5.2 .2 External Factors Causing Oasis’s Failure
As to the external factors, firstly, Oasis faced with fierce competition from both other budget airlines and traditional airlines. The main competitor in Hong Kong is Cathay Pacific, the world's third largest airline, which competes in the low-fare sector by offering extremely attractive fares in its economy class cabins. Notably is that Cathay started a 'fanfares' programme that provides a limited amount of cheap tickets in a short period in 2012, which means new entrants into budget airline industry will feel more pressure from this magnate.
Moreover, the charges of Hong Kong International Airport are relatively high for many starters in budget airline industry. According to an analysis report released last year by the International Air Transport Association, the cost of operating at HKIA is twice the average for the whole Asia-Pacific region. However, with the financial support from related parties, it is less of a problem to Jetstar and Hong Kong Express, wholly-owned subsidiary of Qantas and sister airline of Hong Kong Airline respectively.
Oasis' failure also came at a time when oil prices were skyrocketing to more than US$100 a barrel. Despite the fact that the oil price remains high currently, Jetstar can get a lower price by acquiring jet fuel from its parent Qantas, which has more than 200 planes and can bargain more effectively with fuel suppliers than Jetstar could on its own.
All in all, the three external factors causing Oasis’s failure should raise investors’ awareness of the local competition in Hong Kong, while airport charges and oil price are less of a concern.