Published April 30, 2009

Flying club for the rich folds up

Businessman Nicklaus D'Cruz says membership sales dried up after downturn set in

By VEN SREENIVASAN

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(SINGAPORE) An ambitious plan to start up an exclusive flying club for the well-heeled at Seletar Airport has become a victim of the financial crisis.

'We got hit by the financial tsunami and ended up fighting a losing battle through much of last year and into this year.' - Mr D'Cruz

Businessman Nicklaus D'Cruz has folded up his venture, The Flying Club, barely a year after he launched it.

'This is a very sad time for me,' said the entrepreneur who made much of his money in the golf business. 'I've personally sunk more than $3 million into this project, and now it's all gone.'

He blamed the failure on the economic slowdown and credit crunch, which saw membership recruitments dry up.

'We got hit by the financial tsunami and ended up fighting a losing battle through much of last year and into this year,' he said. 'Membership sales just dried up.'

Mr D'Cruz is not the only casualty.

The 51 members who coughed up between $21,000 and $35,000 each - for a total of $1.1 million - to join the club are unlikely to recover any of their money.

Meanwhile, Australian MRO specialist AirFlight has packed up and left. Perth-based AirFlight has also taken possession of four new Cessna planes - two 172 Skyhawks and two 206 Stationairs, totalling US$4 million - which it sold The Flying Club.

The Flying Club started out with great promise early last year, leasing two acres of land at Senai Airport in Johor and hangar space at Seletar for its exclusive club.

To stand out from the other flying clubs around the region, Mr D'Cruz purchased brand new 4-seater and 6-seater planes, built exclusive lounges for his members and charged just S$500 per hour of flight.

'Our value proposition was to set the highest standards in both safety, quality of training and luxury,' he said. 'I wanted safe, new planes, where others were using 30 or 40-year-old aircraft. I paid extra for cabin airconditioning, and wanted to build nice clubhouses for my members. But the luxury market simply seized up.'

He is now bracing for a potential firestorm of complaints and legal action. 'I've mortgaged my home and now have to deal with the banks which financed me.'

He said that he would now concentrate on his core golf business, Organization of Asian Amateur Golfer or OAAG, which is doing very well.

But all may not be lost.

'I am talking to two interested parties, one from Malaysia and the other from Indonesia, to take over the business,' he revealed. 'I may not get a penny back, but I am still hopeful that someone with deep pockets will take over the assets and business, and run it until things get better. That's the least I can do for my members.'

Members may be disappointed but not all are angry.

'After listening to his explanation, as a businessman myself I can sympathise with the club's situation,' said member Peter Tai. 'In this economic downturn, no one is spared. It will be a different story if business climate was good and The Flying Club is the only one not delivering on their plans.

'If it's due to fraud or gross mismanagement of club funds then we will have a case. So from a purely economic point of view, I now understand his situation and feel one should not kick a man when he is down. After all, he has lost more personal money than what I have invested. So live and let live.'

Mr D'Cruz must be hoping most of his 51 members are as understanding.