Despite a weak economy and a dramatic change in the US fee landscape, online travel agency Orbitz WorldWide posted a second-quarter profit.

Published: 06 Aug 2009

Despite a weak economy and a dramatic change in the US fee landscape, online travel agency Orbitz WorldWide posted a second-quarter profit.

Orbitz said its net profit was $10 million, compared with a year-earlier loss of $5 million. Revenue decreased 19 percent to $188 million, mostly owing to the elimination of the airline booking fees in the US and a drop in hotel-room rates.

“Despite a challenging economic and travel environment, our domestic air transaction growth rate increased by 22 percentage points versus the first quarter 2009, and our dynamic packaging product continued to post strong volume growth as a result of the value we provide to customers who `get it together and save’,” said Barney Harford, president and CEO of Orbitz Worldwide.

In an interview with Reuters, Harford said, “What we’re seeing is a stabilisation in terms of demand. We’re seeing a stabilisation in terms of average daily rates on hotels. But I don’t think we’re seeing any major signs of any kind of uptick.”

Total value of its bookings fell 12 percent on lower air fares and lower average hotel rates. Domestic bookings values decreased 9 percent, while international bookings values fell 27 percent.

The company said operating expenses declined to $166 million from $216 million.

“Orbitz, like many other companies, is reporting increasing profits despite declining revenues as a result of their cost-cutting efforts,” reportedly said Morningstar analyst Warren Miller. “While these measures were necessary to maintain profitability, it is likely that Orbitz has cut costs more than competitors like Expedia, which continually claims to be investing in growth despite the downturn in travel.”