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The Department of Transportation on Friday cleared the June launch of Orbitz, a new online travel site owned by five dominant U.S. airlines. In a statement, the department said it “did not have evidence that would justify stopping the company from beginning operations.” American, Continental, Delta, Northwest and United have together chipped in about $100 million to get the site off the ground. Dozens of smaller airlines, along with several car rental companies, have signed up as “charter associates.” Orbitz is drawing sustained fire from competitors such as Travelocity and Expedia, which charge that Orbitz’s owners are out to monopolize online travel booking. The DOT “reinforced that we do not have exclusive agreements,” said Orbitz CEO Jeff Katz, in a conference call Monday. “We believe that on the merits of the law, it’s very clear that we’re compliant.” Katz said that he expects Orbitz to turn a profit early in 2003, and that over a few years’ time, it would provide 20 to 30 percent of all travel bookings. According an Orbitz spokesperson, 30,000 people have booked tickets through its beta site since February. Katz underscored Orbitz’s policy to operative competitively. Travel partners who sign up as Orbitz charter associates, Katz said, are required to offer Orbitz any and all types of fares they offer to other sites. If, for instance, KLM, one of the new charter associates, struck a deal with Travelocity to offer a low fare, they would be required by their contract to offer the same fare to Orbitz. This does not mean they provide exclusive fares to Orbitz, Katz stressed. The Transportation Department said Orbitz must report back within six months after its official launch, to inform the department of any changes in its “plans and procedures.” The Justice Department is still conducting its own antitrust review of Orbitz.Katz said he didn’t expect to see the DOJs investigation concluded before Orbitz’s June launch — a situation that has made Orbitz’s quest to secure outside investment more difficult. Some state attorneys general are also investigating the company. “The more there are black clouds over one’s regulatory head, the harder it is to raise funds,” said Katz. Separately, the Transportation Department is mulling changes in its rules governing computer reservation systems for airlines. Currently, those rules don’t extend to online travel sites. Copyright � 2001 The Industry Standard

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