WASHINGTON, Sept. 8, 2000 -- The Priceline niche got a little more crowded this week. A new deep-discount service, Hotwire, taxied out onto the Web while another, Orbitz delayed its pushback from the gate.

Like Priceline, Hotwire sells airlines' unsold inventory -- seats on unpopular route segments that would probably fly empty otherwise. But, like Priceline, Hotwire's procedure contains pitfalls for the unwary:

  • Travelers don't learn which airline they'll be flying on until after they agree to purchase the ticket.
  • Even worse, travelers don't know
  • Tickets are non-refundable and may not be exchanged or returned. Itineraries, needless to say, can't be changed.
  • Frequent flyer miles don't apply.
  • There may be landing fees and taxes that may (or may not) be higher than the airlines charge regular travelers.
  • whenthey'll be flying until after they agree to purchase the ticket.


We tested the system by asking for a round-trip between Washington Dulles and New York LaGuardia, departing on Monday, Sept. 11 and returning Tuesday, Sept. 12. Hotwire offered us a ticket for $298, which didn't seem too bad for this route. But with no information on airline or times or the exact routing (we had visions of a connection in Cleveland), we couldn't bring ourselves to press the "buy" button.

Good thing, too. We surfed over to US Airways and found a $189 round-trip leaving for New York at 6:50 a.m. and returning the next day at 11 a.m. -- exactly the times we wanted and $109 cheaper than Hotwire's mystery airline.

Orbitz was suppposed to launch this fall but its new CEO, Jeffrey Katz, pushed the date back to next June, saying he wants to be sure the site offers a high level of customer service. Orbitz is owned by United, Delta, Northwest, Continental and American Airlines.

It's thought that Orbitz will target giants Travelocity and Expedia rather than Priceline and other bargain-hunter sites. But like its founders, Orbitz may have a hard time meeting its schedule. The Justice Department has launched an antitrust investigation after complaints from travel agents who say the airlines are forming a cartel that will give them a "stranglehold" on the travel business.