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Travelocity.com Inks Continental Ad Deal

Travel Web site Travelocity is teaming with Continental Airlines in an online marketing partnership.

Through the arrangement, the Fort Worth, Texas-based site said it would promote Continental travel deals through joint promotions, advertising and e-mail campaigns.

The announcement marks a renewed effort by Travelocity to sign big-budget, long-term advertising deals, even as the ticket-sales market continues to see weakness. That push is seeing some measure of success, with the campaign to secure large advertisers helping the firm to remain relatively insulated from the marked decline in ticket sales.

The travel decline contributed to Travelocity warning on Wednesday that its overall fourth-quarter revenues would come in 9 percent below expectations, but its income from advertising and other non-transactional sources would actually exceeded prior guidance.

"This agreement establishes a long-term, mutually beneficial marketing relationship between Travelocity.com and Continental Airlines," said Travelocity.com president and chief executive officer Terry Jones. "Partnering with Continental lays the groundwork for strong revenue and profit growth in 2002 and gives our members more opportunities to take advantage of great travel deals."

In addition to Continental, Travelocity has signed advertising and promotional deals in recent months with American Airlines and JetBlue Airways, the latter of which named the site as its exclusive online marketing partner.

In late September, Travelocity also signed an agreement with Otto, a German direct marketer and retailing giant -- best known in the U.S. as the owner of Spiegel and Eddie Bauer. That deal would see the two engaging in cross-promotion and the development of a new European joint venture.

Meanwhile, Continental -- which actually is a founding partner in Travelocity rival Orbitz -- stands to benefit from increased online promotion, because tickets sold via the Internet generally produce higher margins than those sold through traditional channels. And like many airlines, Continental is struggling to cope with the downturn in travel due to the economic recession and the events of Sept. 11.

"We view Travelocity as a valued online distribution partner," said Bonnie Reitz, senior vice president, sales and marketing for Continental Airlines. "The combination of Travelocity's reach of more than 30 million members and Continental's scope of service will make it easier than ever for travelers to take advantage of our great offerings."