Playing fair
Ear, this is a bit fishy

Not flat, but not packed

Today's SCMP (subscription required) reports Oasis are now applying for permission to fly to Vancouver (their 3rd destination after London and Oakland).  Apparently Chicago is another destination they are considering.

I am still not convinced that Oasis is a budget airline, and I have argued before that what gives them a real edge is having a competitively-priced business class (starting at around one-third of what Cathay/BA/Virgin charge), so I was interested to see this quote from Steve Miller (in the Christian Science Monitor):

Competitive edge in business class?

So how can they keep fares so low? The secret, says Steve Miller, CEO of Oasis, lies in the efficient use of aircraft and crews, flexible pricing, and an attractive business class. Advertised one-way fares from Hong Kong to London start at $147, but most flyers pay more, and business-class seats start at $920. Fares between Hong Kong and Oakland, due to begin in June, will be slightly higher on this longer route, he says.

At the front of its Boeing 747-400 plane, where business-class passengers can stretch out on reclining beds, is where Oasis spies a competitive edge among self-employed travelers who pay their own way, unlike corporate fliers. Business people who would otherwise settle for coach can now afford an upgrade. "Every business man or woman should be able to fly business class and arrive in a state where he or she can get down to work immediately," says Miller.

That may sound ominous for large carriers who rely on business-class revenues to cover their overheads. But industry analysts say that growth in low-cost airlines in Asia has expanded the market by luring price-sensitive passengers who might otherwise not travel, particularly on short vacations or family visits, so start-up carriers may not directly cannibalize full-service airlines.

In the last ten years, airlines such as BA, Cathay, Virgin and Air New Zealand have made huge improvements to their long-haul business class, and increased prices to match.  What Oasis are offering is something similar to old-style business class with a big seat, lots of legroom and recline, but not a flat bed - and for a lot less money.  That strikes me as a fairly attractive proposition.

UPDATE (16/02/07): Business Week has a story on Oasis that suggests that they are not being as successful with Business Class as I had expected:

Competition on the London-Hong Kong route is fierce, with five well-established carriers operating non-stop services between the two cities. But Miller says Oasis is going after a different market from British Airways, Virgin Atlantic, Cathay Pacific, Qantas, and Air New Zealand. Instead, Oasis is targeting passengers travelling between Hong Kong and London on the dozen or so carriers such as Emirates, Gulf Air, and Finnair that now offer one-stop connections between the two cities at cheaper fares than the likes of British Airways or Cathay.

Oasis also hopes to lure cost-conscious small and medium-size businesses "who pay their own way," instead of big corporate customers who have established deals in place with the major carriers. But so far, filling business class seats has been tougher than expected, with average passenger loads running at around 40% compared to more than 70% in economy class.

40% is not very good.  Strange really, considering their prices.


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