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."
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