HK budget airline collapses, hitting 30,000 travellers and 700 staff
Budget airline Oasis Hong Kong, which collapsed yesterday, was on the brink of a rescue package when it was discovered that its chairman had pledged his shares in the carrier as collateral for a personal loan, a source familiar with the situation said.
The source said the discovery was made during the final stages of negotiations with HNA Group, parent group of Hainan Airlines, which had been prepared to buy out Oasis.
'You can say that he derailed the airline,' the source said, referring to chairman the Reverend Raymond Lee Cho-min, who held about 60 per cent of shares in the company. It was unclear how many shares Mr Lee had pledged as collateral. He was not available for comment last night.
The rescue deal failed, prompting the world's first budget long-haul airline to file for provisional liquidation, affecting 30,000 ticket-holders and leaving 700 staff facing an uncertain future. Reports said losses had reached HK$1 billion since the airline launched services in October 2006. It is the fourth airline worldwide to cease operations in the past two weeks.
The ambitious start-up airline struggled to attract fresh capital up to the last minute, but told the government late on Tuesday that discussions with a potential investor had collapsed. The administration had learned of the airline's financial difficulties on Saturday.
Oasis sought protection from the High Court yesterday morning and accounting firm KPMG was appointed provisional liquidator. The 700 staff have been paid up to March 31.
