The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere in this report and our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2009.

OVERVIEW

We are a leading global online travel company that uses innovative technology to enable leisure and business travelers to search for and book a broad range of travel products. Our brand portfolio includes Orbitz, CheapTickets, the Away Network, and Orbitz for Business in the Americas; ebookers in Europe; and HotelClub and RatesToGo based in Sydney, Australia, which have operations globally. We provide customers with the ability to book a comprehensive set of travel products from suppliers worldwide, including air travel, hotels, vacation packages, car rentals, cruises, travel insurance and destination services such as ground transportation, event tickets and tours.

We generate revenue primarily from the booking of travel products and services on our websites. We provide customers the ability to book travel products and services on both a standalone basis and as part of a dynamic vacation package, primarily through our merchant and retail business models. Under our merchant model, we generate revenue for our services based on the difference between the total amount the customer pays for the travel product and the negotiated net rate plus estimated taxes that the supplier charges us for that product. Under our retail model, we earn commissions from suppliers for airline tickets, hotel rooms, car rentals and other travel products and services booked on our websites. Historically, under both the merchant and retail business models, we have also earned revenue by charging customers a service fee for booking airline tickets, hotel rooms and certain other travel products on our websites (See "Industry Trends" below for further discussion regarding changes surrounding our booking fees). In addition, we receive incentive payments for each segment of travel that is processed through a global distribution system ("GDS").

We also generate advertising revenue through our partner marketing programs. These programs provide direct access to our customers through a combination of display advertising, performance-based advertising and other marketing programs. In addition, we generate revenue from our white label and hosting businesses. We earn revenue from our white label business through revenue sharing arrangements for travel booked on third-party websites. We earn revenue from our hosting business through license or fee arrangements.

We are a leader in air travel, the largest online travel segment. This leadership position has historically enabled us to drive growth in complimentary travel products, such as hotels, car rentals, cruises and dynamic vacation packages. Our non-air travel products generally generate higher net revenue per transaction than our air travel product. We believe these non-air travel products represent significant long-term growth opportunities, despite the softness in demand we are currently experiencing as a result of weak economic and industry conditions (See "Industry Trends" below). Our primary focus for the remainder of 2009 and 2010 is on driving global hotel transaction growth, on a standalone basis and as part of a dynamic vacation package. Specifically, we are focused on the following seven key initiatives:

• Hotel connectivity, infrastructure and content: We will continue to explore new hotel connectivity opportunities and expect to make additional investments in our hotel infrastructure. We also intend to improve the richness of the hotel content available on our websites. For example, we are focused on improving the quality and structure of editorial descriptions and photographs on our websites, building flexibility and automation as it relates to promotional capabilities, and providing additional user-generated content.

• Supply expansion: We intend to utilize our SmartRetail program to expand into new markets where online penetration is low or where hotels are not accustomed to working with the merchant model. Similar to our retail business model, under our SmartRetail program, we earn commissions from suppliers for travel products booked on our websites. However, under SmartRetail, we receive this commission at the time of booking. We believe this program will enable us to increase the number of

hotels available for booking on our websites, while at the same time eliminating the collection issues that are inherent in the traditional retail model.

• Intelligent marketplace: We plan to improve hotel conversion rates through the development of systems and technology that will allow us to use historical data to provide customers with a personalized shopping experience and more relevant search results.

• Retailing: We continue to focus on enhancing the customer experience across all of our brands to improve conversion rates. We intend to use multivariate testing to optimize our user interfaces and landing pages, the customer shopping experience and our cross sell efforts.

• Telesales: We intend to build upon our existing telesales capabilities to drive volume for higher margin travel products.

• Organic traffic: We are actively pursuing strategies to increase the amount of non-paid traffic coming to our websites through search engine optimization ("SEO") and customer relationship management ("CRM").

• Distribution: We intend to drive transaction growth by leveraging the customer base of our third-party partners through further expansion of our white label business.

