Hong Kong-based budget carrier Oasis Hong Kong Airlines is saddled with heavy losses and will halt flights, local media reported on Wednesday, while its chief executive said a news conference would be held on the matter.
"We have no comment for the time being," Oasis CEO Stephen Miller told Reuters.
The airline, which began flights in October 2006, had accumulated losses of about HK$1 billion (US$128 million) during two years of operation as it struggled to grab a slice of the market, the Hong Kong Economic Times quoted unidentified sources as saying.
Sources close to Hainan Airlines -- China's fourth largest carrier and partially controlled by billionaire George Soros -- said the carrier was interested in buying Oasis in an effort to muscle into Hong Kong's aviation market.
The sources told Reuters the firm had been in discussions for months to acquire a controlling stake in Oasis, and had approached Hong Kong's government about the deal.
The Hong Kong Economic Times report added that Oasis had been suffering losses on almost every long-haul flight it flew.
The carrier's Web site -- which sells tickets -- was functioning as normal, and its flights were still listed on the Hong Kong International Airport's Web site.
Oasis operates flights from Hong Kong to London and Vancouver.
The Hong Kong Economic Times cited sources as saying that low estimates for operating costs were part of the reason for the airline's difficulties, while the airline was expected to announce details on refunds of about HK$100 million from advance bookings.