Asfiled with the Securities and Exchange Commission on March 25,2004

UNITED STATES SECURITIES AND EXCHANGECOMMISSIONWASHINGTON, D.C. 20549

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FORM 20-F

ANNUAL REPORTPURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

For the fiscal year ended December 31, 2003

Commission file number: 0-30358

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ebookers plc

(Exact name of Registrant as specified in itscharter)

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Englandand Wales

(Jurisdiction of incorporation)

25 Farringdon Street, London EC4A 4AB, England

(Address of principal executive offices)

Securitiesregistered or to be registered pursuant to Section 12(b) of the Act:None

Securities registered or to be registeredpursuant to Section 12(g) of the Act: None

|                                                                                       |  |                                     |  |  |  |  |
|---------------------------------------------------------------------------------------|--|-------------------------------------|--|--|--|--|
| Titleof each class                                                                    |  | Name of exchange on whichregistered |
| Ordinary Shares, nominal value£0.14each                                         |  | NasdaqNational Market               |
| American Depositary Shares, eachrepresenting the right to receive two Ordinary Shares |  | NasdaqNationalMarket                |
|                                                                                       |

**Securities forwhich there is a reporting obligation pursuant to Section 15(d) of theAct: None**

**Indicate the number of outstanding shares ofeach of the issuer's classes of capital or common stock as of theclose of period covered by the Annual Report:**

64,931,348 Ordinary Shares of 14 pence each

**Indicate by check mark whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90days.**

Yes     No 

**Indicate by check mark which financial statement item theregistrant has elected to follow.**

Item 17        Item 18

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TABLE OF CONTENTS

|                                              |  |                                                                            |     |        |    |        |  |  |  |  |
|----------------------------------------------|--|----------------------------------------------------------------------------|-----|--------|----|--------|--|--|--|--|
| PARTI                                        |  |                                                                       | 4   |   |
| ITEM1.                                       |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENTAND ADVISORS                       |     |   | 4  |   |
| ITEM 2.                                      |  | OFFERSTATISTICS AND EXPECTED TIMETABLE                                     |     |   | 4  |   |
| ITEM3.                                       |  | KEY INFORMATION                                                            |     |   | 4  |   |
| ITEM4.                                       |  | INFORMATION ON EBOOKERS PLC                                                |     |   | 20 |   |
| ITEM 5.                                      |  | OPERATING AND FINANCIAL REVIEW ANDPROSPECTS                                |     |   | 40 |   |
| ITEM 6.                                      |  | DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES                                  |     |   | 53 |   |
| ITEM7.                                       |  | MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS                           |     |   | 66 |   |
| ITEM 8.                                      |  | FINANCIALINFORMATION                                                       |     |   | 67 |   |
| ITEM 9.                                      |  | THE OFFERAND LISTING                                                       |     |   | 68 |   |
| ITEM 10.                                     |  | ADDITIONALINFORMATION                                                      |     |   | 69 |   |
| ITEM11.                                      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK                  |     |   | 76 |   |
| ITEM 12.                                     |  | DESCRIPTION OFSECURITIES OTHER THAN EQUITY SECURITIES                      |     |   | 77 |   |
| PART II                                      |  |                                                                       | 78  |   |
| ITEM13.                                      |  | DEFAULTS, DIVIDEND ARREARAGES ANDDELINQUENCIES                             |     |   | 78 |   |
| ITEM 14.                                     |  | MATERIALMODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OFPROCEEDS |     |   | 78 |   |
| ITEM 15.                                     |  | CONTROLS ANDPROCEDURES                                                     |     |   | 78 |   |
| ITEM 16 A.                                   |  | AUDITCOMMITTEE FINANCIAL EXPERT                                            |     |   | 78 |   |
| ITEM 16B.                                    |  | CODE OF ETHICS                                                             |     |   | 78 |   |
| ITEM 16C.                                    |  | PRINCIPAL ACCOUNTANT FEES ANDSERVICES                                      |     |   | 78 |   |
| PARTIII                                      |  |                                                                       | 80  |   |
| ITEM 17.                                     |  | FINANCIALSTATEMENTS                                                        |     |   | 80 |   |
| ITEM 18.                                     |  | FINANCIALSTATEMENTS                                                        |     |   | 80 |   |
| ITEM19.                                      |  | EXHIBITS                                                                   |     |   | 81 |   |
| INDEX TO CONSOLIDATED FINANCIALSTATEMENTS    |  |                                                                       | F-1 |   |
| INDEPENDENT AUDITORS'REPORT                  |  |                                                                       | F-2 |   |
| CONSOLIDATEDBALANCE SHEETS                   |  |                                                                       | F-3 |   |
| NOTESTO THE CONSOLIDATED FINANCIALSTATEMENTS |  |                                                                       | F-8 |   |
|                                              |

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PRESENTATION OFFINANCIAL AND OTHER INFORMATION

In this Annual Report,references to "$,""U.S.$," "U.S.dollars," and "dollars" are tothe currency of the United States, and reference to"pounds sterling,""pounds,""£," "pence,"and "p" are to the currency of the UnitedKingdom. This report contains translations of pounds sterling amountsinto U.S. dollars at specified rates solely for the convenience of thereader. No representation is made that the amounts referred to in thisreport as convenience translations could have been or could beconverted from pounds sterling into U.S. dollars at these rates, or atall. Unless otherwise indicated all translations in this report ofpounds sterling amounts into U.S. dollars are at the rate of£1.00:$1.7842 which was the noon buying rate in New York City forcable transfers in pounds sterling as certified for customs purposes bythe Federal Reserve Bank of New York on December 31, 2003. The noonbuying rate on March 19, 2004 was £1.00:$1.8270. See"Item 3 – Exchange RateInformation" for historical information regarding thenoon buying rate for pounds sterling.

We maintain our financialbooks and records in pounds sterling and present our financialstatements in conformity with accounting principles generally acceptedin the United Kingdom ("U.K. GAAP") andaccounting principles generally accepted in the United States ofAmerica ("U.S. GAAP"). The consolidatedfinancial statements appearing in this Annual Report are prepared inaccordance with U.S. GAAP. The presentation of the share informationcontained in this Annual Report for the financial year ended December31, 2003, 2002, 2001, 2000 and 1999 has been adjusted to reflect the 25for 7 share split which occurred in November 1999, the 10 for 1 sharesplit which occurred in April 2000 and the 5 for 1 share consolidationwhich occurred in April 2001. As of December 31, 2003 our issued sharecapital was 64,931,348 ordinary shares and as of March 19, 2004 it was64,975,958.

This Annual Report includes statistical dataregarding ebookers, the internet and the industries in which weoperate. This includes information published or prepared by theInternational Air Transport Association("IATA"). The number of travel agentsaccredited by IATA in Western Europe, and the breakdown by countrydescribed elsewhere in this Annual Report, is obtained from IATA.

This annual report refers throughout to the term "grosssales". Gross sales is a measure that represents the totaltransaction value of all our services and hence includes the totalamount paid by customers for the services booked by us, as opposed tothe margin we earn on products and services, which is the manner inwhich our revenue is calculated. Management believes that gross salesis a useful measure as it is widely used throughout the travel industryby companies and financial analysts as a way of tracking company size.Additionally, many travel suppliers give incentives to travel agenciesbased on gross sales performance.

FORWARD-LOOKINGSTATEMENTS

This document includes statements that we believeconstitute forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995 and Section 21E of the USSecurities Exchange Act of 1934. We have based these forward-lookingstatements on our current expectations and projections about futureevents. These forward-looking statements appear throughout thisdocument and are subject to risks, uncertainties and assumptions aboutus, which are difficult to predict.

Words like"believe,""anticipate,""expect," "intend,""seek," "will,""plan," "could,""may," "might,""project," "goal,""target," and similar expressions oftenidentify forward-looking statements but are not the only way weidentify these statements.

These statements may be found in thesections of this Annual Report entitled "Information onebookers plc", "Risk Factors","Operating and Financial Review andProspects", "Regulation" and inthis Annual Report generally. Our actual results could differmaterially from those anticipated in these forward-looking statementsas a result of various factors, including all the risks discussed in"Risk Factors", "Operating andFinancial Review and Prospects" and"Regulation". You should understand that anumber of important factors could cause our actual results to differmaterially from the plans, objectives, expectations, estimates andintentions expressed in such forward-looking statements. These

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factors include increased competition fromairlines, international conflict, public health crises, our ability toidentify, acquire and integrate companies across Europe, including ouracquisition of Travelbag Holdings Ltd., our ability to significantlyincrease our online revenues including those of acquired non-internetcompanies including Travelbag Holdings Ltd., significant risksassociated with transferring European business functions to our IndianBusiness Process Outsourcing facility and with servicing third partyclients there, a decline in the supply of merchant airfares availableto us, a failure of our computer and communications systems, adversedevelopments in U.K. or other European governmental regulation orelectronic commerce or the impact of terrorist activity on us and thetravel industry as a whole.

The foregoing list of importantfactors is not exhaustive and when relying on forward-lookingstatements, you should carefully consider the foregoing factors andother uncertainties and events. Such forward-looking statements speakonly as of the date on which they are made.

Except as requiredby the rules of the United Kingdom Listing Authority, the London StockExchange and applicable law, we undertake no obligation to updatepublicly or revise any forward-looking statements, whether as a resultof new information, future events or otherwise. In light of theserisks, uncertainties and assumptions, the forward-looking eventsdiscussed in this Annual Report might not occur.

The informationon our website, any website mentioned in this Annual Report or anywebsite directly or indirectly linked to our or any other websitementioned in this Annual Report, is not incorporated by reference intothis Annual Report and you should not rely onit.

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PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT ANDADVISORS

Not applicable.

ITEM 2.    OFFER STATISTICSAND EXPECTED TIMETABLE

Not applicable

ITEM 3.    KEYINFORMATION

3.A.    Selected Financial Data

Theselected historical financial data set forth below should be read inconjunction with the "Operating and Financial Review andProspects" section of this Annual Report and withreference to the consolidated financial statements and notes theretoincluded elsewhere in this Annual Report. The selected historicalfinancial data as at December 31, 2003 and 2002 and for each of thethree years in the period ended December 31, 2003 have been derivedfrom our audited financial statements included elsewhere in this AnnualReport which have been prepared in accordance with U.S. GAAP. Theselected historical financial data as at December 31, 2001, 2000 and1999 and for each of the two years in the period ended December 31,2000 have been derived from our audited financial statements notincluded herein which have been prepared in accordance with U.S. GAAP.All periods presented here have been audited by Deloitte & ToucheLLP, our independent auditors.

The financial data included inthe table set forth below has been reclassified to include charges tocustomers for the right to use a credit card when paying for a purchasewithin revenues, as opposed to as an offset to sales and marketingexpenses. This reclassification was due to the fact that the Companyacts as a principal in the credit card transaction. The impact onrevenues and sales and marketing expenses for all periods affected isasfollows:

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| Period                                                           |  | Aspreviouslyreported |        | Reclassified |
|                                                             |  | (£millions)    |
| Revenue                                                          |  |                 |   |         |  |   |   |   |
| Yearended December31,                                            |  |                 |   |         |  |   |   |   |
|   2002                                                 |  |                 | 31.8   |         |  |   | 32.6   |   |
|           2001 |  |                 | 19.4   |         |  |   | 19.7   |   |
|           2000 |  |                 | 9.7    |         |  |   | 9.9    |   |
|           1999 |  |                 | 2.1    |         |  |   | 2.3    |   |
|                                                             |  |                 |   |         |  |   |   |   |
| Marketingand Sales Expenses                                      |  |                 |   |         |  |   |   |   |
| Yearended December31,                                            |  |                 |   |         |  |   |   |   |
|           2002 |  |                 | 15.7   |         |  |   | 16.5   |   |
|           2001 |  |                 | 19.0   |         |  |   | 19.3   |   |
|           2000 |  |                 | 19.8   |         |  |   | 20.0   |   |
|           1999 |  |                 | 2.9    |         |  |   | 3.1    |   |
|                                                                  |

Solelyfor the convenience of the reader, the financial data for the mostrecent financial year is also expressed in U.S. dollars translated at arate of £1.00 : $1.7842, which was the noon buying rate onDecember 31, 2003. On March 19, 2004, the noon buying rate was£1.00 : $1.8270.

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The following table sets forth our selectedhistorical financial data at December 31, 2003, 2002, 2001, 2000 and1999.

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|---------------------------------------------------|--|-----------------------------------------|---------|------------------------------------------------------------------------|--|--------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                              |  | Yearended December31,                   |
|                                              |  | 2003                                    |         | 2003                                                                   |  | 2002   |        | 2001    |  | 2000   |         | 1999    |
|                                              |  | (in$millions,exceptshareinformation)(2) |         | (in £millions, except share information)     |
| **Consolidated statements of operationsdata:**    |  |                                    |    |                                                                   |  |   |   |    |  |   |    |    |  |   |    |    |  |   |    |    |  |   |    |    |
| Totalrevenue(3)                                   |  |                                    | 118,621 |                                                                   |  |   | 66,485 |    |  |   | 32,579  |    |  |   | 19,735  |    |  |   | 9,867   |    |  |   | 2,354   |    |
| Operating loss                                    |  |                                    | (17,439 | )                                                                 |  |   | (9,773 | )  |  |   | (19,665 | )  |  |   | (25,544 | )  |  |   | (24,245 | )  |  |   | (12,793 | )  |
| Net loss                                          |  |                                    | (12,358 | )                                                                 |  |   | (6,926 | )  |  |   | (18,958 | )  |  |   | (24,957 | )  |  |   | (22,402 | )  |  |   | (12,565 | )  |
| Historical basic and diluted net lossper share(1) |  |                                    | (0.20   | )                                                                 |  |   | (0.11  | )  |  |   | (0.39   | )  |  |   | (0.54   | )  |  |   | (0.59   | )  |  |   | (0.45   | )  |
| Dividends declared per share                      |  |                                    | 0.00    |                                                                   |  |   | 0.00   |    |  |   | 0.00    |    |  |   | 0.00    |    |  |   | 0.00    |    |  |   | 0.00    |    |
|                                                   |

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|---------------------------------------------------------|--|-----------------------------------------|------------|------------------------------------------------------------------------|--|--------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--|
|                                                    |  | Yearended December 31,                  |
|                                                    |  | 2003                                    |            | 2003                                                                   |  | 2002   |            | 2001   |  | 2000   |            | 1999   |
|                                                    |  | (in$millions,exceptshareinformation)(2) |            | (in £millions, except share information)     |
| **Consolidated balancesheet:**                          |  |                                    |       |                                                                   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |
| Totalassets                                             |  |                                    | 277,060    |                                                                   |  |   | 155,285    |   |  |   | 44,370     |   |  |   | 44,703     |   |  |   | 64,745     |   |  |   | 39,835     |   |
| Long-termliabilities                                    |  |                                    | 49,972     |                                                                   |  |   | 28,008     |   |  |   | —    |   |  |   | —    |   |  |   | —    |   |  |   | —    |   |
| Netassets                                               |  |                                    | 105,574    |                                                                   |  |   | 59,171     |   |  |   | 16,693     |   |  |   | 16,304     |   |  |   | 39,962     |   |  |   | 32,442     |   |
| Capitalstock (not including additional paid in capital) |  |                                    | 16,219     |                                                                   |  |   | 9,090      |   |  |   | 7,009      |   |  |   | 6,557      |   |  |   | 6,340      |   |  |   | 4,766      |   |
| Number ofshares issued and outstanding                  |  |                                    | 64,931,348 |                                                                   |  |   | 64,931,348 |   |  |   | 50,061,736 |   |  |   | 46,833,516 |   |  |   | 45,289,528 |   |  |   | 34,045,564 |   |
|                                                         |

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| (1) | Dilutednet loss per share is based upon the weighted average number of commonand potential common shares for each period presented. Potential commonshares include stock options using the treasury stock method. Potentialcommon shares have been excluded from diluted weighted average commonshares for fiscal years when the effect would be anti-dilutive. Thepresentation of the share information has been adjusted to reflect our25 for 7 share split (November 1999), our 10 for 1 share split (April2000) and our 5 for 1 share consolidation (April  2001). |
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| (2) | Solely for the convenience of the reader,the financial data for the most recent financial year is also expressedin US dollars translated at a rate of £1.00: $1.7842, which wasthe noon buying rate on December 31, 2003. On March 19, 2004, the noonbuying rate was £1.00 : $1.8270. |
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| (3) | The comparative information has beenrestated to reflect the change in credit card revenue classificationreferred to above. |
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Dividend Policy

We have never paid cash dividends to ourshareholders, and we currently do not expect to pay dividends for theforeseeable future. We expect that all available cash from operationswill be used to finance the growth and development of our business, tomeet our projected capital and other expenditure requirements and tofund our operating losses.

Exchange Rate Information

Aproportion of our assets, liabilities, revenues and expenses aredenominated in currencies other than pounds sterling. Accordingly,fluctuations in the value of pounds sterling relative to othercurrencies can have a significant effect on the translation intosterling of non-sterling assets, liabilities, revenues and expenses.Fluctuations in the exchange rate between the pound sterling and theU.S. dollar will affect, among other things, our revenue, operatingresults and the price of our shares on the London Stock Exchange, aswell as the price of our American Depositary Receipts("ADRs") on the Nasdaq National Market. Thefollowing table shows, for the periods and dates indicated, certain

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information regarding the U.S. dollar perpounds sterling exchange rate, based on the noon buying rate, expressedin U.S. dollars per poundssterling.

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|--------------------|--|-----------|--------|--------------|--|--------|--------|--------|--|--------|--------|--------|--|--------|--------|--------|--|--|
|               |  | Periodend |        | Average rate |  | High   |        | Low    |
|               |  | (in$)     |
| **FiscalYear**(1)  |  |      |   |         |  |   |   |   |  |   |   |   |  |
| 1999               |  |      | 1.6150 |         |  |   | 1.6171 |   |  |   | 1.6765 |   |  |   | 1.5515 |   |
| 2000               |  |      | 1.4935 |         |  |   | 1.5156 |   |  |   | 1.6538 |   |  |   | 1.3997 |   |
| 2001               |  |      | 1.4543 |         |  |   | 1.4396 |   |  |   | 1.5045 |   |  |   | 1.3730 |   |
| 2002               |  |      | 1.6095 |         |  |   | 1.5084 |   |  |   | 1.6095 |   |  |   | 1.4074 |   |
| 2003               |  |      | 1.7842 |         |  |   | 1.6347 |   |  |   | 1.7842 |   |  |   | 1.5500 |   |
| **PriorMonths**(2) |  |      |   |         |  |   |   |   |  |   |   |   |  |
| September2003      |  |      | 1.6620 |         |  |   | 1.6155 |   |  |   | 1.6642 |   |  |   | 1.5732 |   |
| October2003        |  |      | 1.6956 |         |  |   | 1.6792 |   |  |   | 1.7025 |   |  |   | 1.6598 |   |
| November2003       |  |      | 1.7219 |         |  |   | 1.6897 |   |  |   | 1.7219 |   |  |   | 1.6693 |   |
| December2003       |  |      | 1.7842 |         |  |   | 1.7516 |   |  |   | 1.7842 |   |  |   | 1.7200 |   |
| January2004        |  |      | 1.8215 |         |  |   | 1.8255 |   |  |   | 1.8511 |   |  |   | 1.7902 |   |
| February2004       |  |      | 1.8575 |         |  |   | 1.8673 |   |  |   | 1.9045 |   |  |   | 1.8182 |   |
|                    |

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| (1) | Theaverage rate is the average of the noon buying rates in New York Cityfor cable transfers in pounds sterling as certified for customspurposes by the Federal Reserve Bank of New York on the last workingday of each month during the period. |
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| (2) | The average rate is the average of thenoon buying rates in New York City for cable transfers in poundssterling as certified for customs purposes by the Federal Reserve Bankof New York during the period. |
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3.B    Capitalization andIndebtedness

Not applicable.

3.C    Reasons for theoffer and use of proceeds

Not applicable.

3.D    RiskFactors

In addition to the other information contained inthis Annual Report, investors should consider carefully the risksdescribed below. Our business, financial condition, cash flows andresults of operations could be materially adversely affected by suchrisks. Additional risks not presently known to us or that we currentlydeem immaterial may also impair our business operations. This AnnualReport also contains forward-looking statements that involve risks anduncertainties. Our results could materially differ from thoseanticipated in these forward-looking statements as a result of certainfactors, including the risks we face as described below and elsewhere.See "Forward-Looking Statements" on page2.

Risks Related To Our Business

Declines or disruptions in the travel industry, suchas those caused by terrorism, military conflict, unusual weather,public health crises, or general economic downturns, could reduce ourrevenues

Travel is highly sensitive to traveler safety concerns,and thus can decline before the possibility of and after acts ofterrorism or military conflict that affect the safety or the perceptionof safety of travelers. For example, the terrorist attacks of September11, 2001 on the World Trade Center and the Pentagon in the UnitedStates using hijacked commercial airliners resulted in the cancellationof a significant number of our existing travel bookings and a decreasein new travel bookings through ebookers, all of which reduced ourrevenues and profitability for the quarters ended September 30, 2001and December 31, 2001. Despite ebookers' revenues recoveringduring 2002 from the effect of 

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September 11, 2001, in the first quarter of2003 we believe that our revenues, including those of TravelbagHoldings Limited ("Travelbag Holdings" or"Travelbag"), the company we acquired inFebruary 2003, suffered as a result of the outbreak of militaryhostilities in Iraq. The geopolitical environment is increasinglyuncertain and it is possible that ebookers' business could sufferfrom the outbreak of any military conflict or terrorist activity. Thelong-term effects of this type of geopolitical event could include,among other things, a protracted decrease in demand for air travel dueto fears of additional acts of terrorism, military response to acts ofterrorism and increased costs and reduced operations by airlines due,in part, to new security directives adopted by aviation regulatorsaround the globe. These effects, depending on their scope and duration— which we cannot predict at this time — may significantlyimpact our long-term results of operations and financial condition.

