Oasis Hong Kong Airlines on Monday said it might launch an initial public offering as early as next July as the long-haul budget airline strives to convince investors that it could win a slice of the region’s competitive aviation market.
The start-up carrier said it would start services between Hong Kong and London on October 25 for as little as HK$1,000 (US$130) one-way. It will compete with four airlines, including Cathay Pacific, currently serving that route.
Stephen Miller, chief executive, said Oasis aimed to win customers who fly to Europe indirectly, which account for about 20 per cent of total traffic between Hong Kong and Europe.
“Foreign airlines are feeding the Hong Kong market to Europe because passengers cannot afford to fly direct or they can’t find a seat. We would like to reclaim these passengers for Hong Kong,” said Mr Miller.
The airline’s Hong Kong-London economy service will cost between HK$1,000 and HK$4,200 one-way, compared with about HK$5,000 for an return ticket with traditional airlines. Business class tickets will start from HK$6,600 one-way.
Oasis is not completely no-frills. It will provide complimentary hot meals and inflight entertainment. It also plans to carry cargo, which will account for 20 per cent of its revenue. Almost a quarter of its seats are business class.
“We limit our costs not by lowering our quality but by raising productivity,” said Mr Miller. He said the carrier hoped to achieve an average utilisation rate of 16 to 17 hours for its aircrafts, compared with about 12 to 13 at Cathay Pacific, Hong Kong’s largest airline.
The start-up carrier, which has a start-up capital of US$100m and just two planes, plans to grow to five by 2007 and 25 within five years of its launch.
Raymond Lee, chairman, said it was exploring ways to raise funds, including an IPO which could happen “as early as nine months after the launch”.