Orbitz follows Expedia and Priceline in suspending booking fees

www.orbitz.com

On Tuesday, Orbitz suspended the fees it normally charges on air travel bookings, ratcheting up the pricing war among online agencies that started a few weeks ago.

In March, Expedia announced the cancellation of booking fees on flights in a promotion extending through 31 May. It was following the lead of Priceline, which gained market share by discontinuing air travel booking fees a couple of years ago.

After Expedia made its announcement, Travelocity, which is a subsidiary of Sabre Holdings, cancelled air booking fees through the end of May.

“We view the suspension of air booking fees at Orbitz as a competitive response designed to stem market share losses, and we believe the move is unlikely to benefit Orbitz given the financial importance of booking fees at the company,” said George Askew, an analyst with Stifel Nicolaus & Co.

The analyst estimated that the air booking fees constitute as much as 10 percent of total revenue for Orbitz and the Chicago-based company stands to lose as much as $12 million in revenue by dropping the fees.

Orbitz chief executive Barney Harford would not provide financial details about the company’s revenue generated by booking fees, but said that first-quarter results would be released soon.

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www.orbitz.com