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Priceline drops fees. Will Orbitz react?

Posted Nov 06 2007, 03:49 PM by Kim Peterson
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Photo credit: Airfare-news.com Priceline is permanently cutting its airline ticket booking fees, a move analysts say could hurt Orbitz the most. Investors seem to agree: Priceline shares barely moved today, while Orbitz shares plunged 14%.

Note that the fee cut only applies to published prices, and not the name-your-own-price service that Priceline is famous for. 

Citi analyst Mark Mahaney thinks this is a big score for Priceline that will give it a competitive advantage until others do the same. The cut, he says, is "a new negative overhang for the financial health of the online travel agent industry."

If other sites charge fees of $5 to $7 per ticket, as a Stifel Nicolaus analyst estimates, then cutting them could potentially be disastrous. Priceline eliminated its $5 domestic booking fee in June on a trial basis, and clearly must think it can withstand the revenue loss from a permanent cut. The company will announce third quarter earnings on Thursday.

Maybe Priceline is encouraged by its stock run-up over the last year, from $40 a year ago to nearly $89.

The ball is in your court, Orbitz, Expedia and Travelocity!  But whatever you decide to do, can you do it soon? I haven't booked my Christmas flight yet!

Comments

 

never trust email booking

wow  their are no deal with internet booking ,  book with a travel agent they will

find you lower fares

Just a general gripe about airlines.....My son is Military and he got a whopping $9 military DISCOUNT off of a $1000 ticket from Northwest to come home this past summer. He didnt even get a discount on his flight home for this Christmas. But they get people anyways  cuz you cant walk from Hawaii to Ohio

The service charge is meaningless when the seat prices often fluctuate by the minute based on supply and demand, and this ultimately is controlled by the airlines. Ask your seat neighbor what they paid for their ticket sometime...

i work in the aircraft industry and airlines are like oil companies....they tell you they don't make any money but in reality they are making billions.....

I search these sites to price and find available flight times.  I often book with Cheaptickets.com, but also go straight to the airline.  Most times, they are just as low as anywhere else.

I've tried Priceline but it was no good for me. I even tried the bidding thing and wouldn't work for me either. Treid HOTWIRE, It was awful. Lost money on a hotel that was 3-4 stars, after I paid I found out what hotel. went to several sites to get reviews, one reviewer said the hotel wouldn't be a 1 star in their book. It had many bad reviews. I figured out how Hotwire gets the cheap rates it gets them from hotels that can't rent out the rooms the normal way. Expensive lesson, No refunds no matter what. I asume priceline is the same way with their bidding site. I'll pay a bit more so as to get a refund if I'm dumped into a dive. But than I have a choice on the other sites, I can review the hotels b4 hand. I also use the no fee hotel sites and airline and cruise sites. All about the same price, But if you go through the airline sites you get miles even if you don't ride the plane!

So Priceline is not going to charge you a booking fee!  Big deal.  Because when you are traveling and have trouble, the main street travel agent gets your call to try to help you.  Sometimes they can and sometimes they can't, however, you expect to buy on Priceline and then go to the retail travel agency for help!  What a deal!  

Incidentally, how do you have the nerve?

We are all victims of our on consumer greed. Consume everything up and cry when it's gone. Do yourselves a favor and look up the meaning of consumer and ask youreslves if you are proud to be one. As far as  people like  with their get a life statement over the five dollar discount why  are they looking to get a discount anyway Mr. Bigtime? I used to love flying but it is almost like a Greyhound bus with wings  now anyway.Everyone loves to complain but hardly anyone will put forth the effort to cause change.Part of the problem or the solution? Not inconcievable that a million people could book at the five dollar discount. Anyone have a calculator?

the airline industries are going broke because all the monies they earn is going to the corporate officers who are grossly overpaid. they steep the government to pull them out of their financial woes when their CEOs are wearing hand tailored suits and driving the big limos.  its those payrolls that keep the airlines from being able to do good business and partnering with other airlines to save you, the consumer, money and still make great schedules!

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