Saturday, July 09, 2005

FlightPointe - airCharter Reservation System



EXECUTIVE SUMMARY
* Overview
FlightPointe (the ‘Company’) provides reservation and inventory management solutions for the private aviation community serving both brokers and operators. The private ‘airCharter Reservation System’ (aCRS), FlightPointe’s proprietary web services solution, enables Private Aircraft Brokers (the ‘Broker’) and Private Aircraft Operators (the ‘Operator’) to accurately assess aircraft availability in real-time to meet the on-demand needs of their clientele. The aCRS infrastructure conforms to OpenTravel™Alliance (OTA) standards, for future integration of the Global Distribution System, such as real-time booking for ultra luxury hotels/resorts, villas and island resorts, in-flight catering and limousine service. FlightPointe is positioned to be the leader in real-time private aircraft sourcing, reservation, bill presentment and payment systems for the on-demand, empty-leg and new middle market shared charter.

* What is the market size and competition landscape?
Based on 2002 data of 6 million Global Business Aviation Departures and a FlightPointe assumption of $10,000 (conservative estimate) average costs per charter flight, the projected market for general business aviation is $61.4B; therefore, a Total Global General Aviation Market of $78.2B is projected, including jetliner aircraft charter, with an average annual global growth of 2.6% from year 2004-2015 [Source: IBAC 2004 and FAA Aviation Forecast 2004]. Unlike commercial airline and jetliner charter, only recently has FAR Part 135 charter segments been required by the government to declare revenue and expense data. We have cross-referenced data and have established that an estimated 27.6% of global general business aviation departures represent the charter market, which amounts to a $38.3B projected worldwide market size (including jetliner charter segment). This sector currently lacks a single, dominant, real-time analytics aircraft sourcing and true reservation platform solution provider.

* What is the product/service?
FlightPointe’s Inventory Optimization Management (IOM) system, with integrated Flight Operation Modules (FOM) and airCharter Reservation System (aCRS), is a patentable technology platform and business process web services interface tool for charter operators and brokers. It uses a subscription model for portal, branded and co-branded jet card membership program as well as customized transaction models for a) On-demand Charters, b) Private Air Shuttles & Charter-By-The-Seat-Sale– a flying public-sponsored shared charters, c) Luxury Getaway Shuttles with hotel/resort operator – a travel agency-sponsored shared charters, d) Jetliner Group Charters, e) Jetliner Shuttles with hotel/resort operator – a travel agency-sponsored shared charters, and f) Jetliner Cargo Charters.

* What are the startup costs?
FlightPointe anticipates initially requiring a $500,000 post-seed financing to complete the platform beta prototype with integrated flight operation modules; to provide for legal and infrastructure expenses; and to cultivate potential customers. We intend to seek initial capital from entrepreneurial angels who have an affinity for private aviation, corporate partners, venture capitalists, and private placements. A further investment of $2.0 million is needed for the full operational launch and product enhancement, which will include solidifying relationships with charter operators and the brokerage community, and accelerating global marketing efforts. A total of $2.5 million investment commitment is required.

* What is the payoff?
FlightPointe anticipates breaking-even within 12 months of full operation. In addition to our product sales, we expect some interest revenue from escrow banking for branded and co-branded jet card membership program as well as transaction revenue from non-membership escrow-based payment solution and cooperative marketing and advertising strategies. To fuel further growth and to offer liquidity to investors, we anticipate a sale of the Company to one of the big three Global Distribution Systems organizations or an IPO within 3 to 5 years.

* Management Team
The FlightPointe team currently consists of four professionals;
Elmer Alinsog (Interim CEO/founder), formerly with Hewlett-Packard Lab, Qwest, and was an independent charter broker;

Denise Souraj (Director of Charter Relations and Marketing), a Business Aviation graduate from Embry Riddle Aeronautical University, and formerly from NetJets and Jet Aviation;

Stephen Sjodin (Technology Director), after undergrad studies in biochemistry at the University of Toronto, Stephen moved to the Caribbean island of St. Lucia to manage a helicopter operation. Upon returning to Canada ten years later, Sjodin worked for Intelisys, the maker of Amelia aviation software in New Brunswick before jumping aboard with Innovation Creation, the maker of Barnstormer, a reservation system for the air charter;

Sam Chanana (Director of Sales), after working for Tag Aviation, one of the leaders in the private aviation industry, Sam was able to adapt to the process and contribute to its growth. Through technology and innovation, Sam formed his own company The Air Ally Network, a company dedicated to the private sector of aviation that allows travelers the ability to locate charter operators and brokers as well as share the cost of jet charter by locating local travelers from a single web-portal

* Financial Highlights
The following is a 3-year income projection for FlightPointe, assuming a beta-development period of 6 months. The capital required for the beta stage is $500,000 and the financing required for the venture is $2 million. Sales projection is based on number of internal sales personnel and 5 to 10 times sales projection is attainable by leveraging the brokerage community and travel agencies as our value added resellers.

3 Year Projection (including beta period)
- Investors’ Internal Rate of Return 51% per annum
- After Tax Profit Margin (on revenues) 31%
- Breakeven month 12 months from launch
- First profitable month 6 months from launch

* Net Revenue After Taxes Projection
Year 1: $468,704 - Year 2: $7,213,249 - Year 3: $14,500,817

* Required Investment
$2.5M