An additional risk to the travel industry and to our business ispublic health crises, such as that of Severe Acute RespiratorySyndrome, or SARS, which first became widely publicized in February2003. We believe that SARS negatively impacted our revenuestowards the end of March 2003 and continued to have an impact in thesecond quarter of 2003. Travel destinations most affected were HongKong, Singapore, China and Canada. Hong Kong and Singapore are alsoimportant stop-over destinations for our key Australian travel routes.We believe that both ebookers and its acquisition, Travelbag, wereaffected by SARS. Governments in affected countries have taken measuresto contain the SARS virus and it would appear on the basis of pressreports that the disease has now been contained. However, it ispossible that SARS outbreaks could reoccur and similar public healthcrises could occur in the future.

In addition, travel issensitive to business and personal discretionary spending levels andtends to decline during general economic downturns, which could alsoreduce our revenues. Other adverse trends or events that tend to reducetravel and may reduce our revenues include:

|              |                        |
|--------------|------------------------|
| •  | political instability; |

|              |                    |
|--------------|--------------------|
| •  | airlinebankruptcy; |

|              |                       |
|--------------|-----------------------|
| •  | regional hostilities; |

|              |                                                                             |
|--------------|-----------------------------------------------------------------------------|
| •  | price escalation in the airline industryor other travel-related industries; |

|              |                                                  |
|--------------|--------------------------------------------------|
| •  | increased occurrence of travel-relatedaccidents; |

|              |                                             |
|--------------|---------------------------------------------|
| •  | airline or othertravel-related strikes; and |

|              |                                                                                                                                                                                                                                                                                                    |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | unusualweather. For example we believe that our revenues were adverselyaffected in the summer of 2003, as unusually hot weather in Europe mayhave persuaded some of our would-be long and mid-haul customers toenjoy the hot weather at home, or to go to short-haul Europeandestinations instead. |

We may not be able tosuccessfully complete the integration of Travelbag or futureacquisitions into ebookers plc (the"Company") and its subsidiaries the("Group") or grow the online sales of thesecompanies.

In recent years, we have expanded across Europepartly through acquisitions. While we have made substantial progress inintegrating the majority of these acquisitions, this process is not yetcomplete. In February 2003, we acquired Travelbag Holdings which was amuch larger acquisition than any made to date and as such presentedhigher risks than previous acquisitions. Our integration aims includedthe need to achieve significant product synergies, combine the headoffice of Travelbag and ebookers, integrate technology whereappropriate, move functions to our Business Process Outsourcing("BPO") facility in India, grow the internetsales of Travelbag using ebookers' technology and develop asuccessful multi-brand strategy. We believe that we have madesignificant progress with the integration; however it is not yet fullycomplete and while we have previous experience integratingacquisitions, the size of Travelbag will continue to requiresignificant management time, attention and expertise. We also need tocontinue to motivate and retain key Travelbag personnel within theGroup in order to preserve continuity within the acquired business.

Additionally, we have stated our intention to make further Europeanacquisitions to grow our business, particularly outside of the UnitedKingdom, which is currently our largest market. We could 

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have difficulty in assimilating an acquiredcompany's personnel, operations, products, services ortechnologies into our own. Even though we perform careful investigationprior to making acquisitions, we may still find that our business isincompatible with that of the companies we have acquired. Furthermore,the management time required to deal with issues arising from ouracquisitions may negatively impact our ability to manage the remainderof our business.

Our computer and communicationssystems could fail or be disabled which could prevent us fromresponding to our customers and result in our not being able to carryon our business

Our ability to receive and fulfil orders onlineand via the telephone and provide high-quality customer service largelydepends on the efficient and uninterrupted operation of our computerand communications systems. Our key servers including those hosting oure-commerce website, a mid-office system and our telephone system areall in one of two locations. We do not have contingency back up systemsat alternative sites. A disaster, such as a power loss, computerviruses, telecommunications failures, break-ins, natural disasters,hacking, "denial-of-service" attacks, inwhich large streams of requests are sent to a target website with theintention of flooding the target server until it is disabled, orsimilar events, could severely damage our business, prospects,financial condition and results of operations, because our servicescould be interrupted or delayed, data could be lost, or we might not beable to accept and confirm customer reservations. If our website wasdisabled for a significant period of time, our online business wouldeffectively cease to operate until the problem was corrected and wecould lose both customers and customer confidence in the security ofour systems. We would, however, expect many customers to use ourtelephone booking capability if our website was not functional.

We may not be able to successfully run our business ona multi-national basis

We have websites in 13 Europeancountries, physical operations in 11 European countries and a BPOfacility in New Delhi, India. As a result, our business faces greatercomplexities and challenges than if we operated in a single country. Ifour management fails to deal with these complexities and challenges,this may significantly impact our long-term results of operations andfinancial condition. Potential risksinclude:

|              |                                                                              |
|--------------|------------------------------------------------------------------------------|
| •  | management difficulties due todistance and cultural and languagedifferences; |

|              |                            |
|--------------|----------------------------|
| •  | exchange ratefluctuations; |

|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| •  | failure to graspdiffering cultural and consumer differences between customers withineach country; |

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | delay in uptake of theinternet in some markets; |

|              |                                |
|--------------|--------------------------------|
| •  | tariffs andtrade barriers; and |

|              |                                    |
|--------------|------------------------------------|
| •  | regulatory changesand differences. |

We do not expect to producesubstantial income in the short-term and may incur losses

Ourlong-term prospects depend on our ability to be a major participant inthe European online travel market. For several years to come, our toppriority will be the growth and further development of our businessacross Europe. We expect to continue to invest in developing ourwebsites, technology and operating infrastructure and may acquireadditional companies in other European countries. As a result, we donot expect to produce substantial income in the short-term and ifunforeseen circumstances occur, we may continue to incur losses. Inorder to raise money for further investment in our business we may needto issue more shares or incur debt. We may be unable to secureadditional financing and our business prospects could be adverselyaffected if we are not able to raise adequate additional capital whenwe need it or on acceptable terms. If our revenues grow more slowlythan we anticipate, or if our operating expenses are greater than weexpect, we may not be able to grow our business as desired andultimately we may be unable to continue to operate our business.

Our quarterly revenues may fluctuate significantly,which could lead to unexpected revenue shortfalls

Travel isaffected by seasonal consumer demands and therefore our revenues havehistorically fluctuated significantly. In February 2003 we acquiredTravelbag Holdings. Its range of long haul travel 

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products was partly counter-cyclical to ourexisting business and therefore has had the effect of reducing some ofthe seasonal fluctuation of our revenues. However there is still someseasonality. For example, we believe our weakest seasonal quarter isnow the April-June quarter. Additionally our business has historicallydemonstrated high internet-driven growth. We believe that internetgrowth is more important than seasonality in determining changes in ourquarterly revenues. In addition, during periods when many people aretravelling we may have access to no or to fewer merchant fares and wemay have smaller discounts from standard published rates on themerchant rates that we do get. If we suffer unexpected revenueshortfalls we may not be able to adjust spending quickly enough tocompensate and our cash flow, results of operations and financialposition could be negatively impacted.

We couldlose access to merchant fares, which would have a substantial impact onour revenues

Merchant fares (also known as negotiated fares) arediscounted tickets that airlines, hotels, car and insurance companiesoffer to selected travel agents primarily to dispose of excess capacitywithout eroding the market for the standard published fare tickets orprices. In 2003, the majority of our gross sales came from the sale ofmerchant fare tickets. For a description of gross sales please refer tothe "Presentation of Financial and OtherInformation" section of this Annual Report.

Since asignificant portion of our revenue is based on the sale of merchantfares, our business may suffer if, over an extended period, ourultimate suppliers have less excess capacity available than hashistorically been the case. Furthermore, if these suppliers supplyfewer merchant fares to us, or supply them on less favorable terms,which they can do on short notice, our ability to carry on businesswill be jeopardized.

Key to the renewal of merchant fareagreements is our ongoing ability to sell the excess capacity of thesupplier. These agreements do not require suppliers to provide aspecific quantity of tickets or to deal with us exclusively. Indeed,the suppliers would generally prefer to sell more tickets themselves atpublished fares and fewer tickets on a merchant basis to many differenttravel agents. Although the terms vary, the typical agreement is forone year. These agreements with suppliers could be cancelled or alteredat relatively short notice although if a fare is withdrawn, we will begiven a period of time to issue any existing tickets that have beenbooked to ensure that we can still sell at the same fare. In the past,suppliers have at times renewed agreements with us on less favorableterms than previously existed and this may occur again in the future.The impact of losing our merchant fare arrangements or of receivingthem on less favorable terms would be harmful to our business.

We could face significant competition as a result ofthe major airlines' strategies to limit the supply of availablemerchant airfares

Nine of Europe's largest airlines,including British Airways, launched an internet travel agency calledOpodo in 2001. According to its website, Opodo offers over 400 airlinesand 34,000 hotels, a substantial proportion of which we believe aremerchant fares previously available only through contracting travelagencies like ebookers. Opodo launched in Germany in November, 2001,the United Kingdom in January 2002 and France in April 2002. Opodopublicly states on its website that it plans to expand into otherEuropean countries in 2004 and beyond. Although Opodo may pose a threatto our business in the long-term, we do not believe that it has had asignificant impact on our sales or supplier relationships to date.

Regardless of whether Opodo ultimately becomes a significantcompetitor, airlines may at any time decide to discontinue theirbusiness with us or with one of our subsidiaries or adopt othercompetitive strategies to limit the supply of merchant fares availableto us. If this happened, our revenues would be significantly reducedand our ability to carry on our business in the United Kingdom andelsewhere in Europe would be jeopardized.

Adecline in our commissions from airlines, hotel companies and car hirecompanies could reduce our revenue and adversely affect our business,financial condition and results of operations

In 2003, themajority of our gross sales resulted from sales of merchant fares. Onthese fares ebookers determines its own mark-up and is therefore notsubject to commission pressure from our 

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suppliers. However, a proportion of ourrevenues have historically been published fares, for which suppliers doset commission rates. In 2003, these fares accounted for approximately17 percent of our gross sales. If our suppliers reduce their commissionrates or move to fixed commission arrangements then our revenue coulddecrease, which would negatively impact our strategy, financialcondition and results of operations. (For a description of gross salesplease refer to the "Presentation of Financial and OtherInformation" section of this Annual Report).

Our reliance on distribution agreements to attractcustomers to our websites means that our success may be contingent onthird parties' internet operations

A significantproportion of visits to and bookings made through our websites resultfrom customers coming directly to ebookers' sites. However werely to a large extent on agreements with internet portals and searchengines such as Yahoo! and Google to draw customers to our websites. Ifthe number of people using their services declines, we may get fewercustomers, realize fewer sales, and experience lower revenues and adecrease in our results of operations.

We may notbe able to expand our online features and services successfully enoughto compete effectively

We intend to introduce new and enhancedwebsites and additional online services in order to keep the customerswe have as well as to attract new ones. We may, however, experiencedifficulties that could delay or prevent us from introducing these newservices and features. Furthermore, even if we are able to introducenew features or services, if they are not favorably received, we mayfail to attract new customers or lose the ones we have now. Any newservices or features may also contain errors that are discovered onlyafter they are introduced. We may need to significantly modify thedesign of these services to correct errors. If our customers do notaccept our services or features, or encounter difficulties with them,they may not buy the products that we offer which, in turn, will meanthat our revenues will be reduced.

The relocationof a portion of our operational functions to India may disrupt ouroperations and may inhibit our ability to operate our business

During 2001, 2002 and 2003, we relocated a portion of our operationsto our BPO facility in New Delhi, India. We now carry out severalbusiness processes in India ranging from data inputting, accounts,customer service, e-mail response, software development, to sometelephone sales. Currently the majority of processes being carried outare for our U.K. operations, but we are now transferring more processesfrom our mainland European subsidiaries. In addition we aretransferring further U.K. processes following our acquisition ofTravelbag. Furthermore, we are currently expanding the capabilities ofthe BPO facility to take on third party work and develop an additionalrevenue stream for the Group.

Our Indian operations are subjectto a number of risks. These risks include the possibility thattelecommunications data links with European subsidiaries will beunreliable and our technology invested in India will not functioncorrectly. Additionally, there may be cultural and communicationdifficulties with our BPO facility in India. Although we have investedsignificant financial and management resources to train our Indianemployees, it is possible that this investment and training may beineffective and they may be unable to adequately carry out ourbusiness. It is also possible that international diplomatic tensions inthe region could result in acts of aggression or other activities thatmay disrupt our operations. We may also fail to meet the business needsof any future third party clients. If any of these risks, or anyunforeseen difficulties occur, our ability to carry out our business inIndia and in Europe could be severely jeopardized.

We may not be able to improve our hardware andsoftware successfully or fast enough to keep up with demand, therebydamaging our service capabilities

Our prospects depend onincreasing the number of consumers accessing our websites and makingpurchases, as well as contacting our call centers or visiting ourwalk-in shops. However, this increased activity may exceed the currentcapacity of our computer systems and information technologyinfrastructure. In particular, our connections to third party computerreservation systems, including 

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Amadeus, Sabre and Worldspan may not be ableto support a rapid increase in the number of users, and upgrading ourconnections to these computer reservation systems could take severalweeks. In addition, we may need to purchase additional computerhardware to cope with an increased load of traffic through our systems,and the integration of new hardware into our system could take severaldays. If we are not able to develop or to purchase the necessaryhardware, or if we do not successfully upgrade our technology andnetwork infrastructure, especially our connections to Amadeus, Sabreand Worldspan, or another global distribution system, or GDS, customersmay have trouble accessing and using our websites. If this happens wewould lose sales and fail to attract new customers and couldpermanently lose current customers.

We may beunable to adapt our business or the content or features of our websitesto benefit from new technologies

Currently our online bookingsare made via the internet, with some support by telephone. If thisaccess channel is superseded by new forms of online access, such as viathe television, mobile telephones or personal digital assistants, wemay fail to adapt our technology to these new access channels, or maylack the necessary resources to do so. Furthermore, we may investheavily in these developing technologies only to have them supersededby others.

If we lose access to GDSs we will notbe able to conduct our business

We depend on GDSs for access toour suppliers' published inventory. GDSs are worldwide industryreservations systems for flights, hotels, cars, and, increasingly,other travel services. We have technical integration with three GDSs,Amadeus, Sabre and Worldspan, and have agreements with each of them.Although we have entered into these agreements in order to reduce therisk of relying on a single GDS, if we were to lose access to any ofthese computer reservation systems or if one or more sufferssignificant technical difficulties, we may not be able to book certainairline tickets, car hires and hotel reservations for our customers. Ifthis occurs, we may not be able to operate our business properly. Theminimum notice period for termination of the contract with Amadeus is180 days in respect of ebookers and 90 days in respect of Travelbag; inrespect of the contract with Sabre or Worldspan, it is 90 days in eachcase.

We operate in an intensely competitiveenvironment. If we are unable to compete effectively, we could losecustomers, our revenue may decline and our ability to continue ourbusiness could be jeopardized

We face intense competition fromtraditional and web-based companies and travel agencies in each of ourmarkets. Online competitors include Expedia, Opodo, travelocity.com andlastminute.com and there are also competitors in individual marketsincluding Travelchannel.de in Germany and Gohop.ie in Ireland. Offlinecompetitors include Trailfinders, Flight Centre, STA and L'tur.We also face increasing competition, particularly in the short-haulmarket, from low-cost airlines such as easyJet and Ryanair, that onlysell direct, principally through the internet; however, as our mainfocus is long and mid-haul, the competitive risk is less from theseshort-haul airlines. We also face competition from airlines and carhire companies and hotels selling direct to the public such as BA.com,as well as online companies that may specialize in the provision ofdiscount hotel bookings, such as hotels.com, or of reduced rate carhire, such as Holiday Autos. Our competitors may have greater financialresources with which to compete against us, and we may be unable torespond effectively enough to changes in their strategy, causing us tolose market share and customers.

Our subsidiariesmay lose their licenses to issue airline tickets if they do not meetestablished solvency requirements

Our subsidiaries must eachmeet solvency requirements in order to maintain their licenses to issueairline tickets in their respective countries. In order to maintain amembership with IATA, ebookers' IATA-licensed subsidiaries musteach meet certain criteria. Although IATA may, in certaincircumstances, permit European travel agencies that fail to meet someof its requirements to remain licensed members subject to certainstrict bonding requirements, our subsidiaries may also be subject toadditional local regulations with respect to their solvencyrequirements.

These additional regulations could also cause oursubsidiaries to lose their licenses to issue airline tickets. Forexample, in the United Kingdom the Civil Aviation Authority("CAA"), which manages 

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the statutory regulation of businesses thatmake available air travel, satisfies itself annually as to thefinancial fitness of Air Travel Organiser's License("ATOL") holders. This assessment, which isusually made by reference to the ultimate parent company in the case ofgroups, considers the "free assets" and riskturnover of the business. Free assets include net current assets thatare readily recoverable and the written down value of any assetscapable of supporting borrowing, normally freehold and long leaseholdproperties in the United Kingdom, net of any borrowing secured on them.Risk turnover is assessed by reference to projected turnover for thenext full year of operation. The CAA requires an adequate ratio betweenfree assets and risk turnover. This ratio varies between 5% and3% depending on the CAA's assessment of the risksinvolved.

In the event that one or more of the group'sATOL holders fails to meet this test each year, we may have to providea cash injection into the company or the CAA may revoke one or more ofits ATOL licenses.

If one of more of the group's ATOLholders fails to meet the CAA's financial fitness requirements,we may lose our license to trade in certain categories of licensablebusiness. This could affect our ability to sell merchant airlinetickets adversely affecting our business in the United Kingdom andsignificantly reducing our revenues.

In order for our Dutchsubsidiary to maintain a membership with the Netherlands Association ofTour Operators ("ANVR") and StichtingGarantiefonds Reisgelden (Travel Funds Guarantee Fund —"SGR"), two organizations in the Netherlandsto which all travel agents offering package tours are required tobelong, it must fulfill certain financial requirements, including aminimum annual revenue, during each fiscal year. A failure to meetthese requirements for just one year would mean that our Dutchsubsidiary could lose its membership in either or both of theseorganizations.

In addition, our Swiss subsidiary is regulated bythe Fondation Fonds de Garantie Legal de la Branche Suisse duVoyage ("FFGL"), a voluntary organizationprimarily concerned with travel agencies in Switzerland. Although thereis no legal requirement for a Swiss travel agency to be a member ofFFGL, it is unlikely that many local customers would purchase travelservices from a non-FFGL member. In order to maintain its membership inFFGL, a travel agency must deposit annually with the FFGL a fixedamount related to gross sales from the previous year. Fonds deGarantie de la Branche du Voyage ("FGBV")acts as a guarantee for all clients who purchase their travel from atravel agency or tour operator that is an FGBV member. In case ofbankruptcy by a travel agency or tour operator member of FGBV, FGBVwill make sure that the travel purchased by a client takes place asoriginally arranged with the bankrupt FGBV member. To cover our clientsin case of bankruptcy, ebookers Switzerland has a bond of 50,000 CHFwith them. Besides this bonding requirement, FGBV also imposes on itsmembers certain minimum standards with respect to proper insurancecoverage and other matters.

In Norway, travel agencies must bemembers of the Norwegian Guarantee Foundation("RGF"). To become a member, a bank orinsurance company has to issue a guarantee that the travel agency willfulfill its obligations towards its customers. ebookers.no AS (formerlyGeotours AS), our Norwegian subsidiary is a member of RGF.

InFrance, it is a legal requirement for a travel agency to provide afinancial guarantee from a bank, or be a member of the AssociationProfessionelle de Solidarité de Tourisme("APS"). If we fail to obtain such aguarantee, our travel agent's license could be revoked because weare not a member of APS. In order to maintain membership of APS, atravel agency must deposit annually with the APS as a"bonding guarantee" a sum equal to apercentage of its revenue for the preceding fiscal year. Although nostandards are provided by its General Orders, the APS could exclude acompany that is facing financial difficulties.

In Spain, atravel agency must have in place an insurance policy for a minimum of£275,000 as well as deposit a bonding guarantee whose amountdepends on the number of premises it has and whether the bondingguarantee is individual or through its Association.

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We may not be able toattract or retain key employees that are vital to the effectiveoperation of our business

Our prospects depend on theperformance of our senior management and other key personnel, such asour technology experts who have developed much of our proprietarysoftware that is important to our operations. If we lose the servicesof our Chief Executive, we might not be able to find someone else withhis level of experience in managing a pan-European online travelagency. We do not have long-term employment agreements with most of oursenior management and other key personnel. We will also be at risk ifwe do not retain many members of the senior management including thosewho have joined the Group as a result of the acquisition ofTravelbag.

