbents such as Cathay, Oasis has repeatedly said it aims to capture the one-stop traffic flying through north Asia and the Middle East.
But, with Cathay flying to Vancouver, London and San Francisco, the management admits it expects a competitive response in the form of lower fares from the incumbents on the routes it enters.
