Orbitz Plans IPO
The No. 3 U.S. travel site filed with the Securities and Exchange Commission to sell Class A common stock. The sums raised will be used for working capital, general corporate purposes and acquisitions.
Based in Chicago, Orbitz offers airline tickets, lodging, rental cars, cruises and vacation packages. UAL Corp.'s United Airlines, Northwest Airlines, Delta Air Lines, AMR Corp.'s American Airlines and Continental Airlines own Orbitz.
Since its launch last June, Orbitz has quickly climbed the ranks in terms of bookings to stack behind USA Networks Inc.'s Expedia and Sabre Holdings Corp.'s Travelocity.com.
Orbitz last year lost $103.2 million on sales of $43.4 million. It lost $9.2 million in the first quarter and expects more operating losses in the immediate future.
Orbitz's quick rise has been attributed to low-fare tickets offered on its site by the founding airlines. As a result, offline travel agents have filed a class-action lawsuit claiming anti-competitive behavior. The Department of Transportation and the antitrust division of the Department of Justice are also investigating Orbitz.
According to Jupiter Media Metrix, online travel bookings in 2001 were estimated at $24 billion, or 11 percent of the $240 billion spent on travel last year.