We may be unsuccessful in our marketingand our brands may not achieve the broad recognition and develop thestrong reputation necessary to succeed in the electronic commercemarket

We must continue to market the ebookers brands andproduct offerings in order to attract customers and expand ourbusiness. As the markets in which we operate are highly competitive,the success of our business depends on further enhancing the ebookersbrands. The success of our branding and marketing will depend to alarge extent on our ability to provide our customers with high-qualityonline and offline experiences, supported by a high level of customerservice, and on our ability to enhance our advertising programs. If wefail to implement our marketing and brand strategies we could fail toattract new customers, or maintain existing customers, and our revenuescould decline. This risk has increased following the acquisition ofTravelbag Holdings, as currently we are retaining separate brands foreach of the acquired brands, Travelbag and Bridge the World. Currentlythese both complement and compete with one another and with existingebookers brands, including ebookers.com and Flightbookers, as part of aUK multi-brand strategy.

The cyclical nature ofthe travel market could depress our income

The market forleisure travel products and services is cyclical, with demand decliningduring periods of recession and high unemployment. The cyclical natureof this market is particularly apparent with respect to the leisuretravel segment, where consumer spending tends to decline during periodsof contraction in the broader economy. Our business is traditionallyaided by strong rises in internet use. Nonetheless, since our businessis heavily dependent on the demand for travel products and services,any weakness in this overall market could reduce the level of ourrevenues and have a negative impact on our income.

Our customer service center may not be able to respondadequately to increased activity generated by the expansion of ourbusiness

We depend on our telephone and email customer servicecenter to assist customers in using our service. If the demand foraccess to the telephone or email customer service center exceeds itscapacity, or if we fail to meet the customer service demands of ourcustomers, we could lose sales, new customers and permanently lose ourcurrent customers. There will be a heightened risk of being unable todeliver adequate customer service during the period when futureacquisitions' customer service functions are integrated withebookers, and parts are transferred to our Indian BPO facility.

We may incur liability for the content of messagesdisplayed on our website

Our sites are partly designed topresent information relating to our business partners, who have signedcontracts for that purpose. Within this framework, we can be considereda supplier of advertising media and/or a distributor of information tosite users and can incur liability if the content of messagescirculated on our site is unlawful. Due to the combination of windows,deep links (or websites embedded in other websites) and hyper-links,there is a risk that users will consider us the direct supplier ofproducts and services advertised and offered by partners on ourwebsite.

We manage these legal uncertainties by means ofcontracts with our business partners in certain jurisdictions and bythe use of website disclaimers. These measures may be disregarded orineffective if we are prosecuted. In any event, as a result of our useof websites to conduct our business, we may incur civil and/or criminalliability.

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We may not be able toprotect our intellectual property, resulting in someone else being ableto use our name or technology for a competing business

Claims,infringement or misappropriation by third parties may hurt ourbusiness. We rely on a combination of laws and contractualrestrictions, including trademark and copyright law, database rights,trade secret protection and confidentiality and license agreements withour employees, customers, partners and others, to establish and protectour intellectual property rights. However, laws and contractualrestrictions may not be sufficient to prevent misappropriation of ourtechnology or deter others from developing similar technologies. Wehave registered some of our key trademarks and service marks injurisdictions where we believe this to be appropriate. Effectivetrademark, copyright and trade secret protection may not be available.The steps we have taken to protect our proprietary rights may not beadequate. Accordingly, third parties may infringe or misappropriate ourcopyrights, trademarks, trade secrets and similar intellectual propertyrights, and we may be required to incur significant expenses preservingour rights.

We may face potential litigation based on claimsthat we have infringed the intellectual property rights of others whichcould expose us to a costly defense, result in substantial damagesand/or cause us to restrict our operations. As the internet andelectronic commerce develop, it is likely that there will be claims byindividuals and companies who will assert that they have intellectualproperty rights over technologies or processes used in electroniccommerce. If someone were to claim that we were violating theirintellectual property rights, it would be costly for us to defend suchan action and it might result in us having to pay substantial damages,pay license fees in order to continue those portions of our operationsfound to be within the scope of the claiming party's intellectualproperty rights and/or discontinue those portions of our operations.Any of these results would have a negative impact on our results ofoperations and might jeopardize our ability to continue our business inits current form.

We may not be able to protectour domain names, which would damage our brand and may cause us to losecustomers

We are the registered proprietor of various internetdomain names relating to our business. The Internet Corporation forAssigned Names and Numbers in the United States and, elsewhere,equivalent registrars, governmental agencies and their designeesregulate the registration of domain names. The current system forregistering, allocating and managing domain names has given rise tolitigation, including trade mark litigation, since domain names may beallocated to any person who requests that allocation, whether or not athird party owns the rights to a trade mark incorporated in that domainname. There can be no assurance that our domain names or their valuewill not be affected by changes related to the registration andprotection of domain names. If we were to lose the exclusive right touse our domain names, or we fail to register appropriate domain namesas new top-level domains become available, or to renew ourregistrations, or we are unable to prevent our brand being dilutedthrough the use of similar domain names by others, our internet salesmay be irreparably damaged because customers may be unable to find ourwebsites or may be diverted to other sites.

Our or ourthird-party suppliers' inability to modify or adapt our or theirGDS interface software and other infrastructure components in a timelymanner, or the expenses incurred in making such adaptations, couldcause us to lose customers and would negatively impact ourrevenues.

The industry in which we compete is characterized byrapid changes in technology, user and customer requirements andpreferences and industry standards and practices. New developmentscould quickly render our existing websites, proprietary software andsystems obsolete. Modifications of GDS software or hardware, forinstance, could render obsolete our GDS interface software.

As aresult of rapid changes in our industry, we and our third-partysuppliers will be required to continually improve the performance,features and reliability of our services, particularly in response tocompetitive offerings. Our success will depend, in part, on our and ourthird-party suppliers' ability to enhance our and their existingservices and develop new services in a cost-effective and timelymanner. The development of proprietary software entails significanttechnical and business risks and 

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requires substantial expenditure and leadtime. We or our third party suppliers may not be able to adaptsuccessfully to customer requirements or emerging industry standards.In addition, the widespread adoption of internet, networking ortelecommunications technologies, or other technologies, could requireus or our third-party suppliers to incur substantial expenditures tomodify or adapt our or their services or infrastructure.

RisksRelated To The Industry

If online commerce doesnot continue to grow in Europe our business may not succeed

Ourfuture revenues and profits depend, to a substantial degree, on thewidespread acceptance and use of the internet and online services as amedium for commerce by customers and sellers. If acceptance and growthof online commerce does not continue, we will not be able to developand maintain a sufficient customer base.

The rapid growth in theuse of the internet and online services has been a recent phenomenonand, as we have witnessed over the last year, the historical growthrates of e-commerce may not continue. Moreover, there are few provenproducts or services in the internet market. Convincing consumers topurchase travel services online may be particularly difficult becauseexpenditures on leisure often form a significant portion of anindividual's disposable income, which may vary depending oneconomic cycles. Consumers have traditionally relied on travel agentsfor advice and recommendations as to destinations and scheduling, aswell as for bookings, and are accustomed to a high degree of humaninteraction in purchasing travel services which the internet may beunable to provide, even though we do offer a telephone service tovisitors to our websites.

For us to achieve significant growth,customers who have historically used traditional means of commerce willinstead need to elect to purchase products and services online, andsellers of products and services will need to adopt or expand use ofthe internet as a channel of distribution. Our revenues and profitsdepend on customers visiting our websites and actually purchasing goodsand services. Customers could potentially use the websites for route,price and other information and choose to make actual purchaseselsewhere. If this happens, we may not be able to adequately grow ourbusiness or revenues or achieve sustainable profitability.

Privacy concerns may make it hard for us to collectinformation on our customer base and may deter customers from using ourwebsite

Websites typically place"cookies" on a user's hard drivewithout the user's knowledge or consent. We use cookies for avariety of reasons, including collecting data derived from theuser's internet activity. Most currently available internetbrowsers allow users to either remove cookies at any time or preventcookies from being stored on their hard drives. We also gatherinformation about our customers by asking them to fill out online formswhen they purchase a product or service from us. We save thisinformation and use it for marketing purposes. Any reduction orlimitation in the use of cookies or other information we collect couldlimit the effectiveness of our sales and marketing efforts.

Inthe European Union ("E.U."), the DataProtection Directive (See "Item 4. A History andDevelopment of ebookers plc — Regulation") imposesrestrictions on the collection, use and processing of personal data.Cookies are personal data and therefore subject to the directive. Underthe directive, where an individual's personal data is collectedor used in the European Union, that individual has the right to knowthe identity of those that hold or have access to his personal data,the right to know where the data originated, the right to haveinaccurate data rectified, the right to recourse in the event ofunlawful processing of his data and the right to withhold permission touse their data for direct marketing. Full compliance with the directiverestricts the way in which we collect and use personal data collectedin E.U. Member States and this may adversely affect our business.

The use of cookies has been further restricted by the coming intoforce of the Directive on Privacy and Electronic Communications (the"ePrivacy Directive"), which was implementedin the UK in December 2003. We now have to ensure that users are givenclear information about our use of cookies, and the right to rejectthem. We do this via the privacy policy on our website.

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Privacy legislation mayplace restrictions on the conduct of our business, particularly inrelation to sending data outside of Europe

Companies whichprocess data in the European Union are not allowed to send personaldata to countries outside the European Economic Area which do notmaintain adequate standards of privacy. We send personal data tocountries outside the European Economic Area, in particular to ourIndian subsidiary, Tecnovate eSolutions Private Limited, which operatesour BPO facility. To ensure that these transfers comply with the DataProtection Directive we must either obtain the consent of theindividuals for those transfers or put an adequate contract in placebetween the relevant ebookers company and the company outside theEuropean Economic Area, which ensures that the security of the data ismaintained. Such contracts are now all in place, apart from France andthe Netherlands where, in each case, the agreements have been signedbut are awaiting approval from the relevant local authorities, andGermany, where the agreement has yet to be submitted. Currentlyebookers is also finalizing an audit of transfer of our data tocountries outside the European Economic Area to address othercompliance issues. Complying with these requirements may affect ourbusiness and failing to comply may lead to sanctions, fines, claims forcompensation and, in some jurisdictions, criminal liability.

Even where we comply with E.U. privacy laws we mayhave to comply with national variations including higher standards incertain countries

Even though the purpose of the various E.U.privacy and other directives is to harmonize the various national lawson data protection in the European Union, the directives set a minimumstandard and, therefore requirements may vary from country to countrywithin the European Union and may continue to do so in the future. Wemay, as a result, be obliged to comply with different legislativerequirements (and in particular, with those of a higher standard thanthose required by the directives) which could have an impact on ourability to collect, use and export data outside the European EconomicArea. Switzerland, for example, is not part of the E.U. and thereforeis not bound by the directives but it has its own regulations governingdata protection, and we are taking measures to ensure we comply withthese.

Current and proposed legislation may makeit hard for us to market our business, particularly by e-mail

There are current variations in national legislation relating to theuse of unsolicited e-mail ("spam") for thepurpose of marketing. In some E.U. Member States unsolicited e-mail isprohibited; in others, users are given the right to opt-out ofreceiving unsolicited e-mail. Although our current policy is to not useunsolicited e-mail, in the future this legislation may limit ourability to market our business and to have a uniform policy on the useof spam across the jurisdictions in which we operate.

Under theE-commerce Directive (as defined in "Item 4.B BusinessOverview — Regulation — E-commerceDirective"), where unsolicited e-mail is permitted inparticular E.U. Member States, it must be identified clearly andunambiguously as unsolicited commercial communications as soon as it isreceived by the customer. Furthermore, in such Member States, sendersof unsolicited e-mail are required to consult and observe thepreferences of those not wishing to receive these e-mails. The ePrivacyDirective introduced further regulation of unsolicited e-mail. Underthis directive unsolicited automated communications for directmarketing by e-mail and Short Messaging Service("SMS", commonly known as text messages) mayonly be allowed where users have given their prior explicit consent.Some direct marketing to certain existing customers is permissibleunder the directive providing such customers have been given the rightto object and have not done so (but more onerous requirements apply insome Member States). If we have to overhaul the contents of ourdatabase and obtain new forms of consent in order to achieve this, weare likely to incur significant cost.

If we failto comply with data protection and related legislation action could betaken against us and our reputation may be damaged

If we breachapplicable data protection and other related legislation, we may besubject to claims from individuals whose data we hold or processclaiming that we have infringed their rights, and we could faceproceedings initiated against us by the applicable regulatoryauthorities. In certain 

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jurisdictions, the regulatory authoritieshave the authority to levy substantial fines for breaches of applicablelegislation and in some jurisdictions there are criminal sanctions incertain circumstances. In addition, inquiries made by data protectionregulatory authorities often lead to negative publicity for the companyconcerned.

Government regulation relating toe-commerce may force us to modify or abandon practices

Regulation of the internet and electronic commerce is rapidlyevolving. There have been an increasing number of laws and regulationsdirectly applicable to the internet and e-commerce. It is possible thatadditional laws and regulations may be enacted with respect to theinternet, covering issues such as user privacy, law enforcement,pricing, taxation, content, copyright, distribution, and quality ofproducts and services. Additionally, the rapid growth of electroniccommerce is prompting the development of tougher consumer protectionlaws. The continued adoption of such laws or regulations could reducethe rate of growth of electronic commerce on the internet and couldharm our business both directly and indirectly. In addition, businessoperations on the internet are subject to existing laws governingissues such as property ownership, copyright and other intellectualproperty issues, taxation, libel, obscenity, consumer protection andpersonal privacy. The vast majority of such laws were adopted prior tothe advent of the internet and related technologies and, as a result,do not contemplate or address the unique issues of the internet andrelated technologies. The application of these existing laws to theinternet could also hinder the operation of our business.

The global nature of our business subjects ouroperations to regulation by a multitude of national laws

Due tothe global nature of the internet, it is possible that, although theservers and infrastructure used to provide ebookers' services arebased in the United Kingdom, Ireland and India, the governments ofother countries, in particular, those countries where we seekcustomers, might attempt to regulate our products and services orprosecute us for violations of their laws. Because our content isavailable over the internet all around the world, these jurisdictionsmay claim that we are required to comply with their regulations to dobusiness in each such country, including being required to notifygovernmental authorities of our activities relating to the collectionand processing of user data, or relating to the provision of financialservices information. Any such legislation or regulation, theapplication of laws and regulations from jurisdictions whose laws donot currently apply to our business, or the application of existinglaws and regulations to the internet and other online services couldmake it difficult for us to operate our business in its currentform.

In its report of July 2, 1998 on the internet and digitalnetworks, the Conseil d'Etat, France's highestadministrative tribunal, stipulated that the internet should beconsidered as advertising space and that existing French legal rulesshould be applied. These rules encompass a wide range of areas, such asrules on the protection of minors, the nature and content ofadvertising, the regulation of unsolicited e-mail and the LoiToubon on the obligation to use the French language. Theseregulations are applicable to web page banners, e-mail, icons, sound,text, pictures and even hypertext links.

Under the E-commerceDirective, the laws of the country of the service provider will applyto the provision of its services over the internet (the"country of origin principle"). However, thecountry of origin principle does not apply to contractual obligationsconcerning consumer contracts. We are, therefore, exposed to mandatoryconsumer protection laws in all the E.U. Member States where ourcustomers are located.

Laws protecting consumersmay mean that consumers can enforce contractual rights in the courts oftheir home jurisdiction

The regulation on the jurisdiction,recognition and enforcement of judgments in civil and commercialmatters (the "Brussels Regulation") enteredinto force on March 1, 2002. It applies to all E.U. Member Statesexcept Denmark. Consumers who enter into online contracts will, in manycases, be entitled to sue in their own jurisdiction irrespective of thelocation of the other party, and where an action is brought against aconsumer based in the E.U. this can only be brought in theconsumer's home country. As we operate websites in 13 differentEuropean countries, this is likely to increase our costs in the eventof being sued.

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Risks Related to Investing in our Sharesand ADRs

The price of our ordinary shares andADRs may be volatile and may decline

The price of equitysecurities of internet or internet related companies, including thoseof ebookers, have historically been very volatile and this volatilitymay continue into the foreseeable future. Sudden and significantchanges in the prices of our ordinary shares and ADRs may be driven byindustry wide factors and market sentiment outside of our control ornot directly related to us.

Events that may influence the priceor volatility of our ordinary shares and ADRsinclude:

|              |                                                 |
|--------------|-------------------------------------------------|
| •  | fluctuations in our quarterlyoperating results; |

|              |                                                                      |
|--------------|----------------------------------------------------------------------|
| •  | conditions or trendsin the internet, e-commerce or travelindustries; |

|              |                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------|
| •  | changes in the economicperformance or market valuations of other internet, e-commerce ortravel companies; |

|              |                                                                                                                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | announcements by usor our competitors of significant acquisitions, strategic partnerships,joint ventures or capital commitments, such as the announcement of ouracquisition of Travelbag in February2003; |

|              |                                                     |
|--------------|-----------------------------------------------------|
| •  | the significant sale of ourordinary shares or ADRs; |

|              |                                          |
|--------------|------------------------------------------|
| •  | additions ordepartures of key personnel; |

|              |                                                                      |
|--------------|----------------------------------------------------------------------|
| •  | potential,threatened or actual litigation or similar proceedings;and |

|              |                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------|
| •  | acts of terrorism or other causesof general disruption in the travel and travel-related industries. |

A liquid market may not exist for our shares andADRs

Ebookers' equity securities are traded on two stockexchanges, as ADRs on the Nasdaq national Market and as ordinary shareson the London Stock Exchange. Following the sale of 3,000,000 ordinaryshares by our Chairman, Chief Executive Officer and controllingshareholder, Dinesh Dhamija in November 2002, the free float at the endof 2002 was approximately 46 percent of all ordinary shares issued. Atthe end of 2003 the percent of shares held by our Chief ExecutiveOfficer and other Directors had decreased to 41.63 percent and the freefloat stood at 58.37%. Lack of liquidity may have been acontributory factor to the historic volatility in the price of ourequity securities and may continue to contribute to volatility in thefuture.

We are indirectly controlled by oneshareholder whose interests may conflict with our othershareholders.

As of December 31, 2003, Dinesh Dhamija, ourChairman and Chief Executive Officer, was the beneficial owner of26,985,700, or 41.56%, of our ordinary shares. Mr. Dhamijaultimately has substantial influence over the nominations of ourexecutive officers and directors, and over our management and businessaffairs and decisions. Mr. Dhamija's views on these matters mayconflict with those of our other shareholders. For more information onbeneficial ownership of shares, please refer to "Item 7.AMajor shareholders".

Risks Related to Investing inan English Company

Our shareholders' rights as will begoverned by English law, which significantly limits their rights tobring derivative actions and may make it more difficult for them to winU.S. securities law claims against us. We are a public limited companyorganized under the laws of England and Wales. The rights of holders ofordinary shares and therefore, many of the rights and holders of ADRs,are governed by English law and by our memorandum and articles ofassociation. These rights differ from the rights of shareholders intypical U.S. corporations. In particular, English law significantlylimits the circumstances under which the shareholders of Englishcompanies can bring derivative actions. Under English law generally,only we can be the proper plaintiff in proceedings in respect ofwrongful acts committed against us. In addition, it may be difficultfor our shareholders to win a claim against us, our directors andofficers and the named experts under, or to enforce liabilitiespredicated on, U.S. securities laws. As a result, it may not bepossible for them to:

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|              |                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------|
| •  | effect serviceof process within the United States upon us or our directors andofficers and the named experts; |

|              |                                                                                                                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | enforcein U.S. courts or outside the U.S. judgments obtained against us or ourdirectors and officers and the named experts in U.S. courts in anyaction, including actions under the civil liability provisions of U.S.securities laws; or |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | enforce in U.S.courts judgments obtained against us or our directors and executiveofficers and the named experts in courts in jurisdictions outside theUnited States in any action, including actions under the civilliability provisions of U.S. securities laws. You may also havedifficulties enforcing liabilities under the U.S. securities laws inoriginal actions brought in courts in jurisdictions outside the UnitedStates. In addition, it may be difficult for you to enforce liabilitiesagainst us, our directors and officers, and the names experts in theUnited Kingdom in original actions or in actions for the enforcement ofjudgments of U.S. courts predicated upon the federal securities laws ofthe United States. |

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ITEM4.    INFORMATION ON EBOOKERS PLC

4.A. History andDevelopment of ebookers plc

Prior to June 1999, we were theinternet arm of Flightbookers Ltd., which has been selling travelproducts and services since 1983. In June 1999, we became a company andin November 1999, we conducted an initial public offering and listingon Nasdaq. On November 16, 2000, we acquired Flightbookers Ltd., whichfrom June 1999 to November 2000, provided us with our merchant faresand fulfilled our travel product and service sales in the U.K. In theprocess, we acquired Flightbookers Ltd.'s relationships with asignificant number of airlines and other travel suppliers, nowproviding us with access to a broad range of merchant fares in the U.K.and elsewhere. We listed on the London Stock Exchange in April2001.

On February 7, 2003 we acquired Travelbag Holdings, a U.K.travel agency specializing in long-haul and mid-haul destinations withgross sales of approximately £200 million in 2002. Thisacquisition followed our corporate strategy of buying establishedoffline travel companies and converting them to the internet using ourtechnology and marketing expertise. Travelbag Holdings had threebrands, including Travelbag and Bridge the World and TravelbagAdventures (renamed: The Adventure Company). The Adventure Companybrand was sold with its related business in March 2004.

