Airline-backed ticketing Web site delays launch until next June

Orbitz, the controversial online ticketing Web site funded by the five largest U.S. airlines, promised a summer launch and will stay true to its word - but now the new venture is targeting next summer for fully revving up its booking operations, not this one.

Chicago-based Orbitz today announced that its Web site is now scheduled to be fully functional by next June, following a testing period that's due to start in February and be expanded in April. The June 2001 go-live date is nearly a year later than the company's original launch projections.

Jeffrey Katz, president, chairman and CEO of Orbitz, is due to hold a press conference this afternoon to discuss the reasons for delaying the launch of the ticketing site. But in a statement included with today's announcement, Katz said the size of the undertaking required a longer development schedule.

"A phased-in launch that includes a monster beta test will ensure that Orbitz can handle the transaction volume and deliver the reliability and service levels [that] consumers deserve," Katz said. Orbitz plans to have at least 100,000 people try out the Web site during the four-month testing phase, he added.

Under the new schedule, the Orbitz site will provide free access to its airfare search engine starting next month, although users won't be able to book flights through the site. Beta testers are supposed to be able to start doing that in February, and Orbitz said car, hotel, cruise and vacation packages will be added for testing purposes next April.

If all goes well with the Web site's features, functionality and customer service capabilities, Orbitz said, the full launch will follow two months later, along with the start of a widespread marketing campaign aimed at attracting users to the site.

Funded by UAL Corp.'s United Air Lines Inc., AMR Corp.'s American Airlines Inc., Delta Air Lines Inc., Continental Airlines Inc. and Northwest Airlines Inc., Orbitz has claimed that the new search engine and booking system it's developing will enable its site to offer the lowest available airfares at all times. "We're expecting an incredible amount of stress on this system, and we want to make sure everything works," Orbitz spokeswoman Carol Jouzaitis said today.

But Lorraine Sileo, an analyst at online travel research firm PhoCusWright Inc. in Sherman, Conn., said the delayed start means Orbitz will miss a business cycle in which the online travel market is expected to nearly double from $12 billion in annual sales to $20 billion.

Sileo added that launching the ticketing site in such a phased rollout also "could be a turn-off" to potential users, especially early visitors who find low fares through the search engine but then can't book flights. "It's going to take some heavy-duty marketing to get those folks to come back," she said.

Henry Harteveldt, a senior analyst at Forrester Research Inc. in Cambridge, Mass., said Orbitz plans to spend $100 million per year in marketing to promote the Web site once it does launch - an amount that he described as "astounding." But while Harteveldt applauded the company's desire to work all the bugs out of its system, he called the new launch date "overly conservative." Orbitz likely could move the full launch up to March if it hired an outside consulting firm to stress-test the site instead of relying on the beta-testing program, he said.

Because of its airline owners, Orbitz has attracted considerable opposition from two groups of travel agents and from other online travel companies that contend the new site will stifle competition. Complaints from the company's opponents have resulted in antitrust-related investigations of Orbitz by the U.S. departments of Justice and Transportation as well as the U.S. Senate's Commerce Committee (see story).

In today's announcement, Orbitz also confirmed that it won't be an air-only ticketing venture. The company said it has signed agreements for booking rental cars and cruises with Advantage Rent-A-Car Inc. in San Antonio, The Hertz Corp. in Park Ridge, N.J., and National Leisure Group. in Woburn, Mass.

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