UPDATE 3-Orbitz posts loss, sees revenue decline; shares plunge

* Q4 loss/shr $0.21 vs EPS $0.10 a year ago

* Sees Q1 net rev declining 2-6 pct

* Shares fall 16 pct

(Adds company comment)

NEW YORK, Feb 23 (Reuters) - Online travel agency Orbitz Worldwide (OWW.N) swung to a quarterly loss and forecast a decline in first-quarter revenue because of concessions offered on booking fees, sending its shares down as much as 17 percent.

Online travel agencies like Orbitz, Priceline.com (PCLN.O) and Expedia Inc (EXPE.O) have been offering fee waivers to spur bookings as the recession crimped demand for business and leisure trips.

For the first quarter, the company said it expects net revenue to decline 2 percent to 6 percent from a year ago as it removed most of the domestic air booking fees and also reduced hotel booking fees.

Amid the sell-off in Orbitz shares, Chief Executive Barney Harford told the Reuters Travel and Leisure Summit that those fee removals were spurring business.

"The removal of flight booking fees and the removal of hotel cancellation fees .... is here to stay," Harford said. "We think it is one of a number of factors that is driving the acceleration in our transaction trends."

The company, which owns major travel sites Orbitz.com and Cheaptickets.com, posted a net loss of $18 million, or 21 cents a share, for the fourth quarter, compared with net income of $8 million, or 10 cents a share, a year earlier.

Net revenue fell 3 percent to $175 million due primarily to the removal of domestic air booking fees, the company said. Gross bookings rose 17 percent despite lower airfares and lower room rates, and transaction growth was 19 percent in the fourth quarter.

Analysts on average expected a loss of 4 cents a share, on revenue of $156.2 million, according to Thomson Reuters I/B/E/S.

In a note to clients, Stifel Nicolaus analyst George Askew said general and administrative costs and marketing expenses rose sequentially as a percentage of revenue.

"Orbitz will continue to face aggressive competition in the U.S. and in other global markets, and we believe that marketing expenses will continue to rise as a percentage of revenue," Askew added.

Shares of the company fell 15.6 percent to $6.05 on the day, making the stock the the biggest loser on the New York Stock Exchange. Rival Priceline.com fell 1.7 percent to $225.09, while Expedia was up 4 cents to $22.42.

(Reporting by Bijoy Koyitty in Bangalore with added reporting by Ernest Scheyder, Kyle Peterson and Karen Jacobs in New York; Editing by Saumyadeb Chakrabarty, Phil Berlowitz)