We have already taken significant steps in 2009 to drive global hotel transaction growth by launching Total Price hotel search results and Orbitz Hotel Price Assurance, both of which are industry-leading innovations, by removing change and cancellation fees on hotels booked through Orbitz.com and CheapTickets.com and by reducing booking fees on hotels around the world. We believe these improvements to our global hotel offering deliver value to our customers and should improve our competitiveness over time.

In light of current economic and industry conditions, we are also focused on improving our operating and marketing efficiency, simplifying the way we do business, and continuing to innovate. In late 2008 and in 2009, we lowered our cost structure by reducing our global workforce, our use of contract labor and various other operating and capital costs. We also completed the implementation of a common technology platform for all of our ebookers websites in Europe. We will continue to focus on opportunities to further streamline our cost structure. We are also actively pursuing strategies to improve the efficiency of our marketing efforts. We believe these strategies will position us to more effectively manage through this challenging environment.

Industry Trends

The current recession has significantly impacted the travel industry. As demand for air travel continues to be weak, certain domestic and international airlines have reduced capacity and have reduced ticket prices to levels significantly below last year to drive volume. Further capacity reductions could negatively impact demand for air travel and could adversely impact the net revenue that online travel companies ("OTCs") generate from the booking of airline tickets, hotels and car rentals. Bankruptcies and consolidation in the airline industry could result in further capacity reductions, which would reduce the number of airline tickets available for booking on OTCs' websites.

In 2009, certain OTCs who historically charged booking fees, including us, eliminated booking fees on most flights and reduced booking fees on hotels. The elimination of booking fees on OTCs' websites has significantly reduced the net revenue that OTCs generate from airline tickets. We believe the combination of our cost reductions, new media monetization initiatives, our improved marketing efficiency and the increase in air transactions we have experienced since removing fees should enable us to offset most, if not all, of the impact of the fee reductions.

Fundamentals in the U.S. hotel industry continue to be weak. Hotel occupancy rates and average daily rates ("ADRs") continue to decline in 2009. We believe that hotel suppliers will maintain ADRs at levels significantly below last year through the remainder of 2009 and into 2010 to improve hotel occupancy. Fundamentals in the European and Asia Pacific hotel industries have also deteriorated. Lower ADRs reduce the net revenue that OTCs earn on hotel bookings.

The current economic environment has also significantly impacted the car rental industry. As a result of lower demand for air travel, demand for car rentals has also declined. We expect this trend to continue through the remainder of 2009. Lower demand for car rentals could reduce the net revenue that OTCs generate from the booking of cars. In addition, car rental companies currently have limited access to financing and have reduced their fleets. The overall reduction in rental car fleets has resulted in a significant increase in ADRs for domestic car rentals. This increase in ADRs has partially offset the negative impact of reduced demand for car rentals. Also, the financial condition of certain car rental companies has deteriorated, which may result in bankruptcies and industry consolidation, which in turn could cause further increases in ADRs for car rentals and a reduction in the number of cars available for booking on OTCs' websites.

We believe that our gross bookings and net revenue for the nine months ended September 30, 2009 were significantly negatively impacted by the economic and industry conditions described above. We expect these trends and their impact on our gross bookings and net revenue to continue at least through the remainder of 2009. In response, in late 2008 and in 2009, we lowered our cost structure by reducing our global workforce, our use of contract labor and various other operating and capital costs. We expect to realize approximately $40 to $45 million of annualized cash savings from these actions. In 2009, we also significantly restructured our approach to marketing, placing greater emphasis on attracting more non-paid traffic to our websites and eliminating unprofitable search engine marketing ("SEM") and travel publisher marketing spending. This emphasis on improving our marketing efficiency was the primary driver of the $86 million decline in our total marketing expense in the nine months ended September 30, 2009 compared with the nine months ended September 30, 2008. We expect that our marketing expense for the remainder of 2009 will continue to be lower than the prior year, as a result of these ongoing efforts to increase marketing efficiency.

