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)
Oasis 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).
|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
Skybus 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.
|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.
(May 07 to
|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.