updated 10/26/2007 7:06:54 PM ET 2007-10-26T23:06:54

Budget long-haul carrier Oasis Hong Kong Airlines said Friday it carried 350,000 passengers over its first year, disproving critics who predicted the airline would never get off the ground.

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It almost didn't. The inaugural flight to London was delayed by seven hours while passengers remained on the plane because it wasn't cleared to fly over Russian airspace.

That flight was rescheduled, but Oasis went on to attract passengers with its cut-rate tickets and other promotions, including free flights for children accompanying their parents, big discounts for people over 55, and free business upgrades for teachers.

Oasis, with its fleet of five Boeing 747-400s, flies daily to London and in June it added flights to Vancouver six days a week.

The budget airline has shaken up the Hong Kong aviation market, prompting traditional carriers to cut their fares. Cathay Pacific, for example, has slashed its prices to London and Vancouver by nearly half.

Critics had questioned whether the cut-price model so successful in the short-haul market could transfer to the long-haul sector, and also in Hong Kong where high airport landing fees have deterred budget carriers in the past.

To mark the airline's one-year anniversary, Chairman and co-founder Raymond Lee told reporters Friday that Oasis would offer one-way economy class tickets to London or Vancouver for HK $1,380 (U.S. $176; euro 123) excluding tax. The flights can only be taken on Tuesdays up until Dec. 4.

Lee said the airline would add two new destinations soon.

"These (discounts) are not just promotions, they are actually an expression of our mission; of our corporate culture ... to provide travel opportunities to those other airlines have written off," Lee, who is also a Christian pastor, said in explaining the company's business model of "doing well by doing good."

His wife, Executive Director Priscilla Lee, said the airline had carried 350,000 people over the last year and that they were on track to realize their "mission" of improving Hong Kong's economy and society.

Some 34 percent of passengers were repeat customers with one person traveling 30 times in the last year, she said.

The Lees — successful property developers and active philanthropists — set up the airline with a U.S. $100 million (euro 69.8 million) investment last October. They have a 50 percent controlling stake. Other investors include the chairman of local electronics firm VTech Holdings Ltd., Allan Wong, who has a 20 percent stake, and fund management firm Value Partners Ltd. with a 5 percent stake.

The airline has not revealed earnings for the last year. In March, the company said it had achieved a cash-flow break even on its Hong Kong to London route, but gave no further details.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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