IPO planned for
The Honolulu-based discounterBy Russ Lynch
reports it sold 963,000
airline tickets last year
Honolulu-based air travel discounter Cheap Tickets Inc. is planning to go public with an issue of shares that it hopes will raise as much as $50 million on the Nasdaq National Market.
The company, which has been selling airline tickets since 1986, has filed a registration statement with the Securities & Exchange Commission for an initial public offering of shares.
Founded and headed by former airline executive Michael J. Hartley and his wife Sandra, Cheap Tickets sold 963,000 airline tickets last year, according to the SEC filing.
In addition to call centers and retail outlets in Hawaii and on the mainland, the company has found a niche on the Internet.
The SEC document says that last year Cheap Tickets sold 97,000 tickets, worth $25 million, through its Web site, www.cheaptickets.com. The company said it has more than 400,000 users registered to use the Web site to make bookings.
"Increasingly, the Internet has become an attractive method to sell travel tickets directly to the public," Cheap Tickets said. Travel is the second-largest category of online retailing and worldwide online bookings are expected to grow to $10.6 billion a year by 2003, the company's filing said.
The company's total bookings grew from $92 million in 1995 to $112 million in the first nine months of 1998, according to the financial disclosure. For that period, the company reported a net profit of $1.5 million vs. a loss of nearly $111,000 for the same period of 1997.
While most of its business is airline tickets, Cheap Tickets has recently expanded by offering bookings for cruise ships, hotel rooms and rental cars.
The Hartleys own 93 percent of the business and expect to keep a majority interest after the stock issue, according to their disclosure. Some existing company investors will get $4.8 million of the IPO funds as well, as Cheap Tickets plans to redeem outstanding preferred stock.
The underwriters will be the firms of William Blair & Co. and Dain Rauscher Wessels. The stock would trade under the symbol CTIX, the filing said.
Hartley, Cheap Ticket's chief executive, chairman and president, was involved in two airlines that got into the mainland-Hawaii business in the 1980s but failed to survive in the competitive market.
Bloomberg News contributed to this story.