Travelocity is a subsidiary of Sabre Holdings Corp., which also provides services to travel agents and airline companies through its Sabre Travel Network and Sabre Airline Solutions divisions.

Last week, Expedia Inc. announced a deal that cancels booking fees on flights through May 31. The company was following in the footsteps of Priceline, which has gained market share since removing its air booking fees nearly two years ago.

Late Tuesday, Citi Investment Research analyst Mark Mahaney said Travelocity's new move counters the benefits of Expedia's promotion, which now may hurt the company's profits without significantly boosting market share.

Get the full story at MSN Money