Thursday, April 2, 2009

Orbitz May Be Close to Booking-Fee Decision

Orbitz Worldwide President and CEO Barney Harford told participants at the TravelCom conference in Atlanta yesterday that the company didn't want to be rushed into a decision about booking fees and was still evaluating the situation. "Stay tuned," Harford said.

I'm hearing from a non-Orbitz insider that some kind of Orbitz announcement, in the wake of Expedia and Travelocity killing booking fees on flights, had been imminent yesterday, but didn't materialize.

Orbitz's fence-sitting and condundrum is so pronounced, I'm told, that in its deal-making overtures with at least one metasearch company, Orbitz's proposals include one with booking fees and one without.

What would it mean if it filed for Chapter 11 bankruptcy protection, reorganized, and dropped booking fees? That could be one radical option being mulled, although I have no idea how seriously that might be being vetted. That wouldn't be a very pleasant option as far as building consumer trust, but Orbitz, reliant on the booking fees, is in a very tight spot.

Orbitz is loaded down with debt, dependent on booking fees, and locked into disadvantageous agreements with Big Brother Travelport.

There has even been some speculation about some kind of Orbitz-Kayak combination, which doesn't make much sense to me.

Meanwhile, Orbitz, the exclusive online travel agency participating in Kayak, would be hard-pressed to compensate Kayak, which gets a chunk of revenue from Orbitz, if Orbitz decides to toss its booking fees.

Kayak CEO Steve Hafner indeed predicts that Orbitz has no choice but to drop booking fees.

I think we will be hearing something on this front soon.

No rush, Barney, but we are awaiting your next move.

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