The growth rate of online travel bookings in the domestic market has slowed due to both the maturity of this market and the current recession. Much of the initial rapid growth experienced in the online travel industry was driven by consumers shifting from purchasing travel through traditional offline channels to purchasing travel through online channels. Going forward, we believe that growth rates in the domestic online travel market will more closely follow the growth rates of the overall travel industry.

Internationally, the online travel industry continues to benefit from rapidly increasing Internet usage and growing acceptance of online booking. We expect international growth rates for the online travel industry to continue to outpace growth rates of the overall travel industry.

We believe that OTCs will continue to focus on differentiating themselves from supplier websites in a variety of ways, including offering customers the ability to selectively combine travel products such as air, car, hotel and destination services into dynamic vacation packages. Through dynamic vacation packages, we make certain products available to our customers at prices that are generally lower than booking each travel product separately. We foresee significant growth potential for OTCs for these types of services, particularly since travelers are increasingly price-sensitive. Our net revenue per transaction is generally higher for dynamic vacation packages than for stand-alone travel products.

OTCs make significant investments in marketing through both online and traditional offline channels. Key areas of online marketing include SEM, travel publisher marketing, display advertising, affiliate programs and email marketing. Search engine marketing costs have been rising in the U.S. over time, although to a lesser extent in the current economic environment, and competition for search-engine key words continues to be intense. If these trends continue, we could experience lower margins or declines in transaction growth rates. We are actively pursuing strategies to improve the efficiency of our marketing efforts. These strategies include increasing the amount of non-paid traffic coming to our websites through SEO and CRM and eliminating unprofitable SEM and travel publisher marketing spending. Our retailing efforts are designed to improve conversion and ultimately reclaim previously unprofitable SEM and travel publisher marketing transactions on a profitable basis.

RESULTS OF OPERATIONS

Key Operating Metrics

Our operating results are affected by certain key metrics that represent overall transaction activity. Gross bookings and net revenue are key metrics that drive our business. Gross bookings is defined as the total amount paid by a consumer for travel products booked under both the retail and merchant models. Net revenue includes: commissions earned from suppliers under our retail model; the difference between the total amount the customer pays us for a travel product and the negotiated net rate plus estimated taxes that the supplier charges us for that travel product under our merchant model; service fees earned from customers under both our retail and merchant models; advertising revenue and certain other fees and commissions.

Gross bookings provide insight into changes in overall travel demand, both industry-wide and on our websites. We track net revenue trends for our various brands, geographies and product categories to gain insight into the performance of our business across these categories.

The table below shows our gross bookings and net revenue for the three and nine months ended September 30, 2009 and September 30, 2008. Air gross bookings are comprised of stand-alone air gross bookings, while non-air gross bookings are comprised of gross bookings from hotels, car rentals, dynamic vacation packages (which include a combination of travel products, such as air, hotel and car reservations), cruises, destination services and travel insurance. Air net revenue is comprised of net revenue from stand-alone air bookings, while non-air net revenue is comprised of net revenue from hotel bookings, dynamic vacation packages, advertising and media and other sources.

                                               Three Months Ended                                       Nine Months Ended
                                                  September 30,             $             %               September 30,             $              %
                                                2009          2008       Change       Change(a)          2009         2008        Change       Change(a)
                                                  (in millions)                                           (in millions)

Gross bookings
Domestic
Air                                          $    1,616      $ 1,703     $   (87 )            (5 )%   $    4,792     $ 5,397     $   (605 )           (11 )%
Non-air                                             583          610         (27 )            (4 )%        1,808       1,870          (62 )            (3 )%

Total domestic gross bookings                     2,199        2,313        (114 )            (5 )%        6,600       7,267         (667 )            (9 )%
International
Air                                                 218          264         (46 )           (18 )%          664         893         (229 )           (26 )%
Non-air                                             148          157          (9 )            (6 )%          362         492         (130 )           (26 )%

Total international gross bookings                  366          421         (55 )           (13 )%        1,026       1,385         (359 )           (26 )%

Total gross bookings                         $    2,565      $ 2,734     $  (169 )            (6 )%   $    7,626     $ 8,652     $ (1,026 )           (12 )%

