Fast Talk: Jeffrey Katz
You could say that Jeffrey Katz, president and CEO of Orbitz.com, knows a thing or two about the airline industry. He was a flight instructor while studying transportation management at MIT's graduate school, is a licensed pilot, worked for 20 years in various posts at American Airlines (including head of its computerized reservations system), and was Swissair's president and CEO for three years. His knowledge of the industry—and financial backing from the five biggest American airlines—helped him and his partners launch the on-line travel company that shook up the Web.
1)Where are you now?
I am on an airplane flying from Chicago to Los Angeles. My family lives there and I commute every week to Orbitz, which is based in Chicago. Like most people, I'd rather be at my destination—in this case at my house with my wife, my daughter, and my dog in Los Angeles.
2)How did you get into the business side of the travel industry?
I was a graduate student at the Massachusetts Institute of Technology and I was very interested in the dynamics and logistics of the transportation business. Trucking, railroads, and aviation were fascinating economic and optimization businesses. I was also a flight instructor at that time, so I had an inherent interest in airlines. In 1980, the airlines were in the early stages of coping with deregulation. The industry was looking for people who could help solve the thorny problems of a business in a new environment, and I got into travel as a by-product of my academic interests.
3)How has your previous life as an airline industry executive shaped your position as the CEO of Orbitz?
It has made me very empathetic to the needs of travelers and the people who run airlines and related businesses. I am very, very motivated to making travel a much better experience than it commonly is today. At Orbitz, we are already doing a lot to make the shopping experience easier: making travelers better informed about things like flight delays, and using the Internet in new ways to improve customer care.
4)How does your pilot's license figure into your job?How often do you get a chance to fly? Does it offer you any extra insight into the travel industry?
I don't get to fly nearly as much as I would like to anymore. But I'm looking for a new airplane so I can get more flying time again. One always struggles to make enough free time to stay proficient. Flying an airplane, and being trained as an engineer, have given me a few insights into the airline business and the people who support it. But they really aren't factors in my day-to-day work.
5)What has been the biggest obstacle you've had to face in the past 20 years?
For me the most challenging time was the loss of Flight 111 near Halifax when I was Swissair's chief executive. A plane crash is a responsibility that I wish upon no one. At Orbitz, we (like everybody else) feel a special responsibility to help rebuild consumer confidence in travel in the wake of the terrible events of September 11. We see small signs of a rebound everywhere, and I am encouraged by that.
6)What, if any, changes are being made on your Web site to reflect the new travel climate? Are you doing anything extra to entice travelers to visit the site? To book on the site?
We have accelerated our Customer Care program by making relevant travel information as important an element of our site as airfare information. Today 20,000 to 60,000 travelers a day are using Orbitz Care Alerts to receive electronic updates on their mobile phones, e-mail, pagers, or other devices. We update travelers not just about their flight status, but also about weather conditions, air traffic, gate changes, and so forth. Within 15 minutes after the FAA closed all U.S. airports on September 11, for example, Orbitz was able to inform the nearly 20,000 Orbitz travelers who were impacted. We got calls and e-mails from customers thanking us because they were getting ready to go to the airport and hadn't realized how this would affect their travel plans. Information about everything from airport security procedures to check-in wait times to airport parking has become as important as getting the best price on an airline ticket. We also have this kind of information on Orbitz in our Travel Watch section.
7)What do you see as the future of on-line booking?
On-line travel is already approaching $20 billion a year in bookings and growing fast. So it has a strong present and a stronger future. I don't believe that everyone will convert to on-line booking, but it's a service that was made for the Internet the way I Love Lucy was made for TV. The breadth of shopping that's possible and the quality of customer service that is being developed will continue to make travel sites like Orbitz very useful ways to buy travel. I am very optimistic.
8)What do your main competitors, Travelocity and Expedia, do well?What does Orbitz do better?
Our competitors are good companies. We applaud their success. However, Orbitz is the only place you can go if you want to see the most low fares in a completely unbiased display. Ours is the first site built from scratch for the Internet, so Orbitz is easier to use, and it's backed by the world's leading airlines. It's our most-low-fares, customer-comes-first approach that customers tell us we "do right."
9)Tell us about the new $5 service fee on airline tickets purchased at Orbitz.
After lots of market research we learned that our customers really value the fact that Orbitz offers the most low airfares and is the only site on the Web that is unbiased (we do not show any preference to any airline, car rental, or hotel company). The research made it clear that customers are willing to pay a small fee if they know they are getting a good value. And studies show that Orbitz meets or beats the fares of other leading travel sites 80 percent of the time, saving customers an average of $75 a ticket. Since we implemented the fee, sales have continued to be strong.
10)Is there anything that could stop you from traveling?
Nope. I am the combination of a hobo and Marine Corps grunt; I'm always on the road. My 90-year-old uncle travels 200,000 miles a year. He says he knows if he keeps traveling, he'll keep living. It's like that for me. I tell people, "Go ahead and travel, you will enjoy it."
—Interviewed by Robert Maniaci