Orbitz 2009 Annual Report Download - page 50

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the year ended December 31, 2006. The remaining increase in net revenue from air bookings, after taking into
account the impact of foreign currency fluctuations and purchase accounting adjustments, was $11 million.
An increase in domestic air volume contributed $19 million to the remaining $11 million increase in air
net revenue. This increase helped offset a domestic decrease of $13 million, primarily driven by lower net
revenue per air ticket. Of the $13 million decrease, $4 million resulted from a decrease in air net revenue due
to a reduction in paper ticket fees as the industry continued to move towards electronic ticketing to meet the
International Air Transport Association mandate to eliminate paper tickets by the end of May 2008. The final
contractual step-down in transaction payments that we receive from the airlines with which we have charter
associate agreements occurred on June 1, 2006, and represented another $4 million of the $13 million decrease
in net revenue per air ticket. The remaining domestic decrease was due primarily to lower average
commissions and transactions payments on our air transactions.
An increase in air volume contributed $15 million to the overall remaining increase in international air
net revenue. This increase helped offset an international decrease of $10 million driven by lower net revenue
per air ticket. The lower net revenue per air ticket primarily resulted from an increase in mix of short-haul
flights, the introduction of low cost carriers on our websites in Europe and decreased compensation from
suppliers. The sale of our offline U.K. travel subsidiary in July 2007 reduced the overall growth in
international air net revenue due to the inclusion of seven months of net revenue from that business in 2007 as
compared to a full year in 2006.
Non-air. Non-air net revenue is comprised of net revenue from hotel bookings, dynamic packaging
(which may include a combination of travel products, such as air, hotel and car reservations), car bookings,
cruise bookings and destination services. Net revenue from our non-air business increased $80 million, or
25%, to $394 million for the year ended December 31, 2007 from $314 million for the year ended
December 31, 2006. Of this increase, $10 million was due to foreign currency fluctuations. In addition, net
revenue increased $28 million year-over-year due to purchase accounting adjustments, which resulted in a
reduction in our non-air net revenue of $4 million and $32 million for the years ended December 31, 2007 and
2006, respectively. The remaining increase in net revenue from non-air bookings, after taking into account the
impact of foreign currency fluctuations and purchase accounting adjustments, was $42 million.
An increase in domestic hotel and dynamic packaging net revenue of $22 million and $10 million,
respectively, primarily drove the domestic increase in non-air net revenue of $31 million. Domestic net
revenue from hotel bookings increased due to higher net revenue per transaction, primarily driven by a shift in
mix from retail to merchant, higher ADRs and a longer average length of stay. An increase in transaction
volume and net revenue per transaction drove the increase in net revenue from dynamic packaging. These
increases were partially offset by decreases in net revenue from car rentals and cruises.
An increase in international hotel and dynamic packaging net revenue of $10 million and $4 million,
respectively, primarily drove the international increase in non-air net revenue of $11 million. This increase in
international hotel and dynamic packaging net revenue was partially offset by decreases in net revenue from
car rentals and cruises. The sale of our offline U.K. travel subsidiary in July 2007 reduced the overall growth
in international non-air net revenue due to the inclusion of seven months of net revenue from that business in
2007 as compared to a full year in 2006.
Other. Other net revenue is primarily comprised of advertising and travel insurance revenue and revenue
from our hosting business. Other net revenue increased $7 million, or 8%, to $90 million for the year ended
December 31, 2007 from $83 million for the year ended December 31, 2006. Of this increase, $1 million was
due to foreign currency fluctuations. In addition, net revenue increased $1 million year-over-year due to
purchase accounting adjustments, which resulted in a reduction in our other net revenue of $2 million and
$3 million for the years ended December 31, 2007 and 2006, respectively. The remaining increase in other net
revenue, after taking into account the impact of foreign currency fluctuations and purchase accounting
adjustments, was $5 million.
The remaining increase in other net revenue is primarily due to a $10 million increase in domestic other
net revenue, which is partially offset by a $5 million decrease in international other net revenue. The domestic
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