On paper, the concept behind creating a low-fare, long-haul-only airline seemed simple enough. People want direct, non-stop flights to long-haul destinations but prefer the generally lower prices offered on routes that include one or two stops along the way. By marrying the two, local start-up Oasis Hong Kong Airlines, its backers believe, will be primed to capitalise on this market.
Unfortunately, the second-hand Singapore Airlines 747-400 that is currently being flown - half of the airline's fleet of two - was grounded on Wednesday for its maiden flight to London's Gatwick Airport after permission to fly through Russian airspace was denied at the last minute. The flight took off the next day and arrived at Gatwick on Friday, although the return leg passed over the Middle East as Russian authorities had granted permission only for the maiden flight.
'That is a complexity that we do have as a long-haul carrier. If you're flying in the US, you don't need to have overflight rights for anywhere else. That's a complexity we have, but it's not one that is unresolvable,' Oasis commercial director Kenneth Chad said.
Whereas carriers in the US and Europe ply their trades in single markets, Asia's budget start-ups face substantial regulatory hurdles.
'The biggest issue here is international traffic rights,' said Derek Sadubin, general manager of the Sydney-based Centre for Asia Pacific Aviation. 'But we have been seeing a gradual liberalisation of air services agreements across Asia.'
Traditionally, the bilateral rights for any two countries' most lucrative routes have been awarded to their flag carriers; in many cases, they are the sole airlines within those countries. But governments, eager to maintain their country's economic momentum, are under increasing pressure to open the biggest travel centres to more competition.
