Study examines fee effect on Orbitz `advantage`

Has Orbitz`s $5 service fee on airline tickets reduced its competitive advantage?
According to results from a Thomas Weisel Partners Internet study conducted with Farechase`s MarketView software, the answer is yes… and no.


It`s “yes” if you compare the Orbitz airfare pricing with that of airline sites and it`s “no” if you gauge the Orbitz pricing relative to Travelocity.com and Expedia only.


Analyzing 20 city pairs, the survey measured pricing on Orbitz, Travelocity.com, Expedia and 10 airline sites for Jan. 11 to 13 (weekend fares), Feb. 15 to 18 (holiday weekend), and Feb. 16 to 23 (school vacation).


Without the Orbitz service fee, Orbitz prices were the lowest fares—or tied for the lowest fares—in 73% of the searches. But, that dropped to 56% when the service fees were added.


The Chicago-based, airline-owned site, however, did significantly better when its fares were measured against those on Travelocity and Expedia only.

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In that match-up, taking the $5 service fee into account, Orbitz had the lowest fare or matched the lowest fare 77% of the time, the study found.


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