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Travel site Orbitz pushes back launch

In the face of heated competition, controversial travel Web site says it has delayed its public launch date from this year to next June.

In the face of heated competition, controversial travel Web site today said it has delayed its public launch date from this year to next June.

Chicago-based Orbitz, which is backed by a consortium of airline giants including American, Continental, Delta, Northwest and United, said it has delayed the launch of the site to conduct a large online beta test to ensure the site can handle hefty transaction volume and provide adequate customer service.

Orbitz, which will offer online flight booking to more than 30 participating U.S. and foreign airline carriers, will officially launch the Web site in June once its features, search engine and customer-service model have been completely tested, the company said. A marketing campaign is in the works slated to launch at the same time.

Orbitz CEO Jeffrey Katz said the June launch will ensure that the giant site is consumer friendly. At least 100,000 registered consumers will use the site during beta testing from February to June, providing feedback that may be incorporated into the public site when it's launched next summer.

"We are committed to setting a new standard for customer service," Katz said in a statement. "A phased-in launch that includes a monster beta test will ensure that Orbitz can handle the transaction volume and deliver the reliability and service levels that consumers deserve."

Beginning next month, Orbitz, also known as "T2," will offer people free access to its search engine to find reasonable airfares. In April, registered consumers participating in the beta test will also be able to complete online purchases of car, hotel, cruise and vacation packages, the company said.

During the past few months, Orbitz has been dealing with an investigation by the Department of Transportation and the Department of Justice over the airlines' proposal and over complaints made by rivals about the fairness of the new venture. The U.S. Senate is conducting a hearing about whether the Web site can be developed. The DOT is expected to issue a decision on the proposal by the end of the year.

Orbitz' move comes at a time when the online travel sector is sizzling with increased competition.

Early players such as and are facing heightened competitive pressure from a number of start-ups fighting in the relatively new niche poised for rapid growth.

Learn more about the online travel sector this week on

Saturday and Sunday, September 9 and September 10, 4 to 5 p.m. ET on CNBC

Online travel is one of the fastest-growing segments of the travel industry. Cambridge, Mass.-based Forrester Research predicted that online travel sales will quadruple from last year's level to $29 billion in 2003. According to PhoCus Wright, 40 percent of online consumers have bought airline tickets. By comparison, 44 percent have purchased computers or software, and 42 percent have purchased books.

Just yesterday, Alviso, Calif.-based upstart Savvio launched its discount-travel Web site. Savvio, which specializes in airfare and cruise bookings, does away with so-called blind purchasing and allows customers to select the most optimal departure times and flights without committing to a purchase. This goes against popular discount agencies such as Priceline, which require customers to purchase tickets before they know specific departure times or the airline.

Hotwire, a discount ticket broker backed by six major airlines and a direct competitor of Priceline, also debuted this month.

Orbitz, which was originally scheduled to go live in the middle of this year, also struck three new partnerships today with rental car agencies Advantage Rent-A-Car and Hertz, along with cruise company National Leisure Group (NLG).

Hertz and Advantage Rent-A-Car join Orbitz as charter associates, which means they will offer a selection of their Internet-only rates on the Orbitz site. NLG will be the exclusive reseller of cruise services to Orbitz.

In addition, Orbitz said it has formed several agreements with companies that will provide content and services on the Web site. New content partners include online map provider and travel resource guide Zagat Survey.