Fallout in the Travel Sector

When an Internet company stops sending out those "hey-look-me-over" press releases, it's almost a sure bet that something is awry, and that seems to be the case with Lowestfare.com, which has now stopped selling airline tickets.

A notice posted on the Web site of the discount travel services provider says: "While Lowestfare.com continues its vacation and cruise business, we have discontinued our airline ticketing-selling operation as of May 2..."

A look back over the Las Vegas-based company's media releases indicates the last one came out in August 2001, when the company, billing itself at the time as a "full-service provider of discount travel products and services for leisure and business travelers," signed a partnership deal with Site59.com, which offers last-minute travel packages.

The good news for customers is that the notice on the site says that "all airline tickets issued up to this date will be honored."

The travel sector has been one of the stellar performers in the world of e-commerce, and competition from outfits like Expedia , Travelocity and Orbitz is intense.

It's obvious there isn't room for everyone, and some fallout has been expected. Even a company like Priceline.com , which just reported a profitable quarter, has seen its stock price punished recently when revenues weren't high enough to please investors. The reason revenues weren't high enough: weakness in the air travel sector.

Privately held Lowestfare.com is owned by financier Carl Icahn, former chairman of TWA, and owner of the airline from 1985 to 1993. Icahn reportedly had an inside deal for discounted tickets with TWA, but lost the edge when American Airlines bought the bankrupt TWA a year ago in a half-billion-dollar deal.

Lowestfare, founded in 1995, owns Jetset Tours, an international airline ticket consolidator and tour operator, and Maupintour, a luxury escorted tour provider.