Apredecessor company to ebookers plc was incorporated in Great Britainon August 3, 1999 as a limited liability private company andre-registered as a public limited company governed by the laws ofEngland and Wales on October 21, 1999. On November 30, 2001 the Companychanged its name to ebookers plc. Our principal executive offices arelocated at 25 Farringdon Street, London EC4A 4AB, England and our phonenumber is +44 (0) 20 7489 2222.

4.B Business Overview

General

We are a leading pan-European onlinetravel agency with websites servicing 13 European countries —Austria, Belgium, Denmark, Finland, France, Germany, Ireland, theNetherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom.We specialize in the mid and long-haul leisure segments of the Europeantravel industry. We specialize in the modular area of the market,meaning that we allow consumers to choose each component of theirholiday themselves, such as a hotel, flight, or car hire, rather thanbuying a "one size fits all" holiday, as withthe package sector of the market. We also specialize in sellingdiscount merchant fares, which we negotiate directly with leadingtravel suppliers in order to help them sell their excess capacitywithout damaging their pricing structure and brands.

We have a20-year travel heritage which, when combined with the relationships wehave established during this time and our acquisition strategy ofbuying established companies, has given us what we believe to be one ofthe widest ranges of discount travel products on the internet inEurope. This range includes discount airfares, hotels, car hires,cruises and travel insurance. We also sell standard priced fares forleading airlines, hotels and car hire suppliers. We have a managementteam that comes largely from the traditional travel agency sector andis highly focused on controlling costs. In furtherance of controllingcosts, we have established a low-cost Business Process Outsourcing("BPO") facility in New Delhi, India with astaff of over 700, which currently carries out several businessfunctions including e-mail sales and software development.

Wehave grown through organic growth and also through acquisition. Ourcurrent corporate acquisition strategy, first set out in 2002, is tobuy large established offline travel companies and to convert them tointernet sales channels using our technology and expertise. We also aimto derive significant synergies and reduce the cost base of companieswe acquire through economies of scale and use of our BPO facility inIndia. We have already made significant progress in integratingTravelbag Holdings. Key departments have been integrated and our U.K.business is now run as a single operational unit.

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We have a multi-brand marketing strategy.Our main corporate brand is ebookers but we also sell through otherbrands including Flightbookers, and now Travelbag and Bridge the Worldin the United Kingdom, MrJet in the Nordic region and Dimensiones inSpain.

Each of our websites is in the local language and focusedon local consumer needs. Our websites allow customers to shop from andcompare a wide selection of airfares, hotels, car hires, cruises,holiday packages and other travel products. Increasingly our customersare able to combine a number of products in one purchase in order tosecure greater savings. As many of our product and service offeringsare negotiated, or discount rates, they will often be accompanied bynumerous use and timing restrictions, which can easily be viewed by ourcustomers prior to making a purchase.

While ebookers specializesin online travel, and our web presence is driving our growth, we alsobelieve that we need to offer traditional sales or enquiry channels toour customers where demanded by them, for example call centers, andsome walk-in stores. The low-cost processing capability of our BPOfacility in India means that offline sales transactions are stillattractive.

As the majority of our travel sales are to mid andlong-haul destinations, we do not consider ourselves to be in directcompetition with short-haul operators, such as low-cost Europeanairlines easyJet and Ryanair. In fact, we believe that they arecomplementary to our business as they have helped educate Europeanconsumers in booking travel online.

Europe is a complex andfragmented travel market which cannot be serviced from one centrallocation due to licensing requirements and the need to secure merchantfares on a country-by-country basis. Consequently, we have a physicalpresence in 11 European countries and ensure that our websites, callcenter operations and marketing strategies are adapted to reflect thelinguistic, cultural and consumer differences within thesemarketplaces.

We believe we have a strong management team inplace that has considerable experience in the travel and travel-relatedindustries. Our Board members among themselves have over 100 years ofcollective experience in travel or travel-related industries.

Indian BPO facility — Tecnovate eSolutions PrivateLimited

We believe that Tecnovate eSolutions Private Limited("Tecnovate"), our BPO facility located inNew Delhi, India, provides us with competitive cost advantages thatunderline our commitment to becoming the lowest cost provider in theindustry. This facility has been designed to give ebookers thecapability to manage significant increases in internet and telephonesales at lower costs than have been achieved historically. Tecnovatecurrently has over 700 staff members, many of whom are multi-lingual.Most staff are graduates and all staff undergo a structured trainingprogram. Tecnovate staff are responsible for several business processesincluding e-mail sales, customer service, competitor pricing analysis,accounting, internal audit and software development.

In itsestablishment phase, the majority of processes carried out in Tecnovatewere for ebookers' U.K. operations and this process of U.K.function transfer has continued with the acquisition of Travelbag.Additionally, our other operations in Finland, Sweden, Norway, Spain,Switzerland, France, Germany, Holland and Ireland have also transferredfunctions where appropriate and we envisage that this trend willcontinue.

Tecnovate is now seeking to offer its services tothird parties, particularly those operating in the travel sphere. Totake on this extra capacity, Tecnovate has expanded its premises from22,000 sq ft to 56,000 sq ft.

Reorganization and Cost ReductionProgram

In March 2004, we are commencing the realigning of ourbusiness into two divisions. The first division is responsible forconsumers and supplier relationships and the second for operations andtechnology. This will create a simpler organization structure that isfocused on maximizing good customer experience and"right-first-time" operational and systemsdelivery.

In addition, as part of a cost reduction program, weplan to standardize websites and systems technologies throughout theGroup, dispose of nine retail outlets following successful online

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conversion across Europe and the UnitedKingdom, and remove duplicate functions and delayering managementfollowing our reorganized business structure. We plan to reducestaffing requirements as we continue to automate and standardize oursystems, which will involve some headcount reduction.

Industry background

The market for travelproducts and services in Western Europe

Western Europe is not asingle market, but a collection of numerous markets based in individualcountries with varied languages and cultures. To reach a significantnumber of European households, we believe that websites not only needto be translated into several languages, but also need to tailor theirproduct and content to accommodate the different cultures.

According to data provided by IATA, at December 31, 2003, there were21,659 travel agents accredited to IATA in the 12 countries in WesternEurope, excluding Belgium, currently serviced by ebookers, including2,855 in the United Kingdom, 4,533 in Germany and 3,812 in France. Inaddition, throughout Western Europe there are many non-IATA accreditedtravel agents.

Travel agents

Travel agents typicallybook reservations through GDSs, such as Amadeus, Sabre, Worldspan, andGalileo, which provide real-time access to data on schedules, fares,availability and other information for airline tickets, hotel rooms andother travel products and services. GDSs constantly update their data,showing as many as one million airfare changes daily. Customerstraditionally have relied on travel agents to access and interpret suchrapidly changing information. As a result, the ability of customers toobtain the most favorable schedules and fares has depended, andcontinues to depend, on the skill and experience of individual travelagents.

Published fares

The prices for air travel,hotel rooms and car hires shown on GDSs are published fares whichtravel suppliers can sell either directly to the passenger or through atravel agent accessing a GDS. Typically these prices are set a year inadvance. A commission is paid to the travel agent on each product orservice sold at the published rate.

Merchant fares (also knownas negotiated fares)

Travel suppliers, such as hotels, airlinesand car hire companies, are often unable to sell all their product atpublished rates, resulting in excess capacity. Travel supplierstraditionally have not marketed their excess capacity directly to thepublic at discount prices because these discount fares would competewith their own regular published fares. Therefore, the suppliersgenerally consign or sell this excess capacity through independentthird parties, who offer tickets at a discount on the regularlypublished fares. Although travel suppliers often impose restrictions onthese merchant fares, their low price generally appeals toprice-sensitive business travelers and leisure travelers with flexibleitineraries. Because these fares are not available from travelsuppliers directly, they are referred to as"negotiated","merchant" or"non-published" fares. Travel suppliers donot advertise the prices of merchant fare tickets or list these fareson GDSs, but the third-party reseller may publish them directly in themedia or otherwise, often subject to restrictions that limit a thirdparty's ability to advertise the identity of the supplier.Merchant fares are generally available up to a year in advance ofdeparture date.

Distressed fares

Distressed or latebooking fares are a sub-category of merchant fares, but ones which areavailable for sale typically 15 days or less prior to departure. Theycan offer the potential for even bigger discounts to customers comparedwith the price of the standard published fare.

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The ebookers approach

Our philosophy is to endeavor to give our customers the most choice,value, convenience and control over what and how they buy travel andtravel-related products. We specialize in the modular area of theleisure travel market. In this market consumers choose each componentof their holiday themselves, such as a hotel, flight or car hire ratherthan buying a "one size fits all" holiday, aswith the package sector of the market. We believe that modular travelis ideally suited for the internet, as internet technology allowscustomers to act like their own travel agent and choose and comparefrom thousands of constantly updating travel options. We are alsoplanning to introduce technology to allow customers to secure savingson their trip by combining travel modules, such as a car and a hotel,into a single purchase. We believe that the traditional package marketis gradually giving way to the modular approach as customers becomemore sophisticated and want to take more control of their own travelrequirements.

Benefits to the consumer

We offercustomers a wide range of benefits:

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Wide product choice.    Due to our20-year travel heritage and strategy of acquiring companies withestablished supplier relationships, we believe that we offer ourcustomers one of the widest range of merchant travel products on theinternet in Europe. Our recent acquisition of Travelbag Holdings hasfurther improved our product range, particularly in the Australasiaholiday markets. Our different brands offer different types of consumerchoices. |

|              |                                                                                                                                                                                                                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Value formoney.    The majority of our sales are discount merchant faresnegotiated directly with travel suppliers to help them sell theirexcess capacity. With merchant fares our customers benefit from pricesthat offer discounts compared with the price of the standard publishedfares. |

|              |                                                                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Choice of saleschannel.    While we encourage customers to shop online we alsooffer customers the option to purchase via the telephone or via walk-instores. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Maximum control and ease ofuse.    We believe that our website technology and wide range ofmodular travel components empowers customers to become their own travelagents. On our websites customers can choose from thousands of traveloptions from leading travel suppliers at both published and merchantrates before making their booking. We have designed our websites to beintuitive and easy to use and are continually updating them with newtechnological features. |

|              |                                                                                                                                                                                                                                                                              |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Multinationalservice.    Our websites and call centers are multilingual andmulti-currency for each of the European countries in which our productsand services are offered. Our product ranges are refined to reflectlocal travel needs and preferences. |

|              |                                                                                                                                                                              |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Customer service.    We offertelephone and e-mail support during business hours across Europe andseven days a week, 24 hours a day in the UnitedKingdom. |

|              |                                                                                                                                                                                                                                            |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Transaction security andcustomer privacy.    We provide our customers with the option ofusing industry-standard encryption and authentication measures designedto protect their information (128 bit, SSL Encryption). |

Benefits to our suppliers

We believe that, in addition tobenefiting our customers, our online travel services benefit travelsuppliers by providing them with an efficient channel to reach travelconsumers. We assist carriers in selling excess capacity withouteroding their prices on other fares, enabling carriers to increaseprofits through incremental revenues accompanied by low marginal costs.In effect, we create an electronic marketplace that matches thepurchasing needs of consumers with the available published and merchantinventory of travel suppliers.

Strategy

ebookers has a strategy that aims for high growth, while maintainingour commitment to be the lowest-cost provider in the industry. As partof our strategy in 2004, we intend to:

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|              |                                                                                                       |
|--------------|-------------------------------------------------------------------------------------------------------|
| •  | increase ourrevenues by organic growth and acquisition. This will increase ourscale and buying power; |

|              |                                                                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | increase ourrevenues by encouraging more bookings on our websites, by improvingtheir usability, functionality and in particular by improving thewebsite technology; |

|              |                                                                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | increase ourrevenues through innovative marketing and the efficient use oftechnologies such as our customer relationship management (CRM)systems; |

|              |                                                                                                                               |
|--------------|-------------------------------------------------------------------------------------------------------------------------------|
| •  | increase our revenues bycontinually improving our product range and differentiating our productoffering from the competition; |

|              |                                                                  |
|--------------|------------------------------------------------------------------|
| •  | focuson growth in our primary sector of long and mid haultravel; |

|              |                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------|
| •  | reduce our cost base and be thelowest cost provider by maximizing the use of our low-cost BPO facilityin India. |

We believe that there will be three long-term dominantplayers in the European online travel industry and we firmly intend toposition ebookers as one of these. We have firmly positioned ebookersin the long and mind haul travel market (i.e. over 5 hours flighttime), because it has greater potential for profits than the short haulmarket. Over 80% of our revenue is derived from sales to longand mid haul destinations rather than short haul European trips. Theattractions of a mid and long haul strategy can be summarizedas:

|              |                                                                                                                                                                                                                                                                                                                      |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Long and mid haul sales are muchmore profitable for us. The average revenue on a long and mid haulbooking is twice that which we can make on a short haul one. Yet, thecost of fulfillment is broadly similar. Profit on many short-haulbookings can only be made if a flight is packaged with hotel or carelements. |

|              |                                                                                                                                                                                                                                                                                                              |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | There is little competitionfrom "no frills" (e.g. Ryanair or EasyJet)and low price carriers on long and mid haul flights as their aircraftare only suitable for short haul trips. In fact, we believe thesecompanies are complementary to our business as they are educatingconsumers to book travel online. |

|              |                                                                                                                                                                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Thelong and mid haul market is bigger and is growing faster than the shorthaul market according to Boeing. The short haul market accounts for40% of holidays (and much of this is taken by "nofrills" and charter airlines), whereas mid and long haulaccounts for 60%. |

We also anticipate growth inhigh-margin non-air sales. Current projects underway to assist inreaching this goal include an overhaul of our user interface for hoteland dynamic packaging technology and development of a new Carbookerswebsite which was given its soft launch in early 2004.

A keyfocus of management is to leverage group-wide buying power to developsupplier deals. This would allow all subsidiaries to benefit from theGroup's improved negotiating position with suppliers due to itsincreasing scale and the maximization of the effect of increasednon-air sales, such as car hires and hotels. We now have locally-basedbuyers in key destinations to secure direct discount"merchant" deals with important localsuppliers. Another element of product development is to continue todevelop our presence in key high margin niche markets. So far, theseinclude luxury travel and sports breaks.

We believe that all theabove factors make us well placed to benefit from both the anticipatedgrowth in the long and mid haul market and the predicted growth in theInternet as a market for travel.

Products

Airtravel

We offer our customers merchant negotiated anddistressed discount fares on most major airlines. We resell thesetickets at prices that are usually well below standard published fares,but still above 

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what we would need to pay to acquire themfrom the airlines. The difference between what we pay for the ticketsand what we get from our customers is our revenue. We do not carryinventory risk on merchant fares and generally our mark-up is higherthan the commission we would receive for selling standard publishedfares.

We usually take these merchant fare tickets on aconsignment basis, purchasing the tickets from the airlines only whenour customers buy them from us. When merchant fare tickets are taken onconsignment, we do not have inventory carrying costs or the risk thatwe will not be able to sell tickets for more than we paid for them. Wemay in the future buy merchant fare tickets in blocks, before we havesold them to our customers and, in such case, we would bear the risk ofselling these tickets for less than we purchased them.

Airlinesgenerally do not give consumers direct access to merchant fares. Theroutes that we can offer, and the discount levels at which we can selltickets on these routes, depend upon how much availability the airlineshave. The merchant fares that we offer provide our customers with costsavings, but are sometimes subject to limitations and restrictions thatmay make them unattractive to travelers who need flexibility in theiritineraries. For our customers who cannot find a merchant fare for aparticular itinerary, we attempt to offer the published fare for thesame route.

When we sell published fares, the airline pays us acommission on the gross amount. At present, we receive commissions fromairlines that are at least as favorable as those received bytraditional travel agents. In addition, we have arrangements with asmall number of airlines to receive performance-based incentivecommissions if certain volume-based sales targets are met and, attimes, we receive marketing support from the airlines. During 2003,ebookers' margin on income (excluding incentive revenue) fromairfares was 6.6 percent (2002: 6.6 percent).

Hotelaccommodation

Our customers can use our websites to finddiscounts on hotel chains around the world, through the GDSs. Theattractive rates we can offer our customers are based on volumediscounts that we have obtained from select hotels. In general, theserates can be considerably below the hotels' published rates. Inmost instances, we can also offer our customers bookings at publishedrates, if they cannot find a discount rate that meets their needs. Weearn a commission on published rate reservations, and we earn a marginover our costs on bookings at our discount merchant rates.

Carhire

Our customers can use our websites to book hire cars atmerchant prices from several of the major car hire companies around theworld. We post these prices on our website and customers can reserveonline. We earn a margin over our costs on car hire bookings.

Cruises and tour packages

Our customers can use ourwebsites to find cruises and tour packages. We make a commission oneach tour package and on each cruise booking sold through third-partysuppliers and set a mark-up on any merchant packages sold by ourselves.We have access to discounted rates with all of the major cruise lines,including Carnival Cruise Lines, Holland America, Costa Cruise Line,Royal Caribbean International, Celebrity Cruise Lines, Fred OlsenCruise Lines, P&O Princess Cruises, Ocean Village, Norwegian CruiseLines and Star Clippers.

Travel Insurance

Customersthroughout Europe can use our websites to buy travel insuranceunderwritten by third party providers. These providers include AIGEurope Ltd, Europeiska Insurance Co Ltd, Elvia Travel InsuranceInternational and Arag Insurance Group. These companies provide us withpremium rates for various types of travel insurance, which we then sellon to our customers, either marking-up, or receiving commission fromthe provider, depending upon the country of sale.

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Niche travel products

As part ofour strategy of developing higher margin niche travel products we havedeveloped a number of specialist travel product ranges. These includeluxury travel and sports tours and sporting breaks.

"Build your own holiday"

We havetechnology on our websites to enable customers to secure even bettervalue for money by booking more than one modular item together, such asa flight with a hotel or a car. In the industry this is often called"Dynamic Packaging" technology. It differsfrom traditional "off the shelf" packages ortours because it allows consumers to create their own holidays fromscheduled modular travel options.

Other travel services

We also offer currency exchange rate information, destinationinformation, links to up-to-date weather and travel information and aglobal timezone conversion feature.

Cancellation Policy

The Company has a cancellation and alteration policy. Alterations bycustomers are treated as cancellations and cancellations are subject tocharges depending on when formal notification is received. If theCompany has to cancel, a full refund will be made with no compensation,except in the case of packages where compensation will be paid on asliding scale subject to low booking (if more than 30 days fromdeparture) and force majeure exclusions.

Enhancement andexpansion of our business relationships

As part of ourobjective of providing a range of innovative and value added servicesto our customers, we seek to continue both to widen the range of travelservices offered through our websites, as well as to provide acomprehensive offering for each service. To that end, we intend toestablish new alliances with other potential suppliers oftravel-related products and services to suit our customers'needs.

Breakdown of revenue

For the year endedDecember 31, 2003, our revenue was £66.5 million and was derivedfrom our margin on merchant air fares, our commission on publishedairfares, other travel revenue, advertising and other salesrevenue.

Revenues for the year ended December 31, 2003associated with sales in the United Kingdom were £51.9 millionand in Continental Europe were £14.6 million. For the year endedDecember 31, 2002, revenues associated with sales in the United Kingdomwere £22.1 million and sales associated with Continental Europewere £10.5 million. For the year ended December 31, 2001,revenues associated with sales in the United Kingdom and ContinentalEurope were £12.2 million and £7.5 million, respectively.All Travelbag revenue is currently associated with sales in the UnitedKingdom and is included in the above amounts from February 2003.

Seasonality

Travel is affected by seasonalconsumer demands and therefore our revenues have historicallyfluctuated significantly by quarters. In February 2003 we acquiredTravelbag Holdings, partly due to the fact that its range of long haultravel products was counter-cyclical to our existing business and hadthe effect of reducing some of our seasonal fluctuations. We continueto experience seasonal fluctuations, with the April-June quarter beingthe weakest quarter due, we believe, to customer holiday patterns andweather in key long-haul destinations. Additionally, we believe thatinternet growth is more important than seasonality in determiningchanges in our quarterly revenues.

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Operations

Fulfillment

A distinguishing feature of our business isthat we currently have in-house fulfillment capabilities in each of ourEuropean markets, with the exception of Denmark which is fulfilled viaour office in Stockholm, Belgium which is fulfilled via our office inHolland and Austria which is fulfilled via a third party and oursubsidiary in Germany. Our fulfillment capability allows us to issuetravel documentation, such as airline tickets, hotel vouchers, car hirevouchers, and travel insurance policies directly to our customers. Weare able to do this because we own international and nationalregulatory licenses, including from IATA, which are required in orderto issue airline tickets in all of our markets. In addition, we havedirect agreements with key suppliers of merchant fares, such asairlines, as well as hotel and car hire companies. We believe that ourin-house fulfillment capabilities allow us to retain higher marginsthan if we had to outsource this function.

Technology

Our technology systems organize product information obtained fromour travel services suppliers, search and filter it for customers,interact with the systems of third-party travel suppliers and automatethe processing of customer orders.

