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Technology Stocks : IFLY - travel sales on the web pure play -- Ignore unavailable to you. Want to Upgrade?

To: chirodoc who wrote (225)	4/12/1998 9:07:00 PM
From: Rock	Read Replies (1) \| Respond to of 4761

IFLY has a lot of growth potential. The difficulty to overcome is to be able to manage that growth. According to the SEC filing, the company has problems answering all the calls that come to their reservations centers. Currently, the company can only handle 1/3 of all the incoming calls. The company is currently adding reservation agents to answer more calls. Their Turbo Sabre system is also customized so that their agents can operate with minimal training and experience. Because the agents learn skills that are not easy to transfer to other jobs, the turnover rate is very low. I believe that if the company can solve this staffing problem, sales could easily triple. Again, the following tidbit is taken from the SEC filing. GROWTH STRATEGY The Company has a three-point growth strategy: - Internal Growth. The Company's Tampa and San Diego reservation centers are currently operating at less than maximum capacity because the Company can add up to 40 reservation agents a month while maintaining the quality of its customer service and operating efficiencies. Consequently, of the 12,500 calls per day (including repeat calls from callers unable to be serviced) the Company estimates it receives on average at both reservation centers, the Company's approximately 140 reservation agents currently can answer only an average of approximately 4,800 calls. As a result, the Company believes it can grow substantially over the next twenty-four months as it adds additional personnel. The Company's Tampa and the San Diego facilities can accommodate a combined total of 1,560 reservation agents working in staggered shifts, or 520 working at any one time. The Company believes that it can achieve substantial growth by increasing the number of its reservation agents and consequently increasing its capacity to process the existing demand by potential customers who call its toll-free numbers daily. Repeat Customers The Company believes that repeat customers are key to its ability to grow. The Company's "1-800-LOW-AIR-FARE" (1-800-569-2473) number has a rate of repeat customers (meaning customers who purchase at least one more ticket within a year) of approximately 38%, and the Company's "1-800-FLY-4-LESS" (1-800-359-4537) number has a repeat customer rate of approximately 50%. The Company believes that while customers are initially attracted by the low-priced airfares made available by the Company, they become repeat customers because of their satisfaction not only with the prices but also the convenience of being able to book their reservations on one relatively brief toll-free telephone call. The Company believes that it can generate internal growth by obtaining an even larger portion of the travel business of its existing customers and consequently increasing its repeat customer business. State-of-the-Art Technology The Company uses state-of-the-art computer technology available to access all the major U.S. and international air carriers' routes and fares. Each of the Company's reservation agents operates a SABRE computer terminal and headset. The Company has significantly customized the Turbo SABRE system specifically for the Company's specific purposes and uses. As a result, the Company's reservation agents have fewer procedures to master and therefore are trained and become proficient on the Company's reservation system more quickly, thus incurring lower training expenses. In addition, the skills learned by the reservation agents on the Company's Turbo SABRE system are not transferable to other travel agencies, resulting in lower reservation agent turnover.