Money-losing 800 Travel Systems Inc. has sought protection in bankruptcy court, saying it hasn't been able to bounce back from the impact of September's terrorist attacks.
The Tampa travel company, which burst onto the public market at the height of dot-com mania, closed a reservation center, slashed its work force and hired a new leader after Sept. 11, but that wasn't enough to spare it from cash-flow problems.
"We are committed and determined to complete the reorganization as quickly and as smoothly as possible," said Robert Morgan, who became president and chief executive of 800 Travel in late September.
But the company, which sold discounted air fares and vacation packages through toll-free phone lines and three Web sites, is fighting an uphill battle.
Although airline traffic is recovering slowly, it still is down about 11 percent from a year ago. The major airlines have eliminated commissions, which, along with service fees, were a chief source of revenue. And powerful online competitors such as Expedia, Orbitz and Travelocity are backed by deep-pocket players who can market their sites and weather the hard times.
None of 800 Travel's Web sites _ www.lowairfare.com, www.fly4less.com and www.vuela.com. _ appear on Jupiter Media Metrix's most recent list of the top 30 travel sites on the Internet. That doesn't surprise Morgan, who said the interactive features that made the sites distinctive have been shelved temporarily while the company regroups.
"It's a cost consideration," Morgan said. "We'd rather have those people answering phones."
800 Travel, which operates out of a former grocery store on Gunn Highway, went public at $5 per share in 1998, raising $7.1-million. It promised callers cheap air fares on its 800-lines and instant messaging with live agents on its Web sites.
Long before September, the company was reporting losses and scraping for money. Its stock, which had traded at more than $16 in 1998, tumbled to less than $1 in 2000. It closed Friday at 10 cents, down 15 cents.
After nearly $1-million in losses in the quarter ended June 30, the company initiated a $1.6-million cost-cutting program. After Sept. 11, it closed a reservation center in San Diego and cut its work force from 350. The company now has 210 workers, all in Tampa.
By the end of September, the last reported financials, the company said it had lost $2.1-million, or 26 cents a share, on sales of $3.5-million.
In early January, 800 Travel received a $500,000 infusion of cash from an unidentified supplier. That was not enough to keep the company solvent.
But Morgan, former chief financial officer of Ace Auto Parts Inc. of Largo, said he was optimistic that the company's call volume and "intellectual property" would help it obtain the money it needs to reorganize.
He said the company continues to receive up to 5,000 calls per day on its 800-LOW-AIRFARE and 800-FLY-4-LESS phone lines. Of those callers, 10 to 15 percent purchase tickets, Morgan said.
_ Information from Times files was used in this report. Kris Hundley can be reached at hundleysptimes.com or (727)892-2996.