Orbitz.com charging fees for airline tickets

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By Todd R. Weiss

(IDG) -- Online travel vendor Orbitz.com has for the first time begun charging a service fee to customers buying airline tickets from its Web site.

In an announcement posted on its site this weekend, the company said it will charge $5 for each airline ticket ordered online, with a cap of $10 for up to four tickets. The fees won't apply to hotel, rental car or other accommodations, according to Chicago-based Orbitz.

Roland Jacobs, the company's chief marketing officer, said Monday that Orbitz began its operations this past summer without a fee to "build a customer base" in a competitive market. But research has shown that even with small fees, customers would be willing to use Orbitz.com, he said, because of overall ticket savings.

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The new fees, which went into effect at 12:01 a.m. Saturday morning, will be waived through January 14 the first time a customer uses the site, Jacobs said.

Airfare searches using the Orbitz Web site will continue to be free. Only actual ticket purchases will incur a fee.

Competitor Travelocity.com LP doesn't charge a ticketing fee, though two airlines, Northwest Airlines Corp. and KLM Royal Dutch Airlines, each charge a $10 per-ticket fee, according to a spokeswoman. The other major online travel site, Expedia Inc.'s Expedia.com, doesn't charge a fee for airline tickets purchased online.

Priceline.com charges a $5.99 processing fee for each airline ticket order, which includes up to eight tickets on the same itinerary. And Trip.com charges a $10 fee for each airline ticket, plus a separate $5 fee if a customer wants an electronic ticket for the flight.

Analysts say the Orbitz fee was probably inevitable in an industry hit hard by the economy and the recent terrorism in the U.S.

"It's probably a matter of survival, actually," said Carol Baroudi, owner of Baroudi and Associates in Arlington, Massachusetts. She said she wasn't surprised by the announcement because when Orbitz was launched last June, it was an open question whether it could be profitable giving its services away, she said.

Kate Rice, an independent travel analyst in New York, said the fees won't deter ticket sales because they are reasonable.

"I think consumers will pay those fees because we all pay $1.50 to take our money out of the bank" at ATM machines," Rice said. Marketing online tickets, selling them and shipping them to consumers is expensive to do, and Orbitz "is just now learning that lesson," she said.

Orbitz was launched in June by Delta Air Lines Inc., Continental Airlines Inc., Northwest Airlines, United Air Lines Inc. and American Airlines Inc. and is supported by 450 other U.S. and international carriers.