The SCMP has picked up on the announcement by Hong Kong Oasis Airlines that I mentioned yesterday. They quote "industry sources" who appear to be sceptical, but who also seem to have missed the point:
The fare, just 40 per cent of the cost of a comparable ticket with competitors, will cover an economy seat on a Boeing 747-400 and include a basic meal. Including taxes and surcharges, the fare will be $1,600, as opposed to $4,070 and $3,790 offered by Cathay Pacific and Virgin Atlantic respectively.
The budget carrier will run just five flights a week against Cathay’s four daily flights on the same route.
Industry sources predict Oasis’ price-cutting strategy will have little impact on its rivals. A disadvantage for the airline is that it will serve only Gatwick Airport, 30 minutes by rail from central London’s Victoria Station.
With the operating cost of a flight from Hong Kong to London running at around $1.1 million, analysts said they did not expect the airline to be able to maintain the cheap fares. To break even, it would have to fill all 278 economy seats on the 359-seat B747-400 and sell the remaining luxury seats for $10,000 each.
"It’s an impossible task for a start-up airline," an industry source said.
What a load of old rubbish. Firstly, the fare that Oasis announced was HK$1,000 one way, which equates to about HK$3,200 return including taxes (20-30% cheaper than the competition, not 60%). Also, it seems fairly obvious that this will be the price only if you book in advance, and they will charge more for later bookings and at peak times (just like all other budget airlines). Cheap, but not unreasonably so.
As for Gatwick, there are advantages and disadvantages. Personally, I prefer Gatwick to Heathrow because it is smaller, but the disadvantage is that there are less choice of connecting flights – though there are more cheap flights (from Easyjet and others). The Heathrow Express may be faster than the Gatwick Express, but 15 minutes is fairly marginal when the total journey door-to-door is 16+ hours, and anyway Victoria is more central than Paddington.
Budget airlines have been successful because they offer something a bit different. If you want to fly to Heathrow on Cathay/BA/Virgin/Qantas then that’s fine, but soon you will have another choice.
Ordinary Gweilo 
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