Our online storefrontfunctions through proven industry-standard hardware and a combinationof public domain, commercial and proprietary software. The majority ofour hardware is in one of two secure data centres, with 24-hourmonitoring and engineering support in a location where we have accessto high speed internet connections with emergency back up and anemergency back up power source. Customers can access our websitesthrough industry-standard personal computer internet browsers. We havedesigned our system architecture to be modular and tolerant of singlecomponent failures by using load balancing techniques. Load balancingallows more than one computer to share the task of responding tocustomer requests. This leads to greater system stability in case offailure of any individual computer and allows for the easy addition ofnew computers to increase system capacity.

We are continuallyupgrading and improving our existing operating systems and software. Wehave upgraded our web and booking server and network appliance hardwareenabling our online systems to support easily double our peak load.Overall functionality is monitored by an in-house team 24 hours a day,seven days a week.

Our servers are linked to the internetthrough 100 megabit (15 megabit guaranteed) per second links (withemergency back up) provided by Globix, Inc. We access three GDSs,Amadeus, Worldspan and Sabre, through secure internet protocol linksvia our internet connectivity as detailed above. All links aremonitored and supported 24 hours a day, seven days a week by Globix.Globix provide online availability reporting for all links. Mostlocations also have their own local internet connection as well as alink to our pan-European MPLS based system (described furtherbelow).

Travelbag, our 2003 acquisition, utilizes threefacilities to host and support their websites. Each facility providessecure internet access with emergency back up capacity.Travelbag's GDSs are provided by Amadeus and Sabre Holdings.Secure internet protocol links to GDS links are via the emergencycontingent internet access provided by each collocation (third partyhosting) facility. Travelbag utilizes an ebookers supplied andsupported web booking engine connected to Amadeus. This booking engineprovides the web customer with full access to both merchant andpublished fares.

Our merchant fares database and search engineprovide our ability to offer merchant airfares and discounted hotelroom rates and car hire rates on our websites. The merchant faresdatabase has been designed to handle the complex terms and conditionsoften attached to merchant fares. We manually enter into the databaseand update records for merchant airfares, hotels, car hire and otherproducts. Search queries to the database are dynamically assembled onthe basis of customer-supplied travel or service parameters such asdate of departure, destination and itinerary flexibility.

Thesearch engine compares the customer's itinerary with the variousrestrictions contained in our merchant fares database and then presentsthe available merchant and published fares on the same 

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page. We are continuing to enhance oursystems to provide similar comparative systems for other non-air travelproducts. Our car fare searching capability, for example, stores fareinformation directly in one of our GDSs. The software interfacesbetween our application servers and the GDSs provide us with theability to offer scheduled published airfares, hotel and carreservations, to verify availability, and to book.

We maintain arelational database of customers, containing information from pasttransactions as well as data gathered through our websites and variousmarketing programs. The information in this database is used to betterserve customers by providing personalised service and targeted offers.We do not sell or rent this information to third parties.

Standardization has been implemented to a large extent, and with theexception of Travelbag Group, we have centralized our control of oursoftware licenses and technology assets. We are actively looking topurchase an Asset Management System to help control IT procurement,asset management and licencing which will support the enlargedgroup.

System security is a major concern to us and to ourcustomers, and therefore we employ industry-standard software andprecautions for the protection of confidential information such ascredit card information and customer profiles. Unless the customerdecides otherwise, we encode all transaction-related informationtransmitted to our websites, using secure socket layer, or SSL,encryption and store it securely in our downstream processing systems.SSL encryption is a standard way of ensuring that sensitiveinformation, such as customer credit card details, is madeunintelligible to unauthorized parties. We also protect our web serversand all databases from unauthorized intrusion through the use of Ciscorouters, with strict access lists and Nokia firewalls.

In orderto process customer bookings efficiently and offer high qualitycustomer service, we are deploying a range of automation softwaresystems. We have a pan-European MPLS (Multiprotocol Label Switching)based system with guaranteed network bandwidth to each location. Onthis system we transport internal telecommunication, e-mails, contentmanagement data, information from the Hitchiker merchant fare databaseand provide remote IT support. Travelbag has a fully managed UK networklinking their office, shop and call centre facilities. This network isfully integrated into the ebookers network infrastructure.

Oursingle group-wide Avaya telephone system in conjunction with ourgroup-wide MPLS based system gives us the capability to route incomingcalls from any destination to any available agent throughout thegroup.

Marketing and brand awareness

ebookers' marketing and branding strategy is aimed atdelivering profitable sales at minimum expense. Over the last two yearsthe Group has minimized its use of mass media marketing such astelevision, concentrating instead on targeted niche initiatives.Marketing is carried out separately in each operating country in orderto cater to local consumer needs and differences. We aim to keepinternal costs lower through the use of our India BPO for a number oftasks associated with website development, maintenance andmarketing.

Our marketing utilizes both offline and online tools.Online we make extensive use of affiliates (e.g. Yahoo in the UK, and80dagar in Norway and vertaa.fi in Finland). We also make extensive useof search engine marketing with companies such as Google and Overture.We also aim to ensure that we have the correct search engineoptimization on our websites, a process that is carried out in our BPOfacility in India. Offline marketing continues to play an importantrole in our marketing mix. We employ a diverse range of tools fromnewspaper, radio and outdoor advertising to PR, partnerships, travelfairs and promotions.

We continue to employ advancedtechnologies to increase our marketing efficiency. For example during2003 we rolled out E.piphany CRM technologies designed to reducemarketing costs through better-focused marketing, improved customerservice and improved retention rates, and designed to increase customerspending by offering the best value for the most relevant products. Weare supporting this technology with improved customer access bydeveloping a single customer view across 

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all our channels — web, retail, emailand telephone. The introduction of E.piphany towards the end of 2003and also a new integrated telephone system (Avaya) were significantadvances in this respect.

In the UK we have successfullyintegrated our UK marketing department following the acquisition ofTravelbag in February 2003. We now run a function based department toensure the sharing of best practice and to deliver cost-effective andefficient marketing expertise.

Competition

Travel suppliers, conventional travel agencies, internet portals andother online service providers are our principal competitors. Many ofthese competitors may also be important suppliers or distributionchannels for us. In Europe, far more travel is booked in agencies thanin the United States, where most travel is booked directly with travelsuppliers.

Online travel service providers

The marketfor the sale of travel products and services over the internet israpidly evolving and intensely competitive. Some online travel agentsoffering services in more than one country in Europe are alreadyestablished, including Expedia, travelocity.com and lastminute.com.Additionally, nine of Europe's largest airlines, includingBritish Airways, launched an internet travel agency called Opodo in2001. According to its website, Opodo offers over 400 airlines and34,000 hotels, a substantial proportion of which we believe aremerchant fares previously available only through contracting travelagencies like ebookers. Opodo launched in Germany in November, 2001,the United Kingdom in January 2002 and France in April 2002. Opodopublicly states on its website that it plans to expand into otherEuropean countries in 2004 and beyond. The short-term and long-termeffects on our business of this joint travel agency are presentlyunclear but the shareholder airlines of Opodo, including BritishAirways, have given assurances to the European Commission in Brusselsthat they will not unfairly favor Opodo over its competition. Sitessimilar to Opodo, called Orbitz and Hotwire, have been successfullylaunched in the United States.

Traditional serviceproviders

The offline retail industry for travel products andservices is intensely competitive. Currently, our direct competitionfor merchant fares comes largely from offline companies that specializein the distribution of discounted fares on scheduled flights. It ispossible that these "bricks and mortar"companies will soon compete with us online.

Competition fromtravel suppliers

Airlines, hotels, car hire companies and othertravel suppliers generally do not offer merchant fares directly orindirectly through affiliates or GDSs. However, some offer specialpromotional prices which combine low base prices and the use offrequent user awards. Some suppliers also offer merchant fares to majorcorporate customers. Suppliers may expand their offering of specialpromotional fares or enter the merchant fare market, either of whichcould harm us. We believe that travel suppliers tend not to offerthemselves merchant fares themselves because doing so could damagetheir pricing structures and brands.

At times, standardpublished fares compete with our merchant fares. Because our customerswant fares below what suppliers and traditional travel agents areoffering, published fares generally act as a limit on what we cancharge. Suppliers offer special fares which may compete directly withour discounted merchant fares. Such fares are especially likely when"fare wars" break out between suppliers.

The internet offers an opportunity for suppliers to significantlyreduce their distribution costs and some suppliers may therefore decideto offer discount fares directly to customers online instead of throughtravel agents. Some of our important supply sources, such as BritishAirways, Quantas and Lufthansa, have signalled their intention togenerate increasing proportions of sales online, and these and othersuppliers may sell discount fares online both directly and throughairline-owned sites such as Opodo. An intensification of suchcompetition could erode or eliminate our market for merchant fares.

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We also face more limited competition inthe short-haul market from "no frills"airlines, such as easyJet and Ryanair, that only sell direct and mainlyvia the internet. Whereas our air sales are principally for mid-hauland long-haul flights covering all major airport destinations,currently these low-cost airlines focus on limited numbers of cities inthe short-haul market and often offer flights to smaller airports.

We also face similar competition from car hire companies and hotels,as well as online companies that may specialize in the provision ofdiscount hotel bookings or reduced rate car hire.

Competitionfrom global distribution systems

Amadeus, a leading EuropeanGDS in Europe, owns the Italian travel website eviaggi.com and has ajoint online travel agency in Spain with Terra Lycos, called Rumbo, anda significant stake in Opodo. We may face competition from Amadeus inthese and other markets across Europe as it expands its direct andjoint venture online travel agency relationships across Europe.

Intellectual Property and Proprietary Rights

Weown the copyright in the software that runs our database search enginefor merchant and published fares. In addition, we are the registeredproprietor of the ebookers plc name and of various other Group brandregistered domain names (including those relating to Travelbag andBridge the World) and trade marks, in the U.K. and EU.

We do nothold any patents, but we do hold a number of licenses for thetechnology that we use. These are all, to a greater or lesser extent,important to our business.

Legal Proceedings

Neither we nor any member of our Group is currently involved in anylegal or arbitration proceedings (including any such proceedings whichare pending or threatened of which we are aware) which may have or havehad in the past 12 months a significant effect on the Group'sfinancial position.

Regulation

Regulation ofthe internet

There is no specific regulator for the internet inthe United Kingdom or in Europe, although there are already many lawsapplicable to internet-related activities. Currently, the enforcementof these laws may, in part, fall within the powers of a number ofregulatory bodies. In certain jurisdictions, including the UnitedKingdom, self-regulation and regulation through membership of voluntaryschemes is significant.

The application of existing laws to theinternet is currently being clarified and refined. New legislation onelectronic commerce is in the process of being implemented in thejurisdictions in which we operate and there are further relevantlegislative proposals in the European Union, the United Kingdom and theother jurisdictions in which we operate. This environment gives rise toconsiderable uncertainty. The lack of case law and regulatory guidancerelating to new legislation further contributes to the uncertainsituation. The main issues relating to regulation of the internet whichaffect our business are set out below.

Data Protection

Because we collect information about our customers, we are subjectto rules and regulations concerning the treatment of thisinformation.

The European Union adopted a directive on theprotection of individuals with regard to the processing of personaldata and the free movement of such data on October 24, 1995 (the"Data 

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Protection Directive").Personal data is data relating to a natural person (and in certainjurisdictions, including Switzerland, data relating to legal persons)who can be identified from that data. The Data Protection Directiveapplies to companies established in the European Union or usingequipment in the European Union to process personal data. Under theDirective, individuals are granted certain rights in respect of theirpersonal data, including the right to know the identity of those whohold and access personal data about them, the right to know from wheretheir personal data originates, the right to have inaccurate personaldata corrected, the right to recourse in the event of unlawfulprocessing of their personal data and the right to object to theirpersonal data being used for direct marketing. The Data ProtectionDirective also requires compliance with certain principles that applyto the use of personal data, which may include obtaining certainconsents from such individuals. Similar rights are granted underlegislation in Norway and Switzerland.

We send outside theEuropean Economic Area ("EEA") the personaldata that we collect from our business operations. In particular, wesend such personal data to our Indian subsidiary, Tecnovate eSolutionsPrivate Limited. Unless certain exemptions apply, including obtainingthe unambiguous consent of the individual, personal data may not besent outside the EEA unless the country to which it is sent has"adequate" data protection measures. The DataProtection Directive does not, however, define"adequate". While a small number ofcountries, including Switzerland, have been found by the EuropeanCommission to provide an adequate degree of protection, the EuropeanCommission has not yet reached a favorable conclusion about themajority of countries outside the EEA to which we might wish to sendpersonal data, including India. However, we have nearly completed theprocess of putting in place appropriate contracts to regulate thetransfer of data from our Group to Tecnovate.

We also sendpersonal data to the United States. While the United States as a wholeis not considered to provide "adequate"standards of data protection, the European Commission and the UnitedStates have agreed to a "Safe Harbor"arrangement which the European Commission considers to offer"adequate" protection. Under the Safe Harborarrangement, which has been in force since November 2000, United Statescompanies may sign up to adhere to the Safe Harbor principles which areenforced in the United States. Subject to adherence by a U.S. companyto the Safe Harbor principles, transfers of data to that company in theUnited States are permitted. However, the number of signatories in theUnited States to the Safe Harbor principles have been limited todate.

Transfers to countries outside the EEA may also be madewhere there are adequate contractual provisions in place to ensure thesecurity of the data. This is the basis for our Groupwide exercise inputting such contracts in place, referred to above, regardingTecnovate. Two such contracts have already been approved as adequateand the Commission is considering whether other proposed contracts andcodes are adequate. The use of alternative contracts is not precludedalthough in some countries the contract must be lodged with (andtherefore approved by) the national data protection authority.Similarly, in Switzerland, transfers to E.U. Member States arepermitted and where data is transferred to a country which does nothave adequate data protection (such as the United States) the recipientmay be bound contractually to observe the Swiss standard.

TheData Protection Directive has been implemented in all of the Europeanjurisdictions in which we operate, other than France. The DataProtection Directive was implemented into U.K. law by the DataProtection Act 1998, which came into force, subject to certaintransitional arrangements, on March 1, 2000. We are currentlyregistered under the Data Protection Act 1998 in the UnitedKingdom.

We gather information about our customers by askingthem to fill out online forms when they purchase a product or servicefrom us. We save this information and use it for marketing purposes. Wealso make use of cookies, an electronic file which is automaticallyattached to a user's hard drive, to track demographic informationand to target advertising. Cookies, which are personal data, are alsoregulated by the Data Protection Directive.

Over the last yearwe have put in place, and we are implementing, a raft of measures toensure Group compliance with data protection legislation. This includesthe formation of a Data Protection Committee of senior legal and othermanagement personnel, the drafting of an IT Groupwide security

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policy, and the commissioning of a UK dataprotection audit by external legal counsel, which has just beencompleted. We have also adopted, across the Group, data protectioncompliance policies and we undertake regular data protection trainingfor our staff. We have also joined the TRUSTe privacy program that isintended to build users' trust and confidence in the internet bypromoting the use of fair information practices. TRUSTe is a non-profitinitiative which promotes the principles of disclosure and informedconsent on the internet.

ePrivacy Directive

Thedirective concerning the processing of personal data and protection ofprivacy in the telecommunications sector (the"Telecommunications Data ProtectionDirective") has been repealed and replaced by the recentlyadopted ePrivacy Directive which came into force in the United Kingdomin December 2003. The former directive had been implemented in thecountries in which we operate and covers the processing of personaldata in connection with publicly available telecommunications servicesand networks, and includes provisions relating to the use of trafficdata and location data and requirements to inform the subscriber oruser of the types of traffic data which are processed and of theduration of such processing. These restrictions limit the amount oftime we can hold such data and restrict our ability to use personalinformation that we acquire or hold.

The ePrivacy Directive alsospecifically addresses direct marketing by e-mail and SMS which was notclearly addressed under the Telecommunications Data ProtectionDirective. Currently, there are variations in national legislationrelating to the use of unsolicited e-mail for the purpose of marketing("spam"). In some E.U. Member States spam isprohibited while, in others, users are given the right to opt out ofreceiving spam. Although it is not our policy to use spam, our futureability to do so will be affected by this legislation. Provisions ofthe Directive which may affect our business in the future includeprohibitions on the use of automated calling machines, facsimilemachines, e-mail or SMS for the purposes of direct marketing unless therecipients have given their prior explicit consent (e.g. by way ofopting in rather than by not opting out). Limited exemptions apply inrelation to the same entity marketing similar products or services toexisting customers provided that the customer is on each occasion givena clear right to object to receiving further direct marketing.

E-commerce Directive

In June 2000, the European Unionadopted the directive on legal aspects of electronic commerce in theInternal Market (the "E-commerce Directive").The aim of the E-commerce Directive is to ensure free movement ofelectronically provided services, including e-commerce, within themember states of the European Union. In the United Kingdom, thisdirective was implemented in July 2002 through the ElectronicCommunications (EC Directive) Regulations 2002. Provisions of thedirective which are of significance to our business include:

|              |                                                                                                                                                      |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | that E.U. Member States must ensure thattheir legislation allows contracts to be concluded electronically,subject to a limited number of exceptions; |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | on the matter of jurisdiction, the laws ofthe country of the service provider will apply to the provision of itsservices over the internet (the "country of originprinciple"). However, the country of origin principle doesnot apply to contractual obligations concerning consumer contracts orto the permissibility of unsolicited e-mail. We are, therefore, subjectto all mandatory consumer protection laws and laws prohibiting, orlimiting, spam in each of the countries where our customers arelocated; |

|              |                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | where unsolicited e-mail ispermitted in a particular E.U. Member State, it must be identifiedclearly and unambiguously as unsolicited commercial communications, assoon as it is received by the user. Furthermore, in such Member States,the senders of unsolicited e-mail are required to consult and observethe register of those not wishing to receive unsolicited commerciale-mails; and |

|              |                                                                                                                                                                                        |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the requirement to providethe following information prior to the formation of a contract: thedifferent technical steps to follow to conclude the contract; whetheror not the concluded |

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|        |                                                                                                                                                                                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | contract will be filed by the serviceprovider and whether it will be accessible by the customer; thetechnical means for identifying and correcting input errors prior tothe placing of the order, and the languages offered for the conclusionof the contract. |

We are making every effort to ensure that wecomply with these provisions.

Regulation of electronicsignatures

In December 1999, the Council of the European Unionalso adopted a directive on the common framework for electronicsignatures (the "Electronic SignaturesDirective"). This establishes a framework in which"certification service providers" issue"qualified certificates" which linkindividuals to their public keys in the case of public key encryptionor other devices used to verify electronic signatures. The ElectronicSignatures Directive also sets out criteria for the legal recognitionof electronic signatures, in the hope that this will promote e-commerceboth within the European Union and with other countries.

In theUnited Kingdom, the Electronic Signatures Directive has beenimplemented through the Electronic Communications Act 2000 and theElectronic Signatures Regulations 2002. This provides for an approvalsscheme for businesses and other organizations providing cryptographyservices and provides for the legal recognition of electronicsignatures. Encryption involves the transformation of data so that anymessage content remains hidden, except to those who have access to adecryption key. We use encryption techniques to ensure that ourcustomers' payment details are secure and we may, in the future,use electronic signatures.

Regulation of consumer distanceselling contracts

The 1997 directive on the protection ofconsumers in respect of distance contracts (the "DistanceSelling Directive") was required to be implemented by E.U.Member States by June 4, 2000. The purpose of the directive is toensure that there is a minimum level of information given to the buyerof goods or services over the internet, followed by a cooling-offperiod. Most of the provisions of the directive do not, however, applyto contracts for the provision of accommodation, transport, catering orleisure services, where those services are to be provided on a specificdate or within a specific period. Contracts for financial services(e.g., foreign exchange and insurance policies) are also entirelyexcluded from the Distance Selling Directive as they are regulatedseparately. The Distance Selling Directive has been implemented in allE.U. Member States in which we operate other than in Denmark. In theUnited Kingdom, the directive has been implemented through the ConsumerProtection (Distance Selling) Regulations 2000.

On September 23,2002, the European Parliament and E.U. Council adopted a directive ondistance marketing of consumer financial services (the"Financial Distance Selling Directive"). E.U.Member States will need to pass legislation which imposes consumerprotection measures upon financial services product providers and theirintermediaries by October 9, 2004. The Financial Distance SellingDirective requires that providers of financial services exclusively bymeans of an organized distance sales scheme, including by internet ande-mail, provide consumers with:

|              |                                                                                                                                                                                         |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | certaininformation in good time prior to the conclusion of the contract(relating to the supplier, the financial service, the distance contractand the consumer's right to redress); and |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the right to withdraw from the contractwithout penalty exercisable within a period of at least 14 days(relevant exemptions from this rule include foreign exchange servicesor travel and baggage insurance policies or similar short-term policiesof less than one month's duration or insurance policies where aclaim is made during the withdrawal period) from the date the contractis made or the date on which the consumer receives the terms andconditions, whichever is later. |

We already offer our customers a"cooling off" period for our travel insurancepolicies. E.U. Member States will be allowed to provide for appropriatesanctions for failure to comply with the standards of the directive,including allowing the consumer to cancel the contract at any time freeof charge.

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The Regulation on the jurisdiction,recognition and enforcement of judgments in civil and commercialmatters (the "Brussels Regulation") enteredinto force on March 1, 2002 and applies to all E.U. Member Statesexcept Denmark. The Brussels Regulation permits consumers who enterinto online contracts, in many cases, to sue in their own jurisdictionirrespective of the location of the other party. Online serviceproviders who are seeking to bring an action against consumers locatedin the European Union must do so in the consumer's homecountry.

