Name-your-own-price travel company Priceline.com Inc. has disclosed that it paid out about $10 million in airfare refunds in September following the terrorist attacks on the United States.
In a 10-Q quarterly filing with the SEC, the company also said that its economic forecasting is “very challenging” and that although demand for airline tickets has substantially recovered following the events of Sept. 11, ticket sales have lagged due in part to lower average offer prices.
The company said in its filing that it paid out about $10 million in refunds following the attack “as a result of the temporary suspension of our non-refund policy primarily for customers who (had) purchased itineraries for travel during the last three weeks of September.”
also said in the filing that “our airline suppliers are facing significant financial difficulties and some have even discussed the possibility of impending bankruptcy. As a result, we are operating in an uncertain competitive environment that makes near-term forecasting very challenging.”
“We believe that this uncertainty will extend into the fourth quarter and perhaps beyond. Further terrorist attacks or the bankruptcy or insolvency of a major domestic airline, would adversely affect our business and results of operations,” the company said.
Almost as if to prove the company’s point, the recent New York airliner crash sent the stock of all the online travel companies plummeting. Priceline has recovered somewhat and was trading at $4.42 in mid-morning market action, after opening at $4.37.
Priceline beat its own revised estimates for third-quarter earnings, coming in with a pro forma profit of 3 cents a share on earnings of $6.3 million. Priceline has said it expects a pro forma break-even fourth quarter.
The company also said in the filing with the Securities and Exchange Commission that it has launched a company-wide charge-back prevention program to address credit card fraud complaints.
But short of money Priceline is not, saying that as of Sept. 30 it had approximately $151.5 million in cash, cash equivalents, restricted cash and short-term investments. Still, in the 10-Q the company reported that as of Sept. 30, 2001, “we had an accumulated deficit of $1.5 billion.”
Priceline saw its share price plunge to as little as $1.06 after it began to run into problems a year ago. At one time it had traded at more than $100 a share.