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Biztravel to offer refunds for flight problems

The online travel site will pay customers up to $200 if they have problems with certain flights booked through their service.

Online travel site Biztravel declared today that it was putting its "money where its mouth" is, saying it will pay customers up to $200 if they have problems with certain flights booked through their service.

It might be wishing it had kept its mouth shut.

Biztravel's site crashed the same day it promised to pay for such inconveniences as flight delays, cancellations or lost luggage on five carriers the travel service uses. The company also guaranteed its Web site, saying it would pay $10 to customers who could not connect online to an employee within five minutes. The site was down for 40 minutes.

The site crashed due to a sharp rise in traffic after they announced the guarantee. The traffic finally overwhelmed the site this afternoon, said Justin Shaw, Biztravel's vice president and general manager. Most customers were asking about the customer service offer or scheduling trips.

"We're not happy with the outage, but we are delighted with the cause," Shaw said.

But they do not plan on mailing out a bunch of $10 checks: "A (site outage) is not part of our guarantee policy," Shaw said. "Although some people might not give us a second chance after this, we believe our offer is revolutionary, and it's something consumers have wanted for a long time."

Joshua Friedman, a senior research analyst for Net study firm International Data Corp. (IDC) said the service guarantee is unprecedented and called it "gimmicky." To him, the move by Rosenbluth Interactive, which owns Biztravel, was an attempt to help draw traffic to Biztravel and differentiate it from other online players, such as Travelocity.com and Expedia.com.

Based on some airlines' "horrendous reputation" for arriving on time, he questioned whether Biztravel could profit from the offering.

"This is like the ultimate guarantee," he said. "I really have to question the soundness of this decision. It sounds almost like a publicity stunt."

Biztravel said the guarantee applies to flights on American Airlines, Continental Airlines, US Airways, British Airways and Air France.

Like most e-commerce sectors, online travel is facing a shakeout this year during which analysts predict many firms will either become acquired or perish. Online travel firms are hustling to attract new investors and customers, and neither are easy to find in a down market when major airlines are increasingly moving online.

In November, a consortium of powerful airlines that included Continental Airlines, UAL's United Airlines, Delta Air Lines and Northwest Airlines, said that they would offer the first multi-airline Web site. The Department of Justice is currently investigating the consortium, which could have broad control and influence over fares, to see if it has violated any antitrust laws.

Should they be allowed to do business, analysts have said the consortium could become a mammoth force in travel sales. Web-based sales in leisure and unmanaged business travel are expected to reach $28 billion in 2005, according to Jupiter Communications.

Under Biztravel's customer service guarantee, the company said it will refund $100 for any flight arriving more than a half-hour late and $200 for any flight more than an hour late. For flights more than two hours late, the firm will refund the cost of the ticket. Biztravel will pay customers up to $50 if they want to change their seat assignments, and $10 for customers who call and are put on hold for more than 90 seconds.