Rights glitch grounds Oasis launch

Oasis Airlines (甘泉航空), the world's first long-haul budget airline, was forced yesterday to cancel its inaugural flight from Hong Kong after failing to obtain rights to fly over Russian aerospace.

"It's extremely unfortunate and we are very disappointed. We are doing all we can to resolve the problem," Oasis commercial director Ken Chad said.

Chad said the carrier is seeking to fly again to London's Gatwick Airport today and is looking at alternative routes if it still fails to get approval from Russian authorities.

Oasis was forced to abort its flight after 300 passengers -- including the carrier's chairman Raymond Lee (李卓民) and chief executive Stephen Miller -- were stuck in one of its two Boeing 747 jumbos for nearly six hours due to a last-minute hold-up in approval to overfly Russian aerospace.

"We are in talks with the Russia authorities. We paid for the overfly rights and we got the approval code, and yet at the last minute, they held us up," Chad said. "We have not had any explanation."

He said the airline will offer HK$500 (US$65) transportation fee to all local residents, free accommodation and food for foreign travellers as well as a free flight voucher to all passengers on board.

Local TV reported some angry passengers demanding more compensation from the airline.

Economy passengers paid HK$1,000 for the one-way journey, a special introductory offer that will last until Dec. 14. Business travellers, for their part, paid HK$6,600.

"Our vision is to give Hong Kong high-quality, low-fare and direct flight services," Lee said at the launch.

Industry analysts are watching Oasis closely as it competes against Asia's leading airline Cathay and Britain's established British Airways and Virgin Atlantic, which charge at least double the price on the same route.

Oasis promises full-value service at budget prices -- serving two hot meals and complimentary tea, coffee and water with soft drinks, snacks and alcohol available for purchase in the economy class.

Both economy and business classes have personal back-seat TVs with a choice of up to 16 video entertainment channels, offering films including last year's Batman Begins and Ocean's 12 from the year before.

The carrier said it hopes the ticket price will remain 30 to 40 percent lower than other major airlines after its promotional period, while at least 10 percent of the economy class will still cost only HK$1,000.

Lee said the airline is actively seeking to increase its fleet to five in its first year of operation, hoping to bring this up to 25 planes in five years.

Lee believes it will take 12 to 18 months for the carrier to break even.