HK budget airline collapses, hitting 30,000 travellers and 700 staff Budget airline Oasis Hong Kong, which collapsed yesterday, was on the brink of a rescue package when it was discovered that its chairman had pledged his shares in the carrier as collateral for a personal loan, a source familiar with the situation said. The source said the discovery was made during the final stages of negotiations with HNA Group, parent group of Hainan Airlines, which had been prepared to buy out Oasis. 'You can say that he derailed the airline,' the source said, referring to chairman the Reverend Raymond Lee Cho-min, who held about 60 per cent of shares in the company. It was unclear how many shares Mr Lee had pledged as collateral. He was not available for comment last night. The rescue deal failed, prompting the world's first budget long-haul airline to file for provisional liquidation, affecting 30,000 ticket-holders and leaving 700 staff facing an uncertain future. Reports said losses had reached HK$1 billion since the airline launched services in October 2006. It is the fourth airline worldwide to cease operations in the past two weeks. The ambitious start-up airline struggled to attract fresh capital up to the last minute, but told the government late on Tuesday that discussions with a potential investor had collapsed. The administration had learned of the airline's financial difficulties on Saturday. Oasis sought protection from the High Court yesterday morning and accounting firm KPMG was appointed provisional liquidator. The 700 staff have been paid up to March 31. All passenger services were suspended immediately, forcing the government to send staff to London and Vancouver to liaise with stranded passengers. An estimated 30,000 passengers are believed to be holding tickets for which they have paid a total of HK$300 million. A flight from Vancouver, which landed in Hong Kong at about 10.30 last night, was the airline's last. Cathay Pacific and British Airways are offering Oasis passengers on the London route concessionary prices. Ticket-holders can also contact Singapore Airlines for services to London, and Air Canada and China Airlines for the Vancouver route. 'KPMG will be looking for new investors for the airline in the next few days and we are very confident somebody will come forward,' Oasis chief executive Stephen Miller said. He did not specify why Oasis declared insolvency. Budget carrier AirAsia and various takeover funds were being touted last night by market observers as possible buyers of Oasis assets. However, AirAsia chief executive Tony Fernandes denied his budget carrier was interested. KPMG head of restructuring services Edward Middleton said he had yet to evaluate the finances of Oasis and could not comment on media reports that losses had reached HK$1 billion. A government source said last night the administration would consider measures to control bookings made well in advance. Airlines could be required to place a deposit in a fund before being allowed to take bookings for travel several months or even years ahead, the source said. Hopes were high that Oasis, as a full-service airline, would help break the market dominance enjoyed by rival Cathay Pacific, which opposed Oasis' attempt to enter the market. Oasis is the first passenger airline to go bankrupt in Hong Kong. In October 1988, local freight carrier Transcorp Airways closed its operations.