Expedia ends air booking and cancellation fees

Expedia Inc., which has been slashing charges along with its rivals to lure budget-conscious travelers, said Wednesday that its online travel Web site Expedia.com is permanently lifting fees for booking flights and for changing or canceling reservations.

Expedia's action is designed to make the Web site more competitive on price with direct travel suppliers, said Stifel Nicolaus & Co. analyst George Askew in a note to investors.

Expedia had already lifted its air booking fees in March as part of a promotion scheduled to run through Sunday. Askew noted that lifting the fee permanently was a "widely anticipated move."

Rival Priceline.com had gained market share from other online travel agencies after canceling its air booking fees about two years ago. After Expedia announced its promotion, Orbitz Worldwide Inc. and Travelocity, a subsidiary of Sabre Holdings Corp., both temporarily lifted their fees as well.

Askew noted that both Expedia and Orbitz have indicated that lifting the air booking fees has helped them gain market share. He predicted that both Orbitz and Travelocity will follow Expedia in making their promotions permanent.

Expedia also ended fees for travelers to change or cancel their hotel, car rental and cruise reservations, as well as for nearly all flight reservations.

"Today we are announcing the next step in Expedia.com's ongoing efforts to provide our travelers the greatest selection, flexibility and value available anywhere in travel," said Expedia.com General Manager Tim MacDonald in a statement.

The company noted that some other online travel providers charge as much as $30 per person to change or cancel flight or hotel reservations.

Following the announcement, Askew maintained a "Hold" rating on the stock.

Expedia shares lost 18 cents to $15.77 in afternoon trading.