Published: 14 Apr 2008: Post the recent entry of Oasis Hong Kong Airlines into voluntary liquidation after 17 months of service, concerns have been raised about the viability of the low cost long-haul model.
For its part, as Centre for Asia Pacific Aviation (CAPA) analyses the situation, it states that the model is here to stay.
"Where Oasis has failed, others will prosper," it stated.
In a release, CAPA highlighted CEO, Azran Osman-Rani comment saying, "the Oasis example reinforces our view that a sustainable low-cost, long-haul airline model must stick to core principles of high aircraft utilisation and high seat density to achieve a sustainable cost position."
The Association referred to plans of Jetstar International (Qantas it plans to double Jetstar International´s fleet of A330s, by leasing six of the type while the carrier awaits delivery of its first of 15 B787s) and AirAsia X (the airline is taking delivery of the first of 25 392-seat A330-300s in October 2008 and is planning a considerable international network) and said that both carriers have business models better suited to prevailing market conditions – and the key lies in cost reduction through maximising seating density.
"Unlike Oasis, which dedicated 22% of its total seating capacity in a generous cabin layout (81 seats with 60 inch pitch in Business Class), AirAsia X will have 7% of seats in its new A330s in Premium Economy (28 seats with 38 inch pitch) and 364 Economy seats in an aircraft with a much smaller floor space than Oasis´ B747-400s. Jetstar is allocating 12.5% of its seating capacity to its Premium Economy cabin," it stated. "Aircraft selection and utilisation is also critical to the low cost long-haul model. AirAsia X for example, flies its aircraft 18 hours per day, foregoing the same daily departure time slot for its services in order to turn the aircraft in under 75 miniutes and keep it flying to the next destination."
