Orbitz 2009 Annual Report Download - page 13

If in the future, we require more liquidity than is available to us under our revolving credit facility, we
cannot be certain that funding would be available to us at all or on attractive or acceptable terms. If funding is
not available when needed, or is available only on unfavorable terms, we may be unable to take advantage of
potential business opportunities or respond to competitive pressures, which in turn could have a material
adverse impact on our results of operations and liquidity.
Our business and results of operations could be adversely affected if the financial condition of one or more
of our major suppliers, including airlines and car rental companies, deteriorates or restructures its
operations.
In the past several years, several major U.S. airlines have either filed for bankruptcy protection under the
United States Bankruptcy Code, recently exited bankruptcy or discussed publicly the risks of bankruptcy. In
addition, the economic downturn has severely impacted the automobile industry, including car rental compa-
nies, as illustrated by the Chapter 11 bankruptcy filing by Advantage Rent A Car in December 2008.
We depend on a relatively small number of airlines for a significant portion of our net revenue. In
addition, although the net revenue we generate from car rental reservations is significantly smaller than our net
revenue from air transactions, our car net revenues are derived from a relatively small number of car rental
companies. As a result of this dependence, our business and results of operations could be adversely affected
if the financial condition of one or more of the major airlines or car rental companies were to deteriorate or in
the event of supplier consolidation in either of these industries. Potential bankruptcies and consolidation in our
suppliers’ industries could result in capacity reductions and increased prices, which may in turn have a
negative impact on demand for travel products.
The travel industry is highly competitive, and we may not be able to effectively compete in the future.
We operate in the highly competitive travel industry. Our success depends, in large part, upon our ability
to compete effectively against numerous competitors, including other online travel companies, meta-search
companies, travel research companies, suppliers and online Internet companies, several of which have
significantly greater financial, marketing, personnel and other resources than we have. Factors affecting our
competitive success include price, availability of travel products, ability to package travel products across
multiple suppliers, brand recognition, customer service and customer care, service fees, ease of use,
accessibility and reliability. If we are not able to compete effectively against our competitors, our business and
results of operations may be adversely affected.
In particular, our results of operations would be negatively impacted if competitive dynamics in the
industry caused us to reduce or eliminate the service fees we charge our customers. We charge a service fee
on many of our websites, and in exchange, provide our customers the ability to book their travel reservation
and access to various services, including our OrbitzTLC customer care platform and Orbitz Price Assurance.
During 2008, certain online travel companies reduced or eliminated booking fees on retail airline tickets and
hotel rooms, which has created uncertainty around the sustainability of booking fees. In addition, suppliers
have increasingly focused on distributing their products through their own websites, which typically do not
charge a booking or service fee, and search and meta-search sites are growing in popularity and may drive
more traffic directly to the websites of suppliers or competitors that charge lower or no fees. Although some
of our primary competitors also charge booking or service fees, we believe our business and results of
operations would be more adversely impacted, relative to certain of our competitors, if competitive dynamics
caused us to reduce or eliminate these fees. If, as a result of the limitations contained in our GDS service
agreement or otherwise, we are unable to implement certain changes to our business in an effort to absorb the
impact of the reduction or elimination of these fees or are unable to increase revenue from other sources, our
business, financial condition and results of operations would suffer.
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