Steve Miller, who ran Dragonair before it was taken over by Cathay Pacific Airways, will serve as the new carrier's chief executive. Although Mr Miller calls the new airline a low-cost carrier, it departs from the traditional business model in that he hopes to work with travel agents and tour groups, and avoid regional routes for long-haul destinations.

Oasis also plans to operate a small fleet of either Boeing 747-400 or Airbus A340-300 aircraft that will fly high frequencies to a handful of tourist gateways.

It aims to launch services to Europe by the end of this year, possibly expanding to North American cities by the end of next year.

'We will move quickly to three aircraft within three months and aim for five aircraft in two years,' Mr Miller said. 'We want to start small and will begin with two or three destinations in Europe.

'It's good to have a spread of points, so that tour groups can enter Europe through one city and depart through another.'

London's Stansted airport is one destination under consideration, as are Berlin, Vienna and cities in Switzerland, Italy and central Europe.

News of Oasis' intended launch comes just days after it emerged that Hong Kong and Macau are battling to be the base for another low-cost airline aspirant, WOW Macau, headed by Cathay's former head of international affairs, Andrew Pyne.

Rather than offering ultra-low fares as other budget carriers have done, Oasis aims to price its fares at the same level as carriers operating from Hong Kong to Europe through Middle Eastern or other Asian hubs, such as Emirates or Gulf Air. These flights, which are known in the airline industry as 'sixth freedom' services, are typically 20 to 40 per cent cheaper than those of Cathay, depending on the time of year.

Mr Miller said Oasis would offer the same fare levels without requiring travellers to change planes or stopover en route to Europe.

He added that the start-up airline would fend off the expected competition from incumbent carriers between Hong Kong and Europe by being 'lean and mean'.

'I've experienced that kind of competition when I was running Dragonair,' he said.

'It's been 20 years since I founded Dragonair, and I had never thought of starting another airline in Hong Kong until now because the timing wasn't right and the government's attitude wasn't right. But now is the time.'

While the government has made some moves to liberalise commercial aviation in Hong Kong, start-ups still face an uncertain regulatory environment in the route application process.

CR Airways, which finally launched its first scheduled services to Nanning last month after nearly two years of operation as a charter carrier to the Philippines and Cambodia, is still in the dark over an application for licences to 10 mainland destinations lodged almost a year ago.

Oasis's backers include Raymond Lee Cho-min, a Boston-based property developer with local connections, and Allan Wong Chi-yun, chairman of consumer electronics maker VTech Holdings.

Mr Lee chairs Oasis Development Enterprises, a property investment company active in the Boston market.