Until these directives and other national measures arefully implemented in the various E.U. jurisdictions in which weoperate, our activities in the field of electronic commerce will remainsubject to a large number of uncertainties within Europe andelsewhere.

Regulation of the travel industry in Europe

The European regulatory environment for the travel industry ischaracterized by different and sometimes conflicting rules andregulations in respect of licenses, bonding and other areas. Inexpanding across Europe, ebookers has had to ensure that each of itsoperating subsidiaries complies with the appropriate local regulatoryregime. There is harmonization underway in some of these areas amongthe E.U. member countries, such as through directive 90/314 on packagetravel, holidays and tours, but implementation of such harmonizationdirectives could take several years.

Licensing and bonding

IATA imposes rules and regulations regarding the sale anddistribution of airline tickets on its members. IATA is a voluntaryorganization primarily concerned with international, scheduled airtransport. Most of the world's major airlines are members ofIATA. IATA operates an accredited travel agent program for those travelagents selling scheduled air transport services. Although there may beno legal requirement for a company selling airline tickets to be amember of IATA, it is unlikely that any airline would allow a non-IATAmember to sell its tickets. ebookers plc itself is not a member ofIATA; however, Flightbookers Ltd. and our Dublin call centers aremembers of IATA, as are our other European subsidiaries.

United Kingdom

U.K. Civil Aviation AuthorityRegulations 1995 (Air Travel Organiser's Licensing) require anyperson making available air travel in the United Kingdom to hold and bein compliance with ATOL. The ATOL system is a statutory scheme managedby the Civil Aviation Authority (CAA) to protect the public from losingmoney or being stranded because of the failure of a business sellingflights or package holidays by air.

In most cases, the ATOLprotection works by requiring each holder of an ATOL licence to obtainand keep in force a bond (a financial guarantee). The CAA uses thisfinancial guarantee in the event that the ATOL holder becomes insolventto repatriate passengers on holiday at the time and to repay those whohave not had their holiday.

The CAA will also satisfy itselfthat a business applying for an ATOL is a fit person to hold a licenceand that it has adequate funds to meet its business needs beforegranting an ATOL license.

The CAA satisfies itself annually asto the financial fitness of ATOL holders. This assessment, which isusually made by reference to the ultimate parent company in the case ofgroups, considers the "free assets" and riskturnover of the business. Free assets include net current assets thatare readily recoverable and the written down value of any assetscapable of supporting borrowing, normally freehold and long leaseholdproperties in the UK, net of any borrowing secured on them. Riskturnover is assessed by reference to projected turnover for the nextfull year of operation. The CAA requires an adequate ratio between freeassets and risk turnover. This ratio varies between 5% and3% depending on the CAA's assessment of the risksinvolved.

Flightbookers Ltd., Travelbag Limited and Bridge TheWorld Travel Service Limited each hold ATOL's and provide bondsaccordingly. Flightbookers Ltd. holds the trading name ebookers.com inthe United Kingdom as well as Flightbookers.

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The Air Travel Organiser's Licenseauthorizes Flightbookers Ltd., Travelbag Limited and Bridge The WorldTravel Service Limited to make available flight accommodation to aspecified level of "licensable business". Thelevel of bonding that has to be provided by an ATOL holder isdetermined by projected "licensablebusiness".

There are four categories of licensablebusiness. Three of these cover sales to the public: "fullybonded", "scheduled bonded" and"agency". Flightbookers Ltd, TravelbagLimited and Bridge The World Travel Service Limited are licensed tomake sales to the public across all three of these categories ofbusiness. The remaining category, "ATOL toATOL", covers sales from one ATOL holder to another.Flightbookers Ltd, Travelbag Limited and Bridge The World TravelService Limited are not licensed for this category of business.

France

In France, authorized travel agents mustmeet the requirements of Law no. 92-645 dated July 13, 1992 and decreeno. 94-490 dated June 15, 1994. In addition, French regulations requirethat a travel agency provide a financial guarantee from a bank or be amember of the Association Professionnelle de Solidarité deTourisme ("APS"). ebookers France doesnot subscribe to the APS, bond protection is in place through Banque deBaecque Beau. It is also a legal requirement that a travel agency takesout an insurance policy that would indemnify clients for lossessuffered with respect to faults committed by the travel agency.

Finland

Finnish regulations require travelagents selling airline tickets in Finland to hold a license issued bylocal authorities and, if a travel agency sells package tours, theseregulations also require it to be bonded.

Ireland

In Ireland, travel agencies arerequired to be members of IATA and also to hold a Tour Operator'sLicense from the Commission for Aviation Regulation. A bank guaranteeor bond is required equivalent to 4 percent of the travelagency's projected IATA Bank Settlement Plan("BSP") cash revenue. Staff qualificationsare also a mandatory requirement.

Sweden

InSweden, travel agents and tour operators need to be licensed by IATA inorder to issue airline tickets. If a travel agency or tour operatorsells package tours, it must place a financial guarantee with a Swedishauthority, the Kammarkollegiet.

Germany

Travel agencies in Germany are required to possess a certificate ofbusiness registration from the Trade Register. In order to issuetickets, travel agencies in Germany must be licensed by IATA. If atravel agency sells its own package tours, then it must supply securityfrom a third party to the traveller. Usually this is effected throughan insurance policy benefiting the traveller.

Spain

In Spain, travel agencies must hold alicense issued by the competent Autonomous Regional Authority("Comunidad Autonómica").ebookers' Spanish subsidiary maintains both wholesale and retaillicenses. A full inspection of the premises and facilities ofebookers' Spanish subsidiary has been conducted and approved.Travel agencies in Spain are also required to be insured and bonded. Inorder to issue tickets for air travel, an additional bond must beissued to IATA. Our Spanish subsidiary, both with respect to itswholesale and its retail activities, is also subject to the NationalUnion of Travel Agencies ("UNAV"), a bodycomprised of only licensed travel agencies in Spain.

The Netherlands

In The Netherlands, there arestrict regulations governing travel agents established by the DutchTravel Agents Association ("ANVR"). Althoughthere is no legal requirement for a Dutch travel 

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agency to be a member of ANVR, it isunlikely that many local customers would purchase travel services froma non-ANVR member. ANVR member travel agents must satisfy a number ofongoing requirements. For example, they are obliged to participate inthe Contingency Fund ("SGR"), to accept thedecisions of the Travel Arbitration Board, and to implement ANVR traveland booking terms and conditions. All reservation staff members alsomust be qualified, and are subjected to an annual review insatisfaction of this requirement. In addition to these generalrequirements, there are separate requirements for admission to theANVR.

Switzerland

There is no licenserequired in Switzerland to open a travel agency, however it is unlikelythat many local customers would purchase travel services from a companythat is not a member of the Fonds de Garantie de la Branche du Voyage("FGBV"), a voluntary organization primarilyconcerned with travel agencies in Switzerland. Our Swiss subsidiary isa member of the FGBV. In order to maintain its membership in FGBV, atravel agency must pay a fixed amount related to gross sales from theprevious year. FGBV acts as a guarantee for all clients who purchasetheir travel from a travel agency or tour operator that is an FGBVmember. In case of bankruptcy of a travel agency or tour operatormember of FGBV, the FGBV will make sure that the travel purchased by aclient takes place as originally arranged with the bankrupt FGBVmember. Besides this bonding requirement, the FGBV also imposes on itsmembers certain minimum standards with respect to proper insurancecoverage and other matters.

Our Swiss subsidiary is also amember of IATA Switzerland. Our BSP monthly invoice is covered by abond towards BSP Switzerland (estimated six weeks BSP revenue). Thisbond can be reduced or even cancelled if all financial criteriaspecified by BSP Switzerland are matched during the two followingyears. ebookers Switzerland matches six of the seven criteria so far.Also, each IATA travel agency must have at least one travel agent thatholds an IATA diploma.

Norway

In Norway,travel agencies must be a member of the Norwegian Travel GuaranteeFoundation ("RGF") in order to sell airlinetickets in Norway. Our Norwegian subsidiary is a member of RGF.

Additional Regulation for Sales of TravelInsurances

We also are subject to local regulatoryrequirements because we sell travel insurance. In the United Kingdom,for example, any insurance company that provides travel insurancethrough travel agents requires authorization under the U.K. insurancelegislation. Therefore, our ability to sell travel insurance in theUnited Kingdom also depends upon the continued authorization of theunderlying insurance provider. In other jurisdictions the sale ofinsurance is frequently subject to detailed regulation. In Spain,certain regulations on insurance agreements and insuranceintermediation apply to the sale of travel insurance by travelagencies, a service which travel agencies are encouraged by law toprovide pursuant to Travel Law No. 21/1995. In France, a customerbuying a ticket cannot be obliged to buy insurance at the same time, asthis is classed as a "forced sale".

Consumer protection regulation in the travel industry

Sincewe sell travel products and services, we are subject to traditionalconsumer protection legislation.

The laws relating toconsumers' rights in relation to travel differ from jurisdictionto jurisdiction, although in the European Union these are largely basedon a common directive on package travel, package holidays and packagetours. Consumer protection regulations address problems of misleadingadvertising, consumer credit agreements and contracts concluded onunfair terms. For example, in relation to consumer credit agreements,consumers are regularly protected against unfair credit terms and mustreceive clear information as to rates of charges and interest.

In France, the law of 1992, as well as case law, provides thattravel agencies may be held liable for each part of the service theyoffer, even when this service is performed by other people. Thisresponsibility should be covered by the insurance policy that Frenchtravel agents are obliged to obtain.

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In Germany, the statutory provisionsimplementing Directive 90/314 on package travel, package holidays andpackage tours stipulate additional protections for the consumer beyondthose required by the directive, such as subjecting day trips to theGerman regulations, not just those holidays that exceed 24 hours as isthe case under Directive 90/314 itself.

In Norway, consumerprotection laws are quite strict and cover several fields that arerelevant to our business, (e.g., distance selling, selling of insuranceto consumers, consumer credit agreements, and the sale of packagetours).

In Spain, in addition to traditional consumerlegislation, there exists Law 21/1995 implementing Directive 90/314 onpackage travel, package holidays and package tours. There also existfurther laws in respect of travel agencies that establish additionalconsumer protections regarding information to be given by travelagencies to their customers.

Our Swedish subsidiaries must abideby the provisions of the Act (1992:1672) on Package Tours, whichstipulates requirements as to the information to be provided by travelagencies to their customers, the contents of the travel contract,certain rights of consumers, etc.

In Finland, legislation basedon the package travel directive is also in force.

InSwitzerland, consumers are protected by several laws that increase thelevel of responsibility of travel agencies, and particularly touroperators, towards their customers. For example, travel agencies andtour operators must hold a specific insurance in order to act as atravel agency or tour operator. Also, tour operators must be members ofa Guarantee Organization. In case of bankruptcy of a member of aGuarantee Organization, the Guarantee Organization will make sure thatthe travel purchased by clients of the member travel agency takes placeas planned. There is also a specific public organization("Ombudsman") which acts as a mediatorbetween clients and travel agencies/tour operators in case a complaintshould go before a court.

4.C Organizational Structure

ebookers plc is the parent of a group of companies and it holds theentire share capital of each of its subsidiary organizations, excludingTecnovate eSolutions Private Limited (formerly Technovate Data andServices Private Limited) of which ebookers indirectly ownsapproximately 97 percent of the registered share capital, with thebalance being held by Kipotechniki BVBA, Belgium. The details of eachof the subsidiary organizations as of March 19, 2004 are describedbelow:

|                                        |  |                         |  |                    |  |                |  |  |  |  |  |  |  |  |
|----------------------------------------|--|-------------------------|--|--------------------|--|----------------|--|--|--|--|--|--|--|--|
|                                   |  | Countryof incorporation |  | Principal activity |  | Class ofshares |
| Subsidiary undertakings of ebookersplc |  |
| Airways MICAB                          |  | Sweden                  |  | Holdingcompany     |  | Ordinary       |
| CallbookersLimited                     |  | England                 |  | Holdingcompany     |  | Ordinary       |
| CruisebookersLimited                   |  | England                 |  | Dormant            |  | Ordinary       |
| CarbookersLimited                      |  | England                 |  | Dormant            |  | Ordinary       |
| EbookersSA                             |  | Switzerland             |  | Travelagent        |  | Ordinary       |
| Ebookers.com DeutschlandGmbH           |  | Germany                 |  | Travelagent        |  | Ordinary       |
| Ebookers.comLimited                    |  | England                 |  | Dormant            |  | Ordinary       |
| Ebookers.ieLimited                     |  | Ireland                 |  | Travelagent        |  | Ordinary       |
| Ebookers.noAS                          |  | Norway                  |  | Travelagent        |  | Ordinary       |
| Flightbookers.comLimted                |  | England                 |  | Dormant            |  | Ordinary       |
| GatePacific Limited                    |  | Mauritius               |  | Holdingcompany     |  | Ordinary       |
| Hotel BookersLimited                   |  | England                 |  | Dormant            |  | Ordinary       |
| InsurancebookersLimited                |  | England                 |  | Dormant            |  | Ordinary       |
| LaCompagnie Des Voyages SA             |  | France                  |  | Travelagent        |  | Ordinary       |
| Mr JetAB                               |  | Sweden                  |  | Travelagent        |  | Ordinary       |
| Oy ebookers FinlandLimited             |  | Finland                 |  | Travelagent        |  | Ordinary       |
| Reisbureau NovaBV                      |  | Netherlands             |  | Travelagent        |  | Ordinary       |
|                                        |

37

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|                                                                  |  |                         |  |                              |  |                     |  |  |  |  |  |  |  |  |
|------------------------------------------------------------------|--|-------------------------|--|------------------------------|--|---------------------|--|--|--|--|--|--|--|--|
|                                                             |  | Countryof incorporation |  | Principal activity           |  | Class ofshares      |
| Studentbookers.comLimited                                        |  | England                 |  | Dormant                      |  | Ordinary            |
| TakeOff Reisen                                                   |  | Germany                 |  | Being woundup                |  | Ordinary            |
| Tecnovate eSolutionsLimited                                      |  | England                 |  | Dormant                      |  | Ordinary            |
| TecnovatePrivateLimited                                          |  | England                 |  | Dormant                      |  | Ordinary            |
| TecnovateUKLimited                                               |  | England                 |  | Dormant                      |  | Ordinary            |
| TravelbagHoldings Limited                                        |  | England                 |  | Holdingcompany               |  | Ordinary            |
| Viajes DimensionesSL                                             |  | Spain                   |  | Travelagent                  |  | Ordinary            |
| Subsidiaryundertakings of Airways MIC AB                         |  |
| EbookersAB                                                       |  | Sweden                  |  | Dormant                      |  | Ordinary            |
| STTAirways AB                                                    |  | Sweden                  |  | Travelagent                  |  | Ordinary            |
| Subsidiaryundertaking of Callbookers Limited                     |  |
| Flightbookers Limited                                            |  | England                 |  | Travel agent                 |  | Ordinary,Preference |
| Subsidiary undertaking of GatePacific Limited                    |  |
| Tecnovate eSolutions PrivateLimited                              |  | India                   |  | Business Process Outsourcing |  | Ordinary            |
| Subsidiary undertakings of MrJet AB                              |  |
| Mr Jet(Denmark)                                                  |  | Denmark                 |  | Travelagent                  |  | Ordinary            |
| Mr Jet(Finland)                                                  |  | Finland                 |  | Dormant                      |  | Ordinary            |
| MrJet (Norway)                                                   |  | Norway                  |  | Travelagent                  |  | Ordinary            |
| Subsidiaryundertakings of STT Airways AB                         |  |
| BiljettakutenAB                                                  |  | Sweden                  |  | Dormant                      |  | Ordinary            |
| STTAirways BusinessAB                                            |  | Sweden                  |  | Dormant                      |  | Ordinary            |
| STTAirways NetAB                                                 |  | Sweden                  |  | Dormant                      |  | Ordinary            |
| Subsidiaryundertakings of Travelbag HoldingsLimited              |  |
| TravelbagLimited                                                 |  | England                 |  | Travelagent                  |  | Ordinary            |
| Bridge The World TravelService Limited                           |  | England                 |  | Travelagent                  |  | Ordinary            |
| Subsidiaryundertaking of Travelbag Limited                       |  |
| Travelbag(Australia) Pty Limited                                 |  | Australia               |  | Travel agent                 |  | Ordinary            |
| Subsidiary undertaking ofBridge The World Travel Service Limited |  |
| Worldbookers Limited                                             |  | England                 |  | Dormant                      |  | Ordinary            |
|                                                                  |

4.D Property, plants andequipment

The Group owns four freehold properties in the UnitedKingdom and leases properties in the United Kingdom, other Europeanoperating locations and New Delhi, India.

A brief description ofeach of the properties material to the Group is set out below:

ebookers plc has its headquarters located in central London at 25Farringdon Street, where we lease approximately 11,600 square feet ofoffice space. The current lease expires in January 2007.

Flightbookers Ltd. has leases in excess of two years for its shopsat Gatwick Airport and Tottenham Court Road and the current leases forthose shops expire in March 2008 and June 2011, respectively.Flightbookers Ltd. also has a shop at Heathrow which it holds under afive year agreement with a six month notice period. This agreementexpires in May 2008.

Travelbag Ltd. has offices at Alton inHampshire where it owns the freehold (11,127 sq ft). It also holds thefreeholds of both its call center in Alton, and its office inKnutsford, Cheshire. The 

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Company occupies a 10,000 sq ft DistributionCentre in Alton the lease for which expires in June 2006. It holdsleaseholds for retail outlets located at Strand in London, Winchester,Tunbridge Wells, Solihull, Leeds, Cheltenham, Nottingham and Cardiff.It has a freehold retail outlet in Alton, which is in the process ofbeing sold.

Bridge the World Travel Service Limited holds thelease for a 13,338 sq ft (approx.) property in Camden, London whichcomprises that company's sales and back office and Flightbookerscall centre and back office. It also leases retail outlets in RegentPlace, London and Kingston, Surrey.

Tecnovate has various leasedproperties comprising a total of 56,000 sq ft, the largest of which at24,599 sq ft is leased for 9 years to July2012.

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ITEM5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Thefollowing discussion of the financial condition and results ofoperations of ebookers plc should be read in conjunction with thefinancial statements and related notes thereto located elsewhere inthis Annual Report. Our consolidated financial information included inthis discussion has been prepared in accordance with US GAAP. Thisdiscussion includes forward-looking statements based on assumptionsabout our future business. Our actual results could differ materiallyfrom those contained in the forward-looking statements.

Introduction

ebookers plc is a leading pan-European onlinetravel agency, selling travel products and services on the Internetthrough websites servicing 13 different countries and in ninelanguages. We currently have websites in the United Kingdom, Belgium,Denmark, Finland, France, Germany, Austria, Ireland, The Netherlands,Norway, Spain, Sweden and Switzerland.

Since the inception ofour business in 1999 through the year ended December 31, 2003, we haveincurred cumulative net losses of £86.8 million (excluding othercomprehensive losses of £0.5 million). Our revenue has grown to£66.5 million in 2003 from £32.6 million in 2002 and£19.7  million in 2001.

Factors affectingresults

In  2003, ebookers plc saw strong growth inrevenue, achieved despite the challenging market conditions that flowedfrom the SARS epidemic, the Iraq War and the unusually hot weather inEurope in the summer which may have pursuaded some of our would-be longand mid haul passengers to enjoy the hot weather at home, or to go toshort haul European destinations instead. Also, in line with ourstrategy to buy predominantly offline "bricks andmortar" travel companies and convert them to the Internetusing our technology and expertise, on February 7, 2003 we acquiredTravelbag, a UK travel agency specializing in long-haul destinations,significantly increasing ebookers' size and revenue. Since thedate of this acquisition we have worked to integrate the Travelbaggroup within the ebookers group and to achieve synergies and economiesof scale.

We currently anticipate a continuation of thefollowing factors affecting our revenues and costtrends:

|              |                                                                                                      |
|--------------|------------------------------------------------------------------------------------------------------|
| •  | The continuingincrease in popularity throughout Europe of the Internet as a mediumfor buying travel. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Thegrowing trend among our customers of using our services to buy a widerrange of travel products other than just flights. This change inproduct mix is helping our margins as non-air products generally giveus a higher margin than airfares. We are seeking to encourage thistrend with new technology and strengthened management in ournon-airfare sales areas such as car hire, hotel accommodation andtravel insurance. For example, we are overhauling our user interfacefor hotel and dynamic packagingtechnology. |

|              |                                                                                                                                                                              |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Our acquisitionstrategy, whereby we aim to buy predominantly offline"bricks and mortar" travel companies andconvert them to the Internet using our technology and expertise. |

|              |                                                                        |
|--------------|------------------------------------------------------------------------|
| •  | The expansion of our businessthroughout Europe, in part byacquisition. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Our increasedsize through acquisition and organic (non-acquisition) growth, allowingus to further benefit from economies of scale with our cost base(expenses as a percentage of total revenue) and better negotiatingpower with our suppliers. With our lower cost Indian BPO facility andour automation technology, we aim to maximize these benefits by seekingto ensure that our revenues rise faster than ourexpenses. |

|              |                                                                    |
|--------------|--------------------------------------------------------------------|
| •  | Potential growth in ourprimary sector of long and mid haul travel. |

In 2003, ourbusiness was affected positively by all of these factors. Our revenuesgrew significantly due to both organic Internet-driven growth, and theacquisition of Travelbag. 

