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Table: Engine Trouble


At first blush, the Orbitz IPO seems likely to benefit from the success of Expedia and other online travel players. But Orbitz is losing money. A look at where it gets its revenues tells the story:

AGENCY FEES AND COMMISSIONS

Orbitz' IPO filing shows that the per-ticket fees it gets from

airlines will fall in coming years. Orbitz hopes to make that

up with new businesses, such as running Web sites for airlines.

ORBITZ: 72%, EXPEDIA: 45%

RESERVATION FEES FROM CONSUMERS

In December, Orbitz added a minimum $5-per-ticket fee on air

travel, up to $10 per reservation. The fees often make tickets

from Orbitz more expensive than those from Expedia, undercut-

ting the marketing message that it is the low-cost travel site.

ORBITZ: 19, EXPEDIA: 0

MERCHANT BUSINESS

Expedia makes most of its money by buying hotel rooms and

vacation packages at a bulk rate and reselling them at a

higher price, leading to much higher profits. Orbitz hasn't

gotten into this part of the business yet.

ORBITZ: 0, EXPEDIA: 50

Figures are the percent of revenues in the first quarter of 2002

Data: Securities & Exchange Commission filings


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