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Curtains for Oasis, white knight sought for FAT, Nok Air in crisis talks

12-Jun-2008
  • Oasis Hong Kong assets to be liquidated – high court order
  • Far Eastern Air Transport Corp employees protest, calling on government to save the carrier
  • Indian state governments considering standardise fuel taxes;
  • SpiceJet and Deccan foreshadow capacity cuts;
  • Nok Air investors hold crisis talks amid mounting losses;
  • Thai Airways announces doubling of some international fuel surcharges;
  • Australian consumer sentiment crashes to 15-year low;
  • Oil price jumps USD5 in New York.

The pressure on some Asia Pacific airlines from high fuel prices is

palpable.

level set after last Friday’s USD11 spike.

On the same day that Oasis Hong Kong was officially wound up by a High Court order, 600 employees of Taiwan’s Far Eastern Air Transport Corp (FAT) employees took to the streets in Taiwan demanding the government find a solution to restore the airline’s business. Negotiations with an unnamed white knight investor are reportedly ongoing. Jetstar Asia was linked to the carrier last month and while FAT sits on some potentially lucrative international rights, it would require an investor with a high risk tolerance to save FAT.

In India, where state governments are considering a proposal to standardise fuel taxes across the country to help the industry deal with crippling losses, SpiceJet has foreshadowed a 14% cut in capacity. It follows remarks by Deccan that route rationalisation with Kingfisher is likely.

In Thailand, the shareholders of budget airline Nok Air have held talks to discuss the carrier’s mounting losses and chart its future direction. Parent, Thai Airlines, which has been frustrated by a lack of control over the budget unit, has again threatened to establish an affiliate carrier, to be positioned between Thai’s full-service model and the budget airline concept, if needed.

Thai Airways meanwhile announced a doubling in some of its international fuel surcharges, on top of plans earlier in the week to suspend Bangkok-New York service from 01-Jul-08 and sell its fleet of four A340-500s.

Meanwhile, Australian consumer sentiment has crashed to a 15-year low, which could already be weakening air bookings. Tiger Airways is pulling out of Newcastle at the same time as Jetstar is increasing its frequencies at the city, while Tiger is expected to fill any gaps should Virgin Blue downsize at the Gold Coast. The net result has been to maintain overall capacity levels in the market – for now.

It all comes as oil prices bounced USD5 higher in New York overnight, virtually wiping out this week’s falls from the near USD140 per barrel


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