American Cancels More Flights; Oasis Airlines Shuts Down; Frontier Stock Drops Below $2

Oasis

Busy day out there in Airlineland today.

First, we have another airline shutdown to report. Last night Oasis Hong Kong Airlines ceased operations.

The airline has applied for a voluntary liquidaton and is seeking new investors, CEO Stephen Miller said at a Hong Kong press conference.

According to Bloomberg, “Oasis began flying to London in October 2006 and added services to Vancouver about a year ago. It initially offered tickets to Gatwick for as little as HK$1,000 one-way, less than 20% the price then charged by Cathay Pacific for flights to Heathrow. British Airways Plc, Air New Zealand Ltd., Qantas Airways Ltd. and Virgin Atlantic also fly between the two cities.”

Quote of the day from this shutdown has to be the one from Cheah Cheng Hye, Chairman of Value Partners Group, LTD., which purchased $30 million in convertible notes in the airline last year.

Bloomberg quotes Hye as having said today as a press club luncheon in Hong Kong, “Of course I’m disappointed, but life goes on.”

Meanwhile, closer to home, life goes on and the MD-80 grounding continues to affect American Airlines. And not in a good way. As of a few minutes ago, the airline confirmed that it has already cancelled more than 1000 flights today. This, after the airline cancelled 460 MD-80 flights yesterday.

Nasty weather is also expected to roll into the DFW area later today. Then again, with so many airplanes grounded, maybe it won’t make any difference.

Finally, just a mention about the free-fall in shares of Frontier Airlines.

The airline’s shares closed under $2 yesterday, and today, shares are down again. As we post this, shares are down another 5% or so, hovering around 1.88.

It can’t help that Frontier is being mentioned in almost every article we read regarding the fragile financial state of the airline industry.

The airline, which we first put on the PlaneBusiness Titanic Watch a couple of years ago — once again was posted to the list in this week’s Titanic resurrection.

Ticker: (Nasdaq:FRNT); (NYSE:AMR)

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