The Business
A small Las Vegas airline offering sightseeing tours of the Grand Canyon. Almost all its customers are foreign tourists, so the company markets its services to international travel wholesalers that include the tours in their travel packages. Sightseeing trips over the Big Ditch make up almost all the company's revenues, with four to seven planes flying at any given time. The owner wants to escape the day-to-day bureaucracy of running the airline.

Financial Summary 1991 1992 1993
Gross revenues $2,700,000 $2,900,000 $2,700,000

Recast earnings before $8,000 $120,000 $110,000

depreciation, interest, and taxes *estimated

Price $2 million to $3 million

Outlook There's no shortage of tourists eager to ooh and aah over the renowned ravine. Grand Canyon attendance went up more than 9% from 1992 to 1993. Vegas packs 'em in, too: visitor figures have grown an average of 4.4% a year since 1987, and more of those vacationers are coming from abroad (until the U.S. dollar's value climbs, anyway). But there's no shortage of competition, either: more than 40 operations are authorized to fly over the canyon, and fare wars are common. To preserve the natural tranquillity of the canyon, in 1987 Congress designated flight-free zones. Even so, the number of canyon flights has roughly doubled since the act was passed, prompting a new federal task force to investigate further limits on noise. Most insiders consider a total ban on air tours unlikely, but some big-name players (Secretary of the Interior Bruce Babbitt, for one) want further restrictions.

Price Rationale Set aside for the moment the value of the four planes owned by the seller. For the earnings to represent a decent return on investment -- say, 20% to 25% -- the selling price would have to drop to about $500,000, experts say. But you'd still need aircraft. The owner's planes should cost around $140,000 each, which would put the price just over $1 million. Or you could try to find favorable leasing terms, a route insiders deem likely.

Pros How many people get views this spectacular during their daily commute? And when you weren't skirting the South Rim, you'd be jetting all over the world, plying your wares at international travel shows.

Cons The expected price here is . . . ambitious. Competition is heated, and the noise hullabaloo may mean yet more red tape. Do you really want your business's future to be subject to the political whims of Congress? -- Christopher Caggiano

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Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Geneva Business Brokers, in Irvine, Calif., 800-854-4643.