What is a business, revenue, and advertising model?

Business model (revenue structure) of Orbitz?

• Does anyone know what the business model of Orbitz is? I just read the financial report released by the company (below) but a little bit confused about how they gain profit by just selling airline ticket? Does it charge commission to the airlines, is it a percentage rate or flat rate per ticket sold? Who set the final airfare that we observe on the search results page, Orbitz or the airline companies? Doesn't Orbitz just show the price info from ITA? "Domestic air net revenue increased for the three months ended June 30, 2013 as compared with the three months ended June 30, 2012 , due to higher net revenue per transaction and the addition of an airline servicing revenue stream, partially offset by lower volume"

• Answer:

  OTAs like Orbitz typically get commissions on flights or hotel rooms they book. Commissions on air are notoriously very small compared to hotels. Orbitz doesn't just show the price information from ITA they also handle the transaction and some of the customer support. Think of them as a reseller not to confuse with airfare search engines like Kayak or hipmunk that just show you the price from ITA and redirect you to the airline or an OTA. Search engines typically get no(or tiny) commissions on regular airfare. OTAs like Orbitz also resell private label airfares meaning you don't know what airline you'll be travelling on before you book. Commissions on those are higher. Consolidators buy seats in bulk and resell them via OTAs at a discounted price. Airlines do that to dump unsold inventory or reduce risk. This is fairly common for international flights as the demand is harder to predict.