Net revenue
Domestic
Air                                          $       48      $    70     $   (22 )           (32 )%   $      168     $   218     $    (50 )           (23 )%
Non-air                                              96          117         (21 )           (18 )%          282         315          (33 )           (10 )%

Total domestic net revenue                          144          187         (43 )           (23 )%          450         533          (83 )           (16 )%
International
Air                                                  12           17          (5 )           (29 )%           42          54          (12 )           (21 )%
Non-air                                              31           36          (5 )           (15 )%           71         103          (32 )           (32 )%

Total international net revenue                      43           53         (10 )           (19 )%          113         157          (44 )           (28 )%

Total net revenue (b)                        $      187      $   240     $   (53 )           (22 )%   $      563     $   690     $   (127 )           (18 )%

(a) Percentages are calculated on unrounded numbers.

(b) For the three months ended September 30, 2009 and September 30, 2008, $32 million and $29 million of our total net revenue, respectively, was attributed to incentive payments earned for air, car and hotel

segments processed through GDSs. For the nine months ended September 30, 2009 and September 30, 2008, $92 million and $93 million of our total net revenue, respectively, was attributed to incentive payments earned for air, car and hotel segments processed through GDSs.

Comparison of the three months ended September 30, 2009 to the three months ended September 30, 2008

Gross Bookings

For our domestic business, which is comprised principally of Orbitz, CheapTickets and Orbitz for Business, total gross bookings decreased $114 million, or 5%, during the three months ended September 30, 2009 from the three months ended September 30, 2008. Of this decrease, $87 million was due to a decrease in domestic air gross bookings, which was driven by a lower average price per airline ticket, partially offset by higher transaction volume. The lower average price per airline ticket was primarily due to lower fuel prices and softer demand for air travel. Transaction volume increased primarily due to the removal of booking fees in April 2009 on most flights booked through our Orbitz.com and CheapTickets.com websites and lower air fares.

Non-air gross bookings decreased $27 million, or 4%, during the three months ended September 30, 2009 from the three months ended September 30, 2008. This decrease was primarily driven by lower gross bookings for hotels and car rentals, partially offset by higher gross bookings for dynamic packages. Gross bookings for hotels decreased primarily due to a significant decline in ADRs for hotel rooms as hotel suppliers try to increase occupancy rates in a period of weak demand. Gross bookings for car rentals decreased due to lower transaction volume, partially offset by a higher average price per transaction. The average price per transaction increased primarily due to a reduction in rental car fleets, which was partially the result of limited access to financing by car rental companies. Gross bookings for dynamic packages increased due to higher transaction volume, which was partially offset by a lower average price per transaction. Volume for dynamic packaging increased due to a general shift in traveler preference towards dynamic packaging, from stand-alone travel products, because of the value offered through packaging. The lower average price per transaction is mainly due to a decline in hotel ADRs and a decline in airline ticket prices.

For our international business, which is comprised principally of ebookers, HotelClub and RatesToGo, total gross bookings decreased $55 million, or 13%, during the three months ended September 30, 2009 from the three months ended September 30, 2008. Of this decrease, $31 million was due to foreign currency fluctuations. The remaining $24 million decrease was due to a $25 million decrease in air gross bookings, partially offset by a $1 million increase in non-air gross bookings. The decrease in air gross bookings was primarily due to a lower average price per airline ticket, partially offset by higher transaction volume. The decrease in average price per airline ticket is primarily due to lower demand for air travel and a shift in customer preference towards low cost carriers and short-haul flights.

The decline in non-air gross bookings was primarily driven by a significant decline in hotel gross bookings for our HotelClub brand, largely offset by an increase in gross bookings for dynamic packaging and car rentals for our ebookers brand. For our HotelClub brand, lower transaction volume in Europe and lower average price per transaction, due to lower ADRs for hotel rooms, drove the decrease in hotel gross bookings. The increase in gross bookings for dynamic packaging was due to higher transaction volume, partially offset by lower average price per transaction. Gross bookings for car rentals increased due to an increase in average price per transaction.

