Oasis Hong Kong Airlines' long-awaited maiden flight has to wait longer.

The budget airline was scheduled to operate its inaugural flight to London yesterday but had to cancel it because its plea to fly over Russian territory was rejected.

The airline rescheduled the flight that was supposed to take off at 1 pm yesterday and would announce a specific date later.

The cancellation left more than 300 passengers stranded at Hong Kong airport for more than five hours. Many of them had even boarded the Boeing 747 that was supposed to take off yesterday.

Airline officials apologized to the passengers for the inconvenience caused and asked the Hong Kong residents among them to return home. Non-local passengers were put up in hotels and those in need to fly urgently to London accommodated on other airlines' flights.

Oasis paid HK$500 each to some passengers, too. It also promised to provide coupons they could use for free flights in future.

Despite the setback, Oasis Chairman Raymond Lee was confident that the company would get the permission to fly over Russian territory soon.

Lee said: "Despite all paperwork being in order and having received all necessary approvals, the Russian authorities, for unexplained reasons, chose not to allow our planes to fly over their airspace."

"We sincerely regret this delay and the inconvenience caused to passengers. We are in direct talks with the Russian authorities and are doing our utmost to resolve the issue."

Oasis, which promotes itself as the world's first long-haul budget airline, has hired two Boeing 747s.

The news of Oasis's failure to operate the flight hit international headlines. Industry analysts said that under aviation rules all airlines operating on the UK-Hong Kong route had to fly their aircraft over the mainland, Russia and Europe. The SAR government's Civil Aviation Department makes it mandatory for all airlines to get a licence to fly over these territories before their maiden flight.

Originally, Oasis had planned to begin flying to Europe and the USA a year ago, but its application to the aviation department was blocked for several months. Difficulties in sourcing aircraft led to further delays.

In September, Oasis said it would start flying in October and got the air operator's certificate last week, just five days before its first flight.

The certificate was the first to be issued by the Hong Kong government to an inter-continental carrier in 60 years. The last such certificate was given to Cathay Pacific Airways.

Former Dragonair senior manager Stephen Miller set up Oasis in 2005 with the financial backing of Hong Kong investors. Oasis promises to shake up the airline industry by focusing on longer routes.

The company has the backing of Hong Kong investors such as Reverend Raymond Lee, who moved from the ministry to the property sector long ago, and his wife Priscylla. Oasis has plans to fly to and from US cities and European centres such as Berlin and Milan within a few months.

On the London route, the carrier is said to have sparked fierce competition, with Cathay Pacific, British Airways and Virgin Airlines cutting their fares to maintain their share of the market.