Oasis and Skybus failures impact Hong Kong and Columbus

Image: Oasis Hong Kong

The recent collapse of two airlines, both of which had been operating for less than 18 months, is a stark reminder that most airlines are not immune from the harsh realities of the business world. Oasis and Skybus may have started out with very different business models in their respective Hong Kong and Columbus (Ohio) markets but both perceived that there was a viable niche that could be exploited.

Oasis: long-haul LCC from HKG to London (and Vancouver)

Image: Oasis Hong Kong planeOasis Hong Kong airlines began operating in October 2006 between Hong Kong and London Gatwick with two 747-400s capable of accommodating 359 passengers in a two-class configuration. Flights operated daily from Hong Kong in competition with Cathay Pacific (four daily flights), British Airways (three daily flights) and Air New Zealand (daily flights) all of whom served London Heathrow. Promotional one-way fares were available for as little as £75 ($150).

Chart: UK - Hong Kong Traffic 2005-2008
Source: UK CAA

Airport traffic data shows that in 2007 Oasis grabbed a 12.5% share of the UK – Hong Kong market as total traffic grew by 15.4%, aided by demand growth of 2.6% on the Heathrow to Hong Kong route. From 16 December 2007 Oasis increased frequency to Gatwick to 10 weekly flights. Normal economyOasis fares were on offer then from £177 ($350) one-way with businessOasis fares starting from £668 ($1340) one-way.

A second route to Vancouver was added on 28 June 2007 operating six times weekly.

Skybus: ultra low-cost based in Ohio

Logo: SkybusSkybus was based in Columbus, Ohio and was an ultra low-cost airline that operated A319s to a variety of more obscure airports. Adopting some ideas from Ryanair the airline became something of a pioneer in seeking out under-used, or previously never-used, airfields close to metropolitan areas.

It began operating on 22 May 2007 and launched a total of 18 destinations from Columbus. According to US BTS data between May and the end of January this year the airline carried three-quarters of a million passengers at an average load factor of 73% from its home base.

Chart: Skybus operations at Columbus May 2007 - January 2008
Source: Derived from BTS data

In January Skybus had grown sufficiently to become the largest airline at Columbus with 19.5% of traffic, just ahead of Southwest with 19.1%. In 2007 Columbus Airport saw traffic grow 14.6% to over 7.7 million passengers.

Load factors had suffered in December and January as the airline launched five new routes. A detailed look at the passengers carried on each route from Columbus and the average load factor achieved reveals the sluggish start made by some of the routes started most recently.

Destination Passengers Load factor
(May 07 to
Jan 08)
Route start date
Burbank (BUR) 99,711 76.5% 22 May 07
Portsmouth/Boston (PSM) 96,298 71.9% 22 May 07
Fort Lauderdale (FLL) 89,878 74.8% 29 May 07
Greensboro (GSO) 59,683 75.9% 29 May 07
Richmond (RIC) 55,069 75.7% 23 May 07
Oakland (OAK) 53,919 80.5% 12 Jun 07
St Augustine/Daytona Beach (UST) 50,769 74.5% 18 Jul 07
Kansas (MCI) 50,412 69.5% 22 May 07
Bellingham/Seattle (BLI) 47,646 75.0% 29 May 07
San Diego (SAN) 42,385 74.5% 16 Jul 07
Chicopee (CEF) 37,685 67.6% 16 Jul 07
Punta Gorda (PGD) 29,627 75.1% 05 Dec 07
Gulfport/Biloxi (GPT) 10,882 65.1% 05 Dec 07
Milwaukee (MKE) 8,877 56.0% 05 Dec 07
Chatanooga (CHA) 8,645 52.7% 05 Dec 07
New York Stewart (SWF) 5,749 40.7% 06 Jan 08

A second base was opened in mid-January at Piedmont Triad International airport (GSO) near Greensboro in North Carolina. Six new routes were opened in January, two in February and two in March. All routes were served either daily or twice-daily. Sadly, they never got the chance to establish themselves.

Back in October 2006 the airline placed an order for 65 A319s. The first of these was due to be delivered later this year.


Comments

  1. Andreas Akerman says:

    What about Virgin Atlantic flying LHR-HKG?

    anna.aero replies: Oops! Not sure how we overlooked that one or the fact that Qantas also operate daily between LHR and HKG. No wonder Oasis found it tough!

  2. Bob says:

    Great read. With so much mail coming in anna.aero gets right to the heart. Easy read. Has all the facts.

Comments are closed