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Additionally, we benefited from the increasein non-airfare sales as a proportion of our revenue. We also reducedthe relative size of our general and administrative, product technologyand development expenses, as a percentage of ourrevenue.

In March 2004 we arecommencing the realigning of our business into two divisions. The firstdivision is responsible for consumers and supplier relationships andthe second for operations and technology. This will create a simplerorganization structure that is focused on maximizing good customerexperience and "right-first-time" operationaland systems delivery.

In addition, as part of a cost reductionprogram, we plan to standardize websites and systems technologiesthroughout the Group, dispose of nine retail outlets followingsuccessful online conversion across Europe and the United Kingdom, andremove duplicate functions and delayering management following ourreorganized business structure. We plan to reduce staffing requirementsas we continue to automate and standardize our systems, which willinvolve some headcount reduction.

Liquidity

At December31, 2003 ebookers had cash of £49.6 million (December 31, 2002:£18.2 million). Cash varies seasonally through the year; however,growing volumes of business, coupled with the fact that we receive cashfrom our customers in advance of paying our suppliers, ensure that theunderlying trend is for our cash to grow with the business. What ismore important, from a liquidity perspective, is our financialregulation. This requires us to keep a certain level of net currentassets, which we monitor closely. We also need to monitor ourperformance against the terms of our banking covenants. The keydeterminants for our banking covenants, all measured under generallyaccepted accounting practices within the United Kingdom, are ourearnings before interest, tax and depreciation and amortization, andexcluding stock compensation costs, adjusted for capital expenditureand long term financing. See "Item 5.B Liquidity andCapital Resources — Group Financing".

Recentdevelopments

Acquisition of Travelbag HoldingsLimited

On February 7, 2003, the Group completed theacquisition of the entire share capital of Travelbag for grossconsideration of £52.9  million, including acquisitioncosts of £0.3 million. The acquisition of Travelbag was in linewith our acquisition strategy — to make large-scale acquisitionsof mainly offline travel companies — as first set out by ourDirectors in mid-2002.

The consideration consisted of cash of£37.8 million, deferred cash consideration of £3.0 millionand the issuance of 3,537,134 ordinary shares with an aggregate marketvalue of £12.3 million. The value of the ordinary shares issuedwas determined based on the average market price of the Group'sshares over the two day periods before and after the terms of theacquisition were agreed and announced on January 21, 2003. The deferredcash consideration was paid 12 months after the acquisition completiondate and is classified as a current liability at December 31, 2003. The£3.0 million of deferred consideration was discounted to£2.8 million at the acquisition date. At December 31, 2003, thisdeferred consideration amounted to £3.0 million, with theaccretion of the discount of £0.2 million to December 31, 2003recorded as interest expense.

Contingent consideration of£2.0 million may become payable in connection with thisacquisition. This consideration is contingent on ebookers being able torealize the tax benefits associated with certain bonus payments toTravelbag executives prior to the acquisition. If this contingencyoccurs, the amount paid will be recorded as an additional cost ofacquisition and will result in additional assets being recognized.

The acquisition was funded in part by a loan of £15.0 millionfrom Barclays Bank ("Barclays") and in partby the placing of additional shares of the Group, which raised£30.5 million before issuance costs. The consolidated results ofoperations of Travelbag from February 7, 2003 are included inebookers' results for the year ended December 31,2003.

The Travelbag acquisition hashad a material impact on our financial results for 2003, as highlightedin the following discussion of our operating results.

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Investment in Tecnovate BPOfacility

During 2003, ebookers' Indian BusinessProcess Outsourcing subsidiary, Tecnovate eSolutions Private Limited("Tecnovate"), which provides back officeservices and administration to the ebookers group, began makingpreparations for its transformation into a group revenue-generatorthrough offering third party services. To service these clients as wellas additional workload from ebookers, Tecnovate has expanded itspremises with the potential to increase staff from its current level of750 to over 2,000. Negotiations continue with a number of parties.

On September 30, 2003, Kipotechniki BVBA("Kipotechniki") agreed to invest inTecnovate. Under the terms of the agreement, Kipotechniki agreed toinvest $10,000,000 by acquiring 353,010 shares in Tecnovate at $28.32per share, representing 6.25% of the enlarged share capital.Theconsideration was to be paid in two installments of $5.0 million. Thefirst installment was payable immediately and has been received. Thesecond installment was payable by December 31, 2003, but has not beenreceived as of the date of this document. We are in discussions withKipotechniki regarding the terms of this second installment. Currently,Kipotechniki owns 3.125% of the enlarged share capital.

The September 30, 2003 agreement also specified that if a change ofcontrol of ebookers were to occur, ebookers and Kipotechniki would havethe right, in their absolute discretion, to require the sale back toebookers: (1) within the period from October 1, 2003 to June 30, 2004,the subscription shares acquired at the date of change of control, at aprice of 125 percent of the original subscription price; (2) from July1, 2004, the subscription shares, at an amount equal to their fairvalue. At this time ebookers believes that the possibility of a changein control is remote and that therefore the fair value of this optionis immaterial.

Sale of Travelbag's AdventuresDivision

On March 10, 2004, Travelbag Limited, a100% owned subsidiary of ebookers plc, signed a contract for thesale of the "Adventures" division of thecompany for £3.1 million. Adventures had gross sales of£5.4 million and revenues of £1.6 million during fiscal2003.

Euro considerations

The introduction ofthe euro has not resulted in any significant alteration of the way thatwe operate our online business or administrative functions. We haveadapted our business practices to invoice some customers in euro and topay some suppliers in euro. However, as these adaptations have notresulted in any significant expense, we do not expect the cost of anyfurther changes to our accounting systems to be material.

Inflation

Inflation has not had a significant influence onour results of operations and financial condition during the threeyears ended December 31, 2003.

5.A. Operating Results

Fiscal year 2003 compared to fiscal year 2002

**Gross sales and revenue**

Gross sales is ameasure that we use to evaluate operating performance by looking at thetotal transaction value of all our services. It includes the totalamount paid by customers for the services booked by us, as opposed tototal revenue, which is calculated as the margin we earn on productsand services. Gross sales is a useful measure, widely used throughoutthe travel industry by companies and financial analysts as a way oftracking company size. Additionally, many travel suppliers giveincentives based on gross sales performance.

Gross salesincreased to £520.4 million in 2003 from £273.8 million in2002; an increase of 90%. Of this growth, £45 million wasorganic (non-acquisition) and the remainder was due to the inclusion ofTravelbag's results, from February 7, 2003.

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Total revenue increased to £66.5million in 2003 from £32.6 million in 2002; an increase of104%. Of this increase of £33.9 million, £5.2million was organic growth and the remainder was due to the inclusionof Travelbag's results from February 7, 2003. The organic growthin revenue was largely due to growth in sales volumes but was also inpart due to higher margins made on bookings. The following tableprovides an analysis of ourrevenue:

|                                    |  |             |       |                |  |                  |      |                 |  |                  |     |           |  |        |      |        |  |        |     |         |  |        |     |         |  |  |
|------------------------------------|--|-------------|-------|----------------|--|------------------|------|-----------------|--|------------------|-----|-----------|--|--------|------|--------|--|--------|-----|---------|--|--------|-----|---------|--|--|
|                               |  | 2003        |       | 2003           |  | %of totalrevenue |      | 2002            |  | % oftotalrevenue |     | %increase |
|                               |  | US$ million |       | £million |  |             |      | £ million |  |
| Merchantfare airline ticketrevenue |  |        | 41.3  |           |  |             | 23.1 |            |  |             | 35  | %    |  |   | 11.3 |   |  |   | 35  | %  |  |   | 105 | %  |
| Othertravel productrevenue         |  |        | 75.4  |           |  |             | 42.3 |            |  |             | 63  | %    |  |   | 20.9 |   |  |   | 64  | %  |  |   | 103 | %  |
| Totaltravelrevenue                 |  |        | 116.7 |           |  |             | 65.4 |            |  |             | 98  | %    |  |   | 32.2 |   |  |   | 99  | %  |  |   | 104 | %  |
| Advertisingand other salesrevenue  |  |        | 1.9   |           |  |             | 1.1  |            |  |             | 2   | %    |  |   | 0.4  |   |  |   | 1   | %  |  |   | 135 | %  |
| **Totalrevenue**                   |  |        | 118.6 |           |  |             | 66.5 |            |  |             | 100 | %    |  |   | 32.6 |   |  |   | 100 | %  |  |   | 104 | %  |
|                                    |

Organicgrowth came mostly from online sales growth and improved salesconversion rates, from calls to bookings, at our call centers. Webelieve that our online sales growth was aided by improving websitefunctionality and our customer service as well as increased Internetusage by European consumers. Many of our call center sales areweb-enabled, that is from customers who have visited our websitesbeforehand. We believe that these calls are easier to convert intosales because the customers have often researched our products beforethey call. This organic growth was achieved despite the significantimpact the Iraq War and Severe Acute Respiratory Syndrome("SARS") had on both the travel industry andour results for 2003. In addition, we believe that the summer heatwaves across Europe in 2003 caused many potential customers to stay athome or to take short-haul trips instead of long-haul trips.

Ourmargin (revenue as a percentage of gross sales) increased to12.8% in 2003, from 11.9% in 2002. This improved marginwas due to the impact of Travelbag's higher margin product mix(14.1% compared to organic margins of 11.9%).

Merchant fare airline ticket revenue

Merchant fare airlinetickets are discount airline tickets made available to us by airlines,that we sell to customers at a margin that we recognize as revenue. Ofthe £11.8 million increase in revenues, £10.4 million wasdue to the revenues from our acquisition, Travelbag, and £1.4million was organic, non-acquisition growth due mainly to online salesgrowth and improved sales conversion rates at our call centers.

Other travel product revenue

Other travel product revenueincludes commission from airlines for sales of tickets at publishedfares, other non-airfare travel products (packages, hotel rooms, carhire, excursions and travel insurance), credit card sales fees andother services revenue and incentive income from suppliers. Of the£21.5 million increase, £17.8 million was due to theacquisition of Travelbag, and £3.7 million was organic,non-acquisition growth, due mainly to increased sales of non-airfaretravel products, resulting from our strategy to use improvedtechnology, for example, provision on on-line information and on-linebooking for hotels; negotiation of improved product margins from oursuppliers; and sales techniques aimed at selling more non-airfaretravel products.

Revenue on the sale of published fare airlinetickets decreased to £4.5 million in 2003, from £4.7million in 2002, a decrease of 13%. This decrease reflects thelowering of published fare commissions from airlines. Travelbag sellsvery few published fare airline tickets, focusing instead on merchantfare airline tickets.

Revenue from the sale of packages, hotelaccommodations, car hire, excursions and travel insurance showed asignificant increase to £25.1 million in 2003, from £9.1million in 2002, an increase of 175% or £16 million. Ofthis increase, £12.8 million was due to the acquisition ofTravelbag and £3.2 million was a result of organic increasedriven by our implementation of our strategy of promoting this type ofproduct.

43

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Credit card sales fees and incentiveincome from suppliers increased 82% to £12.8 million in2003, from £7 million in 2002. £6.3 million of the increaserelates to incentive revenue, of which £2.5 million was organicgrowth and £3.8 million was due to the acquisition ofTravelbag.

Advertising and other sales revenue

Ouradvertising and other sales revenue increased to £1.1 million in2003 from £0.4 million in 2002, an increase of 135% inabsolute terms.

Revenue by operating segment

Thefollowing table presents an analysis of our revenue by operatingsegment:

|                                       |  |              |       |                |  |                |      |           |  |        |         |        |  |        |         |         |  |  |
|---------------------------------------|--|--------------|-------|----------------|--|----------------|------|-----------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                  |  | 2003         |       | 2003           |  | 2002           |      | %increase |
|                                  |  | US $ million |       | £million |  | £million |      |      |
| UK -Flightbookers                     |  |         | 39.8  |           |  |           | 22.4 |      |  |   | 21.8    |   |  |   | 2       | %  |
| UK- Travelbag Group (Fromacquisition) |  |         | 51.0  |           |  |           | 28.5 |      |  |   | — |   |  |   | — |    |
| UK(1)                                 |  |         | 90.7  |           |  |           | 50.9 |      |  |   | 21.8    |   |  |   | 133     | %  |
| OtherEuropean                         |  |         | 26.3  |           |  |           | 14.6 |      |  |   | 10.5    |   |  |   | 41      | %  |
| HeadOffice andSupport                 |  |         | 1.7   |           |  |           | 1.0  |      |  |   | 0.3     |   |  |   | 179     | %  |
| Totalrevenue                          |  |         | 118.7 |           |  |           | 66.5 |      |  |   | 32.6    |   |  |   | 104     | %  |
|                                       |

|  |
|--|
|  |  |
|  |

| (1) | In 2004 we intend to complete the integration ofFlightbookers and Travelbag into a single UK operating segment,operating under a unified management and reporting structure. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Of the total revenue of £66.5 million, 76% or£50.9 million related to the UK business. The UK business grew by133% from 2002 to 2003 due to Travelbag adding £28.5million of revenue in the eleven months since acquisition andFlightbookers growing by 2% to £22.3 million in 2003.Given our focus on integrating Travelbag in the UK and converting it toonline sales, organic growth was concentrated in non-UK subsidiaries.These delivered a strong combined performance across the year withoverall revenue in 2003 of £14.6 million; an increase of40% from 2002. Head office and support revenue relates to therecognition of signing on fees from GDS supplier contracts.

Operating expenses

The following table shows a breakdown ofour operatingexpenses:

|                                  |  |            |  |                 |  |                |  |  |  |  |  |  |  |  |
|----------------------------------|--|------------|--|-----------------|--|----------------|--|--|--|--|--|--|--|--|
|                             |  | 2003       |  | 2003            |  | 2002           |
|                             |  | US$million |  | £ million |  | £million |
| Marketing andsales               |  | 62.3       |  | 34.9            |  | 16.5           |
| Generalandadministrative         |  | 57.5       |  | 32.2            |  | 28.1           |
| Depreciation                     |  | 7.7        |  | 4.3             |  | 4.5            |
| Producttechnology anddevelopment |  | 8.5        |  | 4.8             |  | 3.1            |
| **TotalOperatingexpenses**       |  | 136.0      |  | 76.2            |  | 52.2           |
|                                  |

Marketingand sales

Our marketing and sales expenses increased to£34.9 million in 2003 (£13.5 million on marketing, and£21.4 million on sales), from £16.5 million in 2002(£6.1 million on marketing and £10.4 million on sales) anincrease of £18.4 million or 111%. The acquisition ofTravelbag accounted for £15.9 million of this increase.

Marketing expenses comprise advertising and promotional costs. As apercentage of total revenue, our marketing expenses were 20% for2003 compared to 19% in 2002. During 2003 we made extensive useof affiliates. For example we worked with Yahoo in the UK, 80dagar inNorway and vertaa.fi in Finland. We also developed relationships withsearch engines such as Google and 

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Overture. Across all our markets, wecontinued to employ a diverse range of tools from newspaper, radio andoutdoor advertising to public relations, partnerships, travel fairs andpromotions. In Sweden we ran a competition on the country'sbiggest commercial TV channel, and ran a promotion with a leading brandof breakfast cereal. In France, we ran poster campaigns on buses and inthe Metro.

During 2003 we rolled out E.piphany CRM technologieswhich are designed to increase the effectiveness of our marketingthrough better targeting, improved high-margin cross sell, bettercustomer service and improved retention rates. We are supporting thistechnology with improved customer access by developing a singlecustomer view across all our channels — web, retail, email andtelephone. In the UK, we have integrated our UK marketing departmentfollowing the acquisition of Travelbag in February 2003. We now run afunction-based department to ensure the sharing of best practices andto deliver cost-effective and efficient marketing expertise.

Sales expenses comprise direct costs of sales and related overheadcosts. As a percentage of revenue, sales expenses remained at32% in 2003 as in 2002. Sales expenses were affected by theacquisition of Travelbag, which had a sales expenses ratio of35% for the period, masking a reduction in sales expenses forour existing businesses. Travelbag currently has higher sales expensesthan ebookers because of its bigger "bricks andmortar" retail presence, and the fact that ebookers hasthe advantage of a low-cost Indian BPO facility. As Travelbagincreasingly goes online, and as its back office processes aretransferred to our Indian BPO facility, this ratio is expected toimprove.

General and administrative

The increase of£4.2 million in 2003 compared to 2002 primarily relates to anincrease of £8.8 million due to the cost base of Travelbag and£3.6 million of non-recurring costs partly offset by a decreaseof £8.3  million due to lower stock compensationexpense.

The non-recurring costs of £3.6 million includeredundancy costs following the acquisition of Travelbag (£0.3million), other staff restructuring costs (£0.2 million),property integration and disposal costs following the integration ofTravelbag (£1.1 million), certain professional service fees(£0.3 million), goodwill impairment as a result of theliquidation of a German subsidiary (£0.2 million), informationtechnology integration costs (£0.1  million) and othergeneral restructuring and integration costs (£0.1 million).

The increase in general and administrative expenses discussed abovewas partly offset by a £8.3 million decrease in stockcompensation expense to £5.4 million in 2003 from £13.7million in 2002.

This decrease was primarily due to thefluctuation in our share price during 2003 and 2002. The Group'sChief Executive Officer holds options that entitle him to acquire5% of the ordinary share capital of the Group immediatelypreceding the date of the exercise. Accordingly, the issue of newshares by the Group increase the number of shares exercisable underthese options, which gives rise to increased stock compensation expenseto the extent the option exercise price is below market value of theissued shares. These options are accounted for under variable planaccounting. Our share price increased from £0.95 at December 31,2001 to £4.03 at December 31, 2002, giving rise to a significantcharge in fiscal 2002. However, during fiscal 2003, our share pricedecreased marginally to £3.97 at December 31, 2003, resulting ina reduction of expense.

This decrease due to share price waspartly offset by an increase in options under the variable plan thatresulted from the 12,377,713 shares that were issued in 2003 asconsideration for the acquisition of Travelbag and also by the 936,864shares that were issued in 2003 as a result of the former ManagingDirector exercising some of his variable stock options.

Generaland administrative expenses include £0.9 million of bonuses and£0.1 million of national insurance thereon, accrued in respect ofone of the executive directors, which was waived after the year-end.The waiver of this bonus will be reflected as a reversal of the expensein the results to be reported for the quarter ending March 31, 2004.See "Item 6.B Compensation".

Depreciation

Our depreciation expense decreased by5% in 2003 compared to 2002. The decrease was due to a number ofassets becoming fully depreciated during the year. These includewebsite development 

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costs, software and computer andcommunications equipment. The decrease was partially offset by£1.4 million of depreciation expense related to the assetsacquired with Travelbag.

Product technology anddevelopment

The main elements of our product technology anddevelopment expenses are technology salaries, consultant costs, andcomputer and communications expenses and other non-capitalizedtechnology and development costs.

Our product technology anddevelopment expenses increased by £1.7 million in 2003 comparedto 2002, which includes £1.3 million from Travelbag. Theremainder of the increase was due mainly to increased numbers of ITstaff and increased computer and communications maintenance costs.Product technology and development expenses were 7% of totalrevenue for 2003 compared to 10% for 2002. This improvement wasdue to economies of scale as we made significant investments andadvances with systems automation and group-wide standardization of ITtechnologies. For example, we installed a European MPLS (Multi ProtocolLabel Switching) based system and a group-wide Avaya telecoms system.This gives us the capability to route incoming calls from anydestination to any available agent throughout the group. Currently weuse this system to route selected calls to customer service hubs inDelhi and Ireland.

During 2003, the Group capitalized £1.0million of website development costs, compared to £0.3 million in2002. These costs are amortized over two years from the date ofcapitalization.

Operating Loss

As a result of all theforegoing factors, operating loss decreased to £9.8 million in2003, down 50% from £19.7  million in 2002.

**Other income / (expenses)**

Our other income /(expenses) increased to a net income of £3 million in 2003 from£0.9 million in 2002. The largest component of this increaserelated to the £2.8 million profit earned on the sale of sharesof our subsidiary BPO facility in India, Tecnovate to Kipotechniki.

Kipotechniki agreed to invest $10.0 million by acquiring new sharesin Tecnovate representing 6.25% of the enlarged share capital.The consideration was to be paid in two installments of $5.0 million.The first installment was payable immediately and has been received.The second installment was payable by December 31, 2003, but has notbeen received as of the date of this document. We are in discussionswith Kipotechniki regarding the terms of this second installment.

The £2.8 million profit recorded in 2003 relates only to the$5.0 million received by December 31, 2003.

Other items recordedin other income / expenses include interest expense on the £15.0million loan facility with Barclays during 2003, which was used topartially finance the Travelbag acquisition, and other expensesresulting from the acquisition of Travelbag, including amortization ofthe debt issuance costs, and accretion of the deferred considerationdiscount, which together amounted to £0.4  million. Therewas also a higher foreign exchange loss, due to movements in exchangerates, primarily the euro and the dollar. This was partly offset by anincrease in interest income from our higher average cash balance.

Net loss

Net loss decreased to £6.9 million in 2003,down 64% from £19.0 million in 2002.

