Ebookers still travelling the path to profitability

Ebookers' year-on-year sales have doubled, and with the number of visitors increasing it is confident of a sunny future
Written by Graeme Wearden, Contributor

British travel Web site Ebookers has promised that it will break even within 12 months, after announcing first-quarter sales that doubled those of a year ago.

Ebookers recorded a pre-tax loss of £8.3m in the first three months of 2001, compared to a £7m loss for the same period a year ago. However, at £42.3m, sales for Q1 2001 represented a 42 percent increase on the final three months of last year.

The company still has cash assets of over £30m. Its cash burn rate is expected to fall below £1m a month in the second half of this year, making Ebookers confident that it is still be on track to become cash flow positive by Q1 2002 if not by the end of this year. Shares in Ebookers, which is listed on both the Nasdaq and on the London Stock Exchange, rose 16 percent in London after the results were announced.

The positive news is a contrast to the many dot-coms, such as rival travel site Deckchair.com, who have been laying off staff in response to a sector-wide slump.

Ebooker's chief executive officer Dinesh Dhamija puts the company's success down to its strong links with the travel companies whose products it sells. "Ebookers.com focuses on negotiated merchant inventory which has higher average margins than standard published tickets," Dhamija said in a statement, adding that "our average transaction size remains over twice the size of all major competitors".

Over ten million people have visited Ebookers so far this year, compared to the nearly four million visitors for the first quarter of 2000, but Dhamiji wouldn't encourage all other dot-coms to take comfort in this growth. "Our strong traffic growth is evidence of the suitability of the internet for the sale of travel, in comparison to many other business to consumer e-commerce sectors," Dhamiji said.

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