Hong Kong budget airline Oasis in liquidation
Hong Kong budget airline Oasis stopped flying Wednesday and announced it had gone into liquidation, just 18 months after it first took to the skies with eye-popping low fares.
At a brief news conference, chief executive Stephen Miller gave no explanation for the shut-down, which comes amid soaring fuel costs that have recently forced the closure of other carriers worldwide.
The move left an unknown number of passengers stranded in Hong Kong and the airline's two destinations, London and Vancouver.
"It is with great regret that Oasis Hong Kong Airlines has today voluntarily applied to the Hong Kong court to appoint a provisional liquidator," Miller said.
"We have therefore suspended all passenger services with immediate effect."
He said financial services group KPMG had been appointed as liquidator, and that they would now be seeking partners.
"We are very confident that somebody will come forward," he said. Miller then thanked and congratulated Oasis staff on past achievements and walked out of the briefing.
All flights on Oasis departing from Hong Kong on Wednesday were cancelled, and travellers holding tickets were given a hotline number to contact.
Earlier, the Hong Kong Economic Times reported what it called a "rumour" that the company was struggling under debts of up to one billion Hong Kong dollars (128 million US).
Eddie Middleton, KPMG's partner in charge of restructuring services in Hong Kong, told reporters he had been first informed of a problem on Tuesday night and was appointed by the court on Wednesday.
He was not able to say why the company was in trouble and had not yet seen the carrier's accounts.
Middleton said his immediate priority was to help passengers who were stranded by the cancellation of flights or who had already bought tickets for future travel.
Hong Kong's transport secretary Eva Cheng said Oasis had been talking to potential investors and had stopped selling tickets once talks had broken down, according to local broadcaster RTHK.
She said the Hong Kong government had known that the airline was facing problems, but it did not make it public for fear it could have jeopardised the talks.
The last Oasis flight arrived in Hong Kong from London at around 3:00 pm (0700 GMT), and passengers were told on board of the company's problems.
"If they knew that clearly there was a problem in March, why are they still selling tickets from the 31st of March for travel in July? It is dishonest," said one disgruntled customer to local broadcaster CableTV.
John Weaver, a Hong Kong resident who had booked return tickets with Oasis for this summer with his wife and three children, said he had chosen the airline before because of their low price.
"I'm frantically trying to find out what's going on and whether I'm going to get my money back," he said.
Oasis launched in October 2006, offering one-way Hong Kong to London pre-tax fares of 1,000 Hong Kong dollars (128 US). It later added a link to the western Canadian city of Vancouver.
The company, which employs just under 700 staff, had been operating daily between Hong Kong and London, and six times a week between Hong Kong and Vancouver, with plans to open additional routes to Europe and North America.
The company was founded by husband-and-wife team Raymond and Priscilla Lee, who said in an interview last year with AFP that the Oasis model would succeed because their planes spent less time on the ground.
But Oasis suffered from a bad take-off when its maiden voyage was delayed 30 hours after Russia withdrew permission to fly over its airspace at the last minute.
However, their model shook up the already competitive industry.
Rivals including Hong Kong's Cathay Pacific were forced to lower fares to compete with the super-cheap offers. Cathay said Wednesday they would put on extra flights to try and help stranded Oasis customers.
Oasis was part of the push for low-cost flights that has been so successful in the European market and, alongside Malaysian-based AirAsiaX, the firm tried to create a long-haul version of the cheap model.
Despite the early setbacks, they managed to attract a 30 million US dollar investment by Hong Kong-based asset management firm Value Partners last year for new planes.
Value Partners said in a statement on Wednesday it believed its investment was well-protected.