bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Russell Barling

The lure of the heavens has compelled some unlikely and colourful businessmen to try their luck in the lottery that is the aviation industry. It is the stuff of which dreams are made.

History is full of Howard Hughes wannabes and some - Sir Richard Branson, Tony Ryan and to a lesser extent, Warren  Buffett are recent examples - have done well out of air travel.

But few have had the success of those men. As Sir Richard famously said, the simplest way to become a millionaire is to 'start as a billionaire and then buy an airline'.

For airline owners, the flight plan to fame and fortune is fraught with turbulence. Just ask the Reverend Raymond Lee  Cho-mo, whose airline aspirations underwent a baptism of fire this week.

The majority owner of Hong Kong Oasis Airlines, Rev Lee sought to turn conventional wisdom on its head by launching the world's first long-haul, low-cost carrier.

His plan was abruptly grounded Wednesday by Russia's unpredictable regulatory regime.

To make matters worse, he, his wife Priscilla and senior Oasis management suffered the ignominy of being locked in the aircraft with some 270 frustrated passengers and two television crews for five hours as ill-fated negotiations were undertaken in the vain hope of saving the inaugural flight.

Rev Lee at one point began to pray, according to a passenger on the flight. 'They are very religious people,' the witness said. 'I guess they were looking for help from wherever they could get it.' There was no immediate response from above and the aircraft remained grounded.

Veteran airline executives who have braved the Asian financial crisis, the aftermath of 9-11, Sars and skyrocketing fuel costs, all in the past decade,  probably were muttering under their collective breath 'welcome to the industry' while publicly professing empathy for their new brethren.

Delayed divine intervention or not, Oasis  eventually was successful, sending its red and orange livery skyward to London 24 hours late at 1.05pm yesterday.

Only time - and the carrier's track record from here forward - will tell for how long the rocky start will tarnish its reputation. Oasis,  meanwhile, can take consolation in the fact it is not the only South China carrier to have its best-laid start-up plans go awry.

Macau Asia Express (MAX), Air Macau's emerging low-cost carrier, parted ways this month with Ed Winters, the man picked to be its chief executive, after failing to come to contract terms.

With no  chief to drive the airline's certification process, its target of a year-end launch is proving to be hugely optimistic.

At Viva Macau, all has gone silent for the past few weeks, encouraging doubts about whether the airline will ever get off the ground in its present form.

Oasis sceptics say the reason no one has braved the low-cost, long-haul model is  that the numbers suggest it probably won't work.

For one, conventional wisdom argues that regional flights - the preferred model in mature budget travel markets such as Europe and the United States - allow airlines to keep their aircraft in the air for more revenue hours each day.

Oasis's research contradicts that. According to Rev Lee, offering long-haul services will give Oasis a 30 per cent better utilisation rate than regional models that average about 13 hours a day per aircraft.

Of course, Oasis will be able to exploit that advantage only when its fleet reaches at least five aircraft, which is why management is not expecting to turn a profit for the first 18 months.

With two aircraft flying only to London, Rev Lee said Oasis would have to maintain 'extremely high' load factors to turn a profit.

Four aircraft and an extra service to Oakland, California - due in the first quarter - will bring the break-even load factor point to the mid-80 per cent levels while six vehicles may even bring it below the 80 threshold.

Oasis is in negotiations with carriers such as Malaysian Airlines to increase its fleet size as soon as possible through lease or purchases. More aircraft will also  allow Oasis to lift its hourly aircraft utilisation levels and spread operating costs.

The carrier expects to move more than 55,000 people between Hong Kong and London in the first three months and 190,000 in the first full year.

That has all yet to play out in the real and often volatile aviation theatre. What's sure is that long-haul services get better fuel efficiency than their regional counterparts.

Whether Rev Lee and his investors will be proven right, allowing them to join the elite club of profitable aviators, is still up in the air. But those who dream of owning an airline will be watching.

They may even be praying for its success.



Oasis success still on a wing and a prayer to distant horizon