Chairman tells of how the noose tightened

PUBLISHED : Thursday, 10 April, 2008, 12:00am
UPDATED : Thursday, 10 April, 2008, 12:00am

Last night, this open letter was issued by the chairman of Oasis Hong Kong Airlines, the Reverend Raymond Lee Cho-min and his wife, Priscilla, in response to the collapse of the budget carrier. It read:

'It is with extreme sadness in our hearts that we announced to you today that Oasis Hong Kong Airlines has just applied to the court and the court has appointed KPMG as our provisional liquidator. It is our wish and goal that during this period when our company's assets are being preserved and our debts are being restructured that the right financial/strategic 'white knight' will come along to bring this company to new heights in the very near future.

What saddened our hearts the most is that we are letting down the many precious passengers from Hong Kong and from around the world, the many co-workers and partners that we deeply love and cherish, and without whom we would never have been here in the first place. We are deeply sorry for the difficulties and grief that this event has caused many. One thing we want to assure you is that all of us have done our very best and have exhausted every possible option under the sun before we came to this most difficult decision and action of our lives.

When this airline began, [chief executive] Stephen Miller's business plan was based on aircraft rental, and not aircraft purchase. The original business plan required only US$25 million to achieve profitability. However, during our ATLA licence application process, as we faced opposition from our competitors for almost six months, our rental aircraft were then snatched away by other competition, and we have had to purchase aircraft instead of renting them. This placed a huge strain on the group's financial resources.

In the following months, the hike of the oil prices has also affected us severely. As a newly started airline, we have found it next to impossible to obtain a credit facility from financial institutions to carry out fuel-hedging programmes. We only managed to hedge once successfully. As oil prices sharply increased, the fuel costs took up the majority of our budget. Just in the last two weeks, at least four airlines around the world have made announcements to stop trading or shut down completely due to huge oil price hikes and [the] difficult financial climate.

On top of all this, we also faced relentless competitive response from every direction, aiming to crush us for good. And only until very recently, we have had great difficulty recruiting top local aviation talent to join us, and we have had to go to great lengths to hunt for the right personnel we need from all around the world.

We dearly love Hong Kong and are proud to be members of the Hong Kong family. It has been and will continue to be our wish and prayer that all 7 million Hong Kong people can go and see the world and that the world's travellers are brought to Hong Kong in huge numbers. Therefore, we seek your help, support and prayers that the right 'white knight' comes forward soon during this critical period to put this airline back to full strength for the good of all of Hong Kong and to take it to higher heights.

Again, please accept our deepest apologies for the inconvenience and trouble that this halt in our service has caused you and your loved ones.'