The sudden collapse of Oasis Hong Kong Airlines shows how quickly the pressure is rising for the world's airlines as they struggle to deal with surging fuel prices and softening economic growth.

Start-up carriers such as Oasis are especially vulnerable, and inevitably it is the new business models, usually dreamed up in the years of feast, that start to look most at risk in times of famine.

One of the first casualties of the accelerating shake-out was Maxjet, a pioneer of the new breed of all-business class carriers that began springing up to fly the North Atlantic three years ago.

Maxjet, US-registered but listed on Aim, London's junior market, collapsed into bankruptcy late last year.

It blamed its demise on fuel price inflation, tough competitive pressures and a decline in consumer spending.

In addition, the turmoil in the financial markets had made it impossible to raise fresh funds.

In recent weeks, at least five other US carriers have thrown in the towel, including small charter airlines.

But the casualties include Skybus, a start-up low-cost carrier with new orders in place with Airbus for 65 A319 jets, and well-known names such as Aloha Airlines with more than 60 years' history and ATA.

Leading US airlines are reducing capacity in the domestic market, grounding old short-haul aircraft and are scrambling to try to increase fares as they struggle to come to terms with an oil price of more than $100 a barrel. In Europe, Alitalia, the perennially lossmaking Italian flag carrier, is teetering on the edge of bankruptcy while the Italian unions decide whether or not to accept big job cuts and a shrinking of the airline in return for a last-ditch rescue by Air France-KLM.

Among the industry leaders, British Airways has already warned that profit will decline significantly during the next 12 months. Both Ryanair and EasyJet, Europe's two biggest low-cost airlines, have issued profit warnings, with Ryanair saying its profit could fall by as much as 50 per cent under the impact of rising oil prices and falling fare levels.

"When the tide goes out, you find the business models that were never sustainable," says Chris Avery, aviation analyst at JPMorgan.

Oasis Hong Kong styled itself as a low-cost long-haul carrier but in reality it was more a low-fare airline with a mix of some of the elements of the short-haul low-cost carriers that have proved so successful, alongside some of the high-cost elements of the traditional full service, long-haul carriers.

Asia has become the world's fastest-growing aviation market and Derek Sadubin, chief operating officer at the Centre for Asia Pacific Aviation, a Sydney-based consultancy, says the collapse of Oasis was unlikely to stop "a proliferation of new airlines in this region in the next few years".

He says Oasis had made some specific, questionable choices, however, notably devoting almost 25 per cent of its seating capacity to business passengers, thereby reducing the total number of seats available.

Oasis was also flying four-engine Boeing 747-400s, consuming more fuel than twin-engine aircraft. Further, as a stand-alone company, it did not have the brand recognition and internet booking synergies that airlines like Jetstar and AirAsia X have.

Mark Webb, Hong Kong-based transport analyst for HSBC, says the fate of Oasis "indicates that the low-cost long-haul model is problematic". He adds: "Low-cost regional and short-haul models have been working in other markets but long-haul, low-cost hasn't really worked anywhere else. Nobody has been able to do a profitable low-cost, long-haul carrier."

Still, Stephen Miller, Oasis chief executive, last night defended his airline's business model. "It just needed a little more time and a little more network [destinations], and a critical mass of aircraft . . . Oasis has shown that the business model is accepted by the market."

Analysts also said yesterday that the demise of Oasis would not halt moves by some Asian legacy carriers to develop low-cost offshoots. Among them, All Nippon Airways recently established an Asian strategy unit in Hong Kong to look at regional expansion and forge ties with possible joint venture partners for the launch of a low-cost airline.

Azran Osman-Rani, chief executive of Malaysia-based AirAsia X, said: "The Oasis example reinforces our view that a sustainable low-cost, long-haul airline model must stick to core principles of high aircraft utilisation and high seat density to achieve a sustainable cost position".