How many online travel sites are there?
The main players in the UK are Ebookers.com, Lastminute.com and Online Travel Corporation, which owns a range of sites including Deckchair.com and former Emap properties Bargainholidays.com and a2btravel.com.
There are also a large number of independent operations such as Cheapflights.com that compile the best-value fares from a wide variety of sources.
In addition, major US sites such as Expedia and Travelocity also have UK operations. Travelocity recently announced a deal with German marketing giant Otto to set up a separate European joint venture.
The major airlines all have their own online booking engines, with low-fare airlines such as Ryanair, Easyjet and Buzz encouraging users to book online to keep costs down.
Last month eight of Europe's leading airlines clubbed together to launch Opodo, an online service selling flights and other travel products direct. The joint venture involves Aer Lingus, Air France, Alitalia, Austrian Airlines, British Airways, Finnair, Iberia, KLM and Lufthansa.
Opodo.com was set to launch in Germany in December and throughout Europe in the early part of next year. However, it is understood the scheduled launch may be put back due to the recent difficulties.
On top of that, all the major travel agents such as Thomas Cook and Lunn Poly, and many smaller ones, maintain websites, with most offering online booking.
How much money do they make?
The industry is currently worth £3.7bn worldwide according to Forrester Research and is forecast to grow by 150% annually to £24.9bn in 2005. In the UK, it is predicted to reach £3.7bn by 2005, 14% of total travel sales.
What other travel business is there online?
A wide range of sites offer travel advice, the best known being offline guide book publishers such as Lonely Planet, Rough Guide and Fodors. Most seek to make money from advertising and selling copies of the books online.
There are also car hire services like Easyrentacar.com, companies specialising in short breaks such as Webweekends.com and domestic travel services such as Thetrainline.com.
Is the online travel business facing the same fate as the airlines?
Travel sites are hoping that the success of Ryanair and Easyjet in encouraging people to use book flights online, and so keep costs down, will encourage other airlines to follow suit.
Mark Jones, the chief executive of Online Travel Corporation, said in the week following the attack: "We're the sort of organisation airlines will look to for help. We can be very reactive in pricing changes and help to rebuild consumer confidence. The recent amounts of activity on sites like BargainHolidays.com would seem to bear that out."
Travel sites will not be hit as hard as the airlines immediately, as the effects take time to filter through.
Those based in Europe will obviously not be as badly affected as those with US parent companies. Most of the European sites insist that less than 5% of their business comes from flights to the US.
And those sites that rely on business travel will be hit harder than those that deal mainly with leisure.
However, most analysts agree that the sector is still far too crowded and the reluctance of people to travel after the events of September 11 will only exacerbate the situation.
With most forced to cut the profit they make from each booking to the bone in order to compete with other sites they are left relying on advertising and sponsorship revenue, which is also scarce at the moment.
A further problem will arrive with the launch of Opodo.com, which will allow airlines to offer cheap flights directly. It remains to be seen whether they will still go through online agents to offer special deals.
Who will survive and who is on the critical list?
A straw poll of City and technology analysts suggests that Lastminute.com has enough cash in the bank to survive the crisis and that Travelocity and Expedia are now big enough brand names, and pull in enough revenues, to see through the difficult period. Lastminute continues to insist that it will be profitable by next year.
Online Travel Corporation has followed a sensible strategy of picking up a varied portfolio of sites that all have a good following, say analysts. However, it has overpaid for some of its acquisitions and its business-to-business arm is likely to suffer, predict analysts.
All other sites, particularly those that have neither a critical mass of users or other revenue streams, are under threat. More consolidation is inevitable.
Also particularly under threat are those sites that tried to introduce a new revenue model such as "name your own price" site Priceline.com. As consumers go for more trusted brand names to ease safety fears, passengers will want to know what airline they're booked onto.
What's the long-term outlook?
Forrester predicts that despite a difficult year in 2002 those online travel agents that survive will be in a strong position. The web is the cheapest way to reach consumers and people buying travel online spend more and travel more often.
The company also says those sites that offer flights, holidays, hotels and car rental from a single site will ultimately be best off and over time brand loyalty will increase.
However, to survive they will have to improve their customer service and booking systems. According to a Forrester survey in February this year, only three in 10 travel sites allow users to book their holiday online.
