I agree- certain aspects of your idea are already employed with great success by the middle eastern airlines (Emirates, Qatar, Gulfair etc, who fly sectors of under 8 hours with a connection in the gulf).
What I dont understand is that apparently Oasis broke even after six months. What happened? I fly LON-HKG regularly and the cheapest Oasis fares were actually quite expensive towards the end, comparable to BA, AF et all and actually more expensive than Air New Zealand. Why did they increase their prices? It is price which ultimatly drove away customers.
