HONG KONG - BANKRUPT budget carrier Oasis Hong Kong Airlines missed a deadline for securing a buyer or investor and is now forced to lay off most of its staff, its court-appointed liquidators said on Friday, cooling speculation the firm had been targeted by several major corporations.

Liquidators KPMG told reporters that about 700 people would be fired, including pilots and cabin crew, after receiving no firm investment proposals ahead of a deadline this week.

KPMG executives said negotiations were continuing about possible investments but the airline would not fly again in its current corporate form. They added that the situation was not yet clear for laid-off employees.

We're working with the labour department and they are assisting the employees, helping them file their claims,' said Edward Middleton, KPMG's head of restructuring services.

Oasis went under this month, halting flights and going abruptly into liquidation after underestimating operation costs, as jet fuel prices soared to record highs.

Rumours swirled that Li Ka-shing's property flagship, Cheung Kong , and Cathay Pacific were interested in the embattled carrier, although they denied the speculation.

Other potential suitors mentioned by the media included Hainan Airlines, China's No. 4 carrier and partially controlled by billionaire George Soros, and Richard Li, chairman of fixed-line telecoms carrier PCCW and Li Ka-shing's son.

Oasis, which began flights in October 2006, had accumulated losses of about HK$1 billion (S$173 million) during two years of operation.

Its decision to pull the plug on operations out of Asia's third-busiest airport raised fresh questions about the viability of budget airlines, which are struggling with rapidly rising costs and facing a potential slowdown in demand as world economic growth cools.

It was not clear how much the unlisted airline, which flies just four jets, would be worth to a buyer.