Net Revenue - See discussion of net revenue in the Results of Operations section below.

Comparison of the nine months ended September 30, 2009 to the nine months ended September 30, 2008

Gross Bookings

For our domestic business, total gross bookings decreased $667 million, or 9%, during the nine months ended September 30, 2009 from the nine months ended September 30, 2008. Of this decrease, $605 million was due to a decrease in domestic air gross bookings, which was driven by a lower average price per airline ticket, partially offset by higher transaction volume. The lower average price per airline ticket was primarily

due to lower fuel prices and softer demand for air travel. Transaction volume increased primarily due to the removal of booking fees in April 2009 on most flights booked through our Orbitz.com and CheapTickets.com websites and lower air fares.

Non-air gross bookings decreased $62 million, or 3%, during the nine months ended September 30, 2009 from the nine months ended September 30, 2008. This decrease was primarily driven by lower gross bookings for hotels and car rentals, partially offset by higher gross bookings for dynamic packages. Gross bookings for hotels decreased due to a significant decline in ADRs for hotel rooms and to a lesser extent, lower transaction volume. During this period of weak travel demand, most hotel suppliers have tried to stimulate occupancy by reducing hotel room rates. Gross bookings for car rentals decreased due to lower transaction volume, partially offset by a higher average price per transaction. The average price per transaction increased primarily due to a reduction in rental car fleets, which was partially the result of limited access to financing by car rental companies. Gross bookings for dynamic packages increased due to higher transaction volume, which was partially offset by a lower average price per transaction. Volume for dynamic packaging increased due to a general shift in traveler preference towards dynamic packaging, from stand-alone travel products, because of the value offered through packaging. The lower average price per transaction is mainly due to a decline in hotel ADRs and a decline in airline ticket prices.

For our international business, total gross bookings decreased $359 million, or 26%, during the nine months ended September 30, 2009 from the nine months ended September 30, 2008. Of this decrease, $207 million was due to foreign currency fluctuations. The remaining $152 million decrease was due to a $100 million decrease in air gross bookings and a $52 million decrease in non-air gross bookings. The decrease in air gross bookings was due to a lower average price per airline ticket driven by lower demand for air travel and a shift in customer preference towards low cost carriers and short-haul flights.

The decline in non-air gross bookings was primarily driven by a significant decline in hotel gross bookings for our HotelClub brand, and to a much lesser extent, a decline in gross bookings for car rentals for our ebookers brand. For our HotelClub brand, lower transaction volume in Europe and lower average price per transaction, due to lower ADRs for hotel rooms, drove the decrease in hotel gross bookings. The decrease in gross bookings for car rentals was due to lower transaction volume and a lower average price per transaction, as car rental companies discounted prices heavily to drive volume. An increase in gross bookings for dynamic packaging for our ebookers brand partially offset the decline in gross bookings for hotels and car rentals. The increase in gross bookings for dynamic packaging was due to higher volume, partially offset by a lower average price per transaction.

Net Revenue - See discussion of net revenue in the Results of Operations section below.

Results of Operations

Comparison of the three months ended September 30, 2009 to the three months
ended September 30, 2008


                                                           Three Months Ended
                                                             September 30,                 $              %
                                                        2009               2008         Change        Change(a)
                                                             (in millions)

Net revenue
Air                                                   $     60          $       87      $   (27 )            (31 )%
Hotel                                                       52                  71          (19 )            (27 )%
Dynamic packaging                                           30                  32           (2 )             (5 )%
Advertising and media                                       15                  17           (2 )            (10 )%
Other                                                       30                  33           (3 )            (11 )%

Total net revenue                                          187                 240          (53 )            (22 )%
Cost and expenses
Cost of revenue                                             34                  41           (7 )            (17 )%
Selling, general and administrative                         65                  75          (10 )            (15 )%
Marketing                                                   48                  86          (38 )            (44 )%
. . .