Breakfast at the Oriental – low cost launches

Airline launches are full of clich駸. New carriers often promise a “new chapter in aviation history.” Many announce a “new dawn in business travel” and the word “revolution” is bandied about as often as “solutions” at a software convention.

The European launch of Oasis Hong Kong Airlines had all the old favourites, yet there was something in the way they were delivered that was slightly messianic. The answer lay in the founder’s former profession – the Rev Dr Raymond C Lee was a pastor (the doctorate, incidentally, is an honorary title in business administration). Mass transportation was, in his words, akin to the Lord’s work. “I find being able to transport millions of people around the world, who had previously not been able to afford flying, a very spiritual aim,” the Reverend explained.  

Rev Lee is chairman of the Oasis real estate group and one of three investors between them ploughing around HK$780 million ($100 million) into the start-up airline that bills itself as low-cost long-haul. Flanked by his well-groomed, exuberant wife Priscilla and team of other aviation experts, he unveiled the airline’s new livery (designed by a swanky Japanese graphics company, with no-doubt welcome input from the Lees and their team) to the UK travel press at the Mandarin Oriental Hotel, a famously exclusive retreat in London‘s chi-chi Mayfair district.

Love him or loathe him, Michael O’Leary of Ryanair knows a thing or two about paring costs back to a minimum in all areas of his business. The Irish low-cost carrier’s press conferences have only recently moved to a city of London venue, with an eye to investors, but you can almost see O’Leary wince at the expense of each biscuit munched or cup of coffee consumed by journalists. O’Leary also famously left a red-faced Flight International editor to pick up the tab after a long lunch (a no-no for hacks).

Yet Oasis saw no contradiction between the sumptuous surroundings of the main ballroom of the Mandarin Oriental, complete with logos etched onto the Louis XV mirrors, and talk of operating costs so low that one way fares of HK$1,000 to London would turn a profit in 18 months. Journalists incongruously wolfed down croissants baked by P穰isserie Val駻ie and sipped Mandarin Oriental blend coffee while aviation stalwart Stephen Miller (founder and previous chief executive of Dragonair) gamely tried to explain how high aircraft utilisation would drive down costs.

This high aircraft utilisation is based, however, on an 11.5h flight, initially only four times per week. The low-cost strategy is further enhanced by having UK-based flight crew accommodated between flights in Hong Kong.  “The fuel burn is lower with fewer take-off and landings, as is maintenance costs and every other line item on long-haul flights,” Miller clarified. Duty-free sales, add-on hotel bookings and car rental tie-ups are also lower with fewer take-offs, he may have added. As would be food and drink sales, if they were not already included in the low fare. Another long-haul low-fares airline, Zoom from Canada, by contrast, charges mid-flight for headphones and passengers pay for extra legroom.

In the airline’s defence, the cash-rich carrier owns its two Boeing 747-400s and is ramping up destinations served to add Oakland, California and Cologne-Bonn to increase the aircraft usage. And anyone risking serious money to open up long haul air traffic to a wider section of the market should be congratulated.

Yet as I left the briefing clutching a 1:200 scale model 747 and the nicest in-flight toiletry set I have received since the launch of now-defunct Phuket Air, I could help wondering whether the multimillionaire pastor had really gotten the whole budget traveller ethos.

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