Priceline drops fees. Will Orbitz react? - Top Stocks Blog - MSN Money
 
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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

 

I own a very successful travel agency and I undercut the so called discount sites 99% of the time and I charge service fees which my clients are happy to pay.If something goes wrong at the airport I am live 24/7. As I state in my monthly newsletters and tell all of my clients, "ONLY AN  IDIOT WOULD BOOK TRAVEL ONLINE"

Hey chris, evidently you don't travel that much.. there are, in fact, lots of discounts out there... just do the work yourself.... book it yourself... online.

also, the AIRCRAFT business is very healthy... the AIRLINE business is not.

A third point... I highly recommend flying Southwest Airline anytime possible. The only *** anyone could have was their cattle-call boarding... and they are fixing that.

Air travel is damaging to our environment.  Low airfares contribute to the problem.  The more people fly, the worse it is going to get.  How about increasing the cost of fares as a deterrent, reducing the number of people traveling and tax the airlines the excess charges to pay the cost of offseting their carbon emmissions.  Let's stop being selfish about wanting low airfares for our own pleasures and instead be responsible, and think  about the damage we're causing for our children each time we fly and pollute the skies.

Yes you can go directly to the airline website and save the $5 fee. However not all the airlines will fly to the places that you want to go. Online agents are helpful in finding your destination for the best price using combination of airline connections. You can do it yourself or asking a live travel agent to do it for you, but it takes time. The fees they are charging are very negligible comparing to the price of the ticket and add on charge. The high price of tickets is not because of the agents. They are trying to make a living helping you!

I think Priceline’s action is a good competition for the line of business practice!

Does anyone know about cfares.com?  It says if you pay $50 a year you will get wholesale airfare flights.  Has anyone used them?  

I hope pricelines perks kick all those other crooks where it hurt. I am a frequent flyer and my opinion on the whole matter is maybe this might start a chain reaction and cause all the other companys to respect and accommadate the customer. They charge an arm and a leg to get a flight then they dont even offer you food anymore there throw u a bag a nuts for a four hour flight thanks you jerks

The oil companies are making billions?  LOL!  Thats not what they tell you!  All American companies use FARMER MATH these days, heres how it works:  You make a prediction on how much your going to make this quarter, then yopu come in under your own prediction, and whammo...........you lost, hehehehehehe sneaky aren't we!  EXAMPLE:  I will predict a profit for my company of 100 Million this quarter, the wall street fellows will divide this by the number of outstanding shares, bid the price up accordingly, and then I report a profit/er......loss of 20 million, because I only made 80 Million, and your the fools!

THE PRICES ARE TO HIGH. YOU FIGHT TO GET THE TICKET AND THE 5 AND 7 DOLLARS HURT ANYONE WHO WANT TO FLIGHT. MUCH  PEOPLE THAT WANT TO FLIGHT DO NOT BECAUSE OF THE HIGH PRICES

if you are traveling internationally check www.bt-store.com (no, i dont work for them, ive just been able to save hundreds). I bought a ticket to China for 700 dollars, instead of the 1,200 posted on other travel websites.

Why don't you all try ConCareTravel.com there are no agent fees there! Have found some good deals.

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