Fiscalyear 2002 compared to fiscal year 2001

Certainreclassifications have been made to the items included in thediscussion of prior year operating review to conform to the 2003presentation. These reclassifications did not impact net loss for theyears ended December 31, 2002 and 2001.

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**Gross sales**

Gross salesincreased to £273.8 million in 2002 from £178.9 million in2001, an increase of 53%, demonstrating ebookers increasedfootprint in the travel market.

**Revenue**

|                                    |  |                |      |                  |  |                 |     |                  |  |           |      |        |  |        |     |         |  |        |     |         |  |  |
|------------------------------------|--|----------------|------|------------------|--|-----------------|-----|------------------|--|-----------|------|--------|--|--------|-----|---------|--|--------|-----|---------|--|--|
|                               |  | 2002           |      | %of totalrevenue |  | 2001            |     | % oftotalrevenue |  | %increase |
|                               |  | £million |      |             |  | £ million |     |
| Merchantfare airline ticketrevenue |  |           | 11.3 |             |  |            | 35  | %           |  |      | 8.8  |   |  |   | 45  | %  |  |   | 28  | %  |
| Othertravel productrevenue         |  |           | 20.9 |             |  |            | 63  | %           |  |      | 10.7 |   |  |   | 54  | %  |  |   | 92  | %  |
| Totaltravelrevenue                 |  |           | 32.2 |             |  |            | 99  | %           |  |      | 19.5 |   |  |   | 99  | %  |  |   | 65  | %  |
| Advertisingand other salesrevenue  |  |           | 0.4  |             |  |            | 1   | %           |  |      | 0.2  |   |  |   | 1   | %  |  |   | 100 | %  |
| **Totalrevenue**                   |  |           | 32.6 |             |  |            | 100 | %           |  |      | 19.7 |   |  |   | 163 | %  |  |   | 65  | %  |
|                                    |

Totalrevenue increased to £32.6 million in 2002 from £19.7million in 2001, representing a 65% increase. This growth wasdriven mainly by increased Internet and Internet-enabled bookings andbetter call center conversion rates (the amount of calls that areconverted into sales). Our margin increased to 11.9% in 2002from 11.0% in 2001. There was a slight decrease in flightmargins during the period due to competitive pressure as airlinesreduced their prices, but this was offset by growth and improvedmargins from our non-air products including hotels, car hire and travelinsurance. Revenue from our U.K. operations comprised 67% of ourtotal revenue in 2002 compared to 61% in 2001.

Merchantfare airline ticket revenue

Revenue from merchant fare airlinetickets increased to £11.3 million in 2002 from £8.8million in 2001, an increase of 28%, driven mainly by thecontinued consumer shift towards booking travel using the Internet, andbetter call center sales conversion rates. In 2002, revenue frommerchant fare airline tickets represented approximately 35% ofour travel revenue and our total revenue, respectively. In 2001,revenue from merchant fare airline tickets represented approximately45% of both our travel revenue and of our total revenue.

Other travel product revenue

Revenue from other travelproduct revenue increased to £20.9 million in 2002 from£10.7 million in 2001, an increase of 94%. Thissignificant increase was due both to greater published airfare sales asa result of more competitive pricing by airlines, and the successfulsale of more non-air products in accordance with our businessstrategy.

Many traditional airlines lowered their prices onshort-haul routes to compete with low cost, no frills airlines such asRyanair and easyJet. This improved the price attractiveness of many ofthese traditional airline published fares on our website.

Revenue on the sale of published fare airline tickets and revenuefrom hotel accommodation, car hire and travel insurance increased to£9.5 million in 2002 from £4.6 million in 2001. Revenue onthe sale of published fares increased to £4.7 million in 2002, upby 108%, from £2.2 million in 2001. Revenue from hotelaccommodation increased to £3.1 million in 2002 from £1.2million in 2001 an increase of 153%.

The remainingbalance of £11.4 million (2001: £6.1 million) includedpackage holidays, incentive income, segment income and other travelrevenue, and credit card fees.

In 2002, revenue from othertravel products represented 63% of our total revenue compared to54% of total revenue in 2001.

**Operatingexpenses**

Marketing and sales

We spent£16.5 million in 2002 on marketing and sales (£6.1 millionon marketing and £10.4 million on sales) in 2002, compared to£19.3 million in 2001 (£10.4 million on marketing and£8.9 

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million on sales). As a percentage of totalrevenue, marketing costs decreased from 52% in 2001 to18% in 2002 and sales costs decreased from 45% in 2001 to32% in 2002. The relative decrease in sales costs was a resultof growth of Internet sales relative to offline sales and the continuedtransfer of functions to our BPO facility in which our average salarylevel was well below the European average. Also, in 2002 we decreasedour marketing costs, as increasing consumer Internet usage allowed usto maintain strong sales growth despite decreased marketing.Additionally our increasing experience in online marketing enabled usto use our marketing budget more efficiently.

General andadministrative

General and administrative expenses increased to£28.1 million in 2002 from £14.8 million in 2001. Thisincluded a decrease in average salary costs within the Group due to theimpact of shifting a number of our support functions, such as customerservice, finance and ticketing to our BPO facility in which our averagesalary was well below that of our European staff. Key items ofadministrative expense included salary costs for non-sales andmarketing and technology staff, building costs, telecommunicationscosts and professional fees. This decrease was more than outweighed bya significant stock option charge of £13.7 million in 2002,driven by the significant increase in our share price from £0.97at December 31, 2001 to £4.03 at December 31, 2002, as well asthe issuance of new stock options during the year.

Depreciationand amortization

Our depreciation and amortization expensedecreased from £8.6 million in 2001 to £4.5 million in 2002due to SFAS 142, which the Company adopted on January 1, 2002, whichrequired that companies cease amortization of goodwill, but assess thecarrying value of goodwill for impairment each year. A transitional andannual impairment review for 2002 was conducted by the Group and it wasdetermined that no additional impairment provision was necessary.

Product technology and development

We spent £3.1million, or 10% of total revenues on product technology anddevelopment in 2002 versus £2.6 million, or 13%, of totalrevenues in 2001. The absolute increase reflected greater focus by theGroup on developing automation and website technology. The main elementof development expenses was staff and consultant salary costs, ITcommunication and hosting expenses and IT maintenance costs.

Operating Loss

As a result of all the foregoing factors,operating loss decreased to £19.7 million in 2002, from£25.5 million in 2001, a 23% reduction.

**Otherincome / (expenses)**

Other income decreased to £1.0million in 2002 from £1.1 million in 2001, primarily due toreduced interest income. This was due to a lower average cash balancewithin the Group during 2002 compared with 2001. Other expensedecreased to £0.1 million in 2002 from £0.5 million in2001. This was primarily a result of unfavorable foreign currencymovements for the Group in 2001 compared to favorable foreign currencymovements in 2002. Foreign currency exchange gains of £0.1million were made in 2002 compared to a loss of £0.3 million in2001, largely due to the strength of the pound sterling against theEuro and the US dollar.

Net Loss

As a result of all theforegoing factors, net loss decreased to £19.0 million in 2002,from £25 million in 2001, a 24% reduction.

5.B.Liquidity and capital resources

At December 31, 2003, we had£49.6 million in cash and cash equivalents compared to£18.2 million as of December 31, 2002, an increase of £31.4million mainly from net cash acquired with the acquisition ofTravelbag.

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Cash flows from operatingactivities

Our operating activities resulted in net cashoutflows of £10.2 million for 2003, compared to £4 millionnet cash inflows for 2002. The decrease in our net cash provided byoperating activities in 2003 when compared to 2002 was primarily due toacquiring Travelbag at close to its seasonal cash peak as compared tothe December 31, 2003 position. This decreased cash flows sinceTravelbag had largely received the cash from its sales cycle for theseason, prior to acquisition, whereas the majority of its cash paymentsto meet its obligations for this same season fell after the date ofacquisition. In 2002, an increase in accounts payable of £5.3million was the principal provider of cash as well as an increase inaccrued reservations liability of £0.8 million.

Cashflows from investing activities

Our investing activitiesresulted in net cash outflows of £6.8 million for 2003, comparedto £3.8 million for 2002. Uses of cash during 2003 were theacquisition of Travelbag at a cost of £37.8 million (less netcash acquired with the acquisition of £34.7 million) and thepurchase of fixed assets of £8.6 million, which was offset by adecrease in restricted cash of £2.6 million and proceeds from thesale of shares in Tecnovate of £3.0 million. We used cash during2002 for the purchase of fixed assets of £2.8 million and anincrease in restricted cash of £1.0 million. Restricted cash asat December 31, 2003 and December 31, 2002 related to cash collateralheld by the providers of our bank guarantee facilities.

Cash flows from financing activities

Our financingactivities resulted in net cash inflows of £48.1 million for 2003compared to net cash outflows of £0.1  million for 2002.During 2003, proceeds from issuance of ordinary shares were £31.7million and proceeds from loans received amounted to £16.0million. The loan proceeds were offset by £0.6 million of debtissuance costs. There was also a cash inflow of £0.8 millionrelating to the proceeds from sale and leaseback transactions and acash outflow of £0.7 million for capital repayments of financeleases. This was offset by outflows from decreases in a bank overdraftof £0.4 million. During 2002, the net outflow resulted fromcapital repayments of capital leases of £1.0 million partlyoffset by increases in a bank overdraft of £0.4 million.

Capital Expenditure

During 2003 the group furtherinvested in its information technology and in call center and supportservice property with £8.6 million in expenditures. Of thisamount, the Group spent £8.2 million on software and computer andcommunications equipment. The two biggest projects were a new phone andcommunications system at a cost of £2.3 million and a CustomerResource Management system at a cost of £1.3 million. The Groupalso spent £1.0 million on capitalized web development costs toimprove the services available on the websites. The major propertyinvestments were in New Delhi, India, where a new support center wasleased and fitted out, and an office in London, which was refurbishedto provide facilities for a call center and UK head officeactivities.

Capital commitments

At the end ofthe year, we had capital commitments of £0.5 million. (2002:£nil).

In addition to these existing capital commitmentswe anticipate that over the course of 2004 we will spend approximately£6 million on capital items, primarily again in the areas ofinformation technology and call centers.

NetFunds

Net funds comprise net cash less capital leases. Netcash itself comprises cash and cash equivalents, less bank overdraftsand bank loans.

We assess our net funds regularly. The followingtable presents our net funds position at the end of the last threefiscal years:

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|                              |  |             |         |                |  |                 |         |                |  |        |         |         |  |        |         |         |  |  |
|------------------------------|--|-------------|---------|----------------|--|-----------------|---------|----------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                         |  | Dec31, 2003 |         | Dec 31, 2003   |  | Dec 31, 2002    |         | Dec 31,2001    |
|                         |  | US$ million |         | £million |  | £ million |         | £million |
| Cash and cash equivalents(1) |  |        | 88.6    |           |  |            | 49.6    |           |  |   | 18.2    |    |  |   | 17.7    |    |
| Overdrafts                   |  |        | — |           |  |            | — |           |  |   | (0.4    | )  |  |   | — |    |
| Loans                        |  |        | (28.5   | )         |  |            | (16.0   | )         |  |   | — |    |  |   | — |    |
| Capitalleases                |  |        | (4.9    | )         |  |            | (2.8    | )         |  |   | (0.2    | )  |  |   | (1.2    | )  |
| **Total**                    |  |        | 55.0    |           |  |            | 30.8    |           |  |   | 17.6    |    |  |   | 16.5    |    |
|                              |

|  |
|--|
|  |  |
|  |

(1)Excluding restricted cash of £0.8 million in 2003 (2002:£3.5 million, 2001: £2.5 million).

ITFinancing

In September 2003, we entered into a leaseagreement to finance the purchase of computer equipment. Additionally,we entered into five information technology financings in December2003. The first was for the creation of a £1.5 million IT rentalfacility into which was initially placed some hardware. The second wasfor an IT project financing for a new phone, voice and datacommunication system and the remaining three were part projectfinancings for our new customer relationship management capability. Thenet effect of these was to increase our cash position, and thecorresponding liability created by the financing, by £3.3 millionrelative to what it would have been.

Groupfinancing

On January 21, 2003, we entered into afacilities agreement with Barclays Bank plc, establishing a £15.0million term loan, a £10.0 million revolving credit facility anda £10.0 million guarantee facility, that was reduced to£7.5  million after three months. On September 26, 2003,the guarantee facility was increased to £10.8  million andthe revolving credit facility was reduced to £6.8 million. As ofDecember 31, 2003, the £15.0 million term loan was outstanding.The term loan is repayable in equal biannual installments with thefirst due on July 31, 2004 and the last due on January 31, 2008.Interest on the term loan and any amounts outstanding under therevolving credit facility is currently payable at a rate of LIBOR plus2.25% per year and on the guarantee facility at 2.25% peryear. This rate, with respect to each facility, reduces to 1.75%and 1.5% provided certain profit targets are met.

Thefacilities agreement requires compliance with certain financialcovenants based on ratios of our indebtedness to earnings beforeinterest and taxes ("EBIT"), our ratio ofoperating cash flow to debt service, our ratio of cash to tradecreditors, our net worth, our absolute EBIT and our absolute cash flow.The facilities agreement also requires compliance with certainoperating and other covenants which limit, among other things, theincurrence of additional indebtedness by us and our subsidiaries, salesof assets, mergers, distributions to shareholders, investments,acquisitions and grants of security interests. The facilities agreementgenerally prohibits the payment of dividends.

On August 18,2003, Barclays and we agreed to amend certain of the financialcovenants contained in the facilities agreement. Barclays agreed towaive compliance with certain financial covenants, and at that time, wealso agreed not to borrow under the revolving credit facility withoutBarclay's prior consent. On October 30, 2003, Barclays agreed towaive compliance with certain financial covenants and Barclays and weagreed to further amendments to the covenants.

In 2004 we haveentered into a new facility within the £32.5 million Facility for£5.5 million on substantially the same terms as the £15million Term Loan, which was drawn down in March 2004. This is beingused for working capital purposes.

5.C. Research anddevelopment, patents and licenses

We have not engaged in anysignificant research and development in any of the last three financialyears. We do not hold any patents, but we do hold a number of licensesfor the technology that we use.

Individually, these licenses arenot material to ebookers' business or financial position.

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5.D. Trend Information

Grosssales and revenue growth for first quarter of fiscal 2004 has beenstrong. Internet bookings are up 69% organically for January— March 18, compared to the period last year. They are up40% in the UK and 107% in the rest of Europe (12countries).

5.E. Off Balance Sheet Arrangements

ebookers plc has no off-balance sheet arrangements.

5.F.Tabular Disclosure Contractual Obligations

The Group hasvarious contractual obligations that are set out in the table below.The majority of the balance as at December 31, 2003 was made up of longterm debt and commitments under non-cancelable operating leasesprimarily for computer hardware but also rental of groupproperty.

Payments due by periodAs at December 31,2003

|                         |  |                |      |                 |  |                 |     |                |  |                 |         |        |  |        |         |        |  |        |         |        |  |  |
|-------------------------|--|----------------|------|-----------------|--|-----------------|-----|----------------|--|-----------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                    |  | Total          |      | Lessthan1 year  |  | 1 to 3 years    |     | 3 to 5years    |  | After 5years    |
|                    |  | £million |      | £ million |  | £ million |     | £million |  | £ million |
| Long termdebt           |  |           | 16.0 |            |  |            | 2.3 |           |  |            | 8.0     |   |  |   | 5.7     |   |  |   | — |   |
| Purchaseobligations     |  |           | 0.5  |            |  |            | 0.5 |           |  |            | — |   |  |   | — |   |  |   | — |   |
| Capitalleaseobligations |  |           | 2.8  |            |  |            | 0.7 |           |  |            | 2.0     |   |  |   | 0.1     |   |  |   | — |   |
| Operatingleases         |  |           | 9.1  |            |  |            | 1.9 |           |  |            | 2.5     |   |  |   | 2.2     |   |  |   | 2.5     |   |
| Total                   |  |           | 28.4 |            |  |            | 5.4 |           |  |            | 12.5    |   |  |   | 8.0     |   |  |   | 2.5     |   |
|                         |

The£16.0 million in long-term debt relates to the £15.0million Barclays Term Loan plus £1.0 million relating to ITfinancing loans. The purchase obligations are mainly in connection withIT projects and do not include other miscellaneous minor expenditures.The capital lease obligations are for the financing of IT equipment andsoftware. The operating leases are mainly for buildings being offices,call centers and shops.

Based on the Group's workingcapital projections, we believe that these obligations can be metthrough cash generation from our operations. We recognize that criticalto generating such cash is ensuring that our cost base reflects ourrevenue trends. We plan to advance this objective by, among otherthings, implementing the cost reduction program described earlier. See"Item 5 Operating and Financial Review and Prospects— Factors Affecting Results".

CriticalAccounting Policies

Our management's discussion andanalysis of ebookers' financial condition and results ofoperations are based upon ebookers' consolidated financialstatements, prepared in accordance with US GAAP. The preparation ofthese financial statements requires management to make estimates andjudgments that affect the reported amounts of assets, liabilities,revenues and expenses, and related disclosure of contingent assets andliabilities. On an ongoing basis, we evaluate estimates, includingthose related to intangible assets, income taxes, restructuring, andcontingencies and litigation. We base estimates on historicalexperience and on various other assumptions that are believed to bereasonable under the circumstances, the results of which form the basisfor making judgments about the carrying values of assets andliabilities that are not readily apparent from other sources. Actualresults may differ from these estimates under different assumptions orconditions.

Management believes the following criticalaccounting policies used in the preparation of ebookers'consolidated financial statements required significant judgments andestimates.

**Impairment Assessments of Goodwill and OtherIntangible Assets**

Goodwill represents the excess of costover the fair value of net assets acquired. As required by Statement ofFinancial Accounting Standards No. 142, "Goodwill andOther Intangible Assets", 

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management reassessed the recoverability ofgoodwill at December 31, 2003. Fair value was calculated based on adiscounted cash flow analysis and it was determined that goodwill wasnot impaired. The assumptions used by the Group in determining fairvalue included expectations regarding future operating performance,discount rates, terminal values and other factors that are subjectivein nature. Actual cash flows from operations could differ frommanagement's estimates due to changes in business conditions,operating performance and economic conditions. Should estimates differmaterially from actual results, the Group may be required to recordimpairment charges in the future.

Other intangible assetscomprise brands. These were recognized, as required by Statement ofFinancial Accounting Standards No. 141, 'BusinessCombinations", on the acquisition of the Travelbag Groupand relate entirely to the ''Travelbag' and'Bridge the World' brands. The initial recognition of thesebrands was based on the assessment of fair value, calculated using thenet royalties method.

Capitalized brands were tested forimpairment at December 31, 2003. Fair value was calculated based on therelief from royalties method and it was determined that the brands werenot impaired. The assumptions used by the Group in determining fairvalue included expectations regarding future operating performance androyalty rates, which are subjective in nature. Actual revenues fromoperations could differ from management's estimates due tochanges in business conditions, operating performance and economicconditions. Should estimates differ materially from actual results, theGroup may be required to record impairment charges in the future.

**Product technology and development costs**

ebookersrecords its Web Site development costs in line with the requirements ofEITF Issue No. 00-2: "Accounting for Web Site DevelopmentCosts" ("EITF 00-2"). EITF 00-2provides guidance on how an entity should account for costs incurred todevelop a website and addresses the treatment of certain costs incurredduring the different stages of website development. Under EITF 00-2,management is required to determine the stage in which websitedevelopment costs are incurred. Capitalization or expense of costs isdependent on management's assessment of the stage of development.Based on management's assessment, the Group has capitalized£1.0 million of website development costs in 2003 (2002:£0.3 million, 2001: £0.8 million). These capitalized costsare being amortized over two years.

New AccountingPronouncements

**Recently Issued But Not YetAdopted Accounting Pronouncements**

In December 2003, the FASBissued a revision to Interpretation No. 46, "Consolidationof Variable Interest Entities, an Interpretation of ARB No.51" ("FIN 46R"). FIN 46Rclarifies the application of ARB No. 51, "ConsolidatedFinancial Statements," to certain entities in which equityinvestors do not have the characteristics of a controlling financialinterest or do not have sufficient equity at risk for the entity tofinance its activities without additional subordinated financialsupport. FIN 46R requires the consolidation of these entities, known asvariable interest entities ("VIEs"), by theprimary beneficiary of the entity. The primary beneficiary is theentity, if any, that will absorb a majority of the entity'sexpected losses, receive a majority of the entity's expectedresidual returns, or both.

Among other changes, the revisions ofFIN 46R (a) clarified some requirements of the original FIN 46, whichhad been issued in January 2003, (b) eased some implementationproblems, and (c) added new scope exceptions. FIN 46R deferred theeffective date of the Interpretation for public companies, to the endof the first reporting period ending after March 15, 2004, except thatall public companies must at a minimum apply the provisions of theInterpretation to entities that were previously considered"special-purpose entities" under the FASBliterature prior to the issuance of FIN 46R by the end of the firstreporting period ending after December 15, 2003. We do not believe thatthe adoption of FIN 46R will have a material impact on our consolidatedresults of operations and financial position uponadoption.

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ITEM6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A    Directors and SeniorManagement

Directors

The Directors of ebookers plc and their ages, positions and term ofoffice as at March 19, 2004 are:

|                    |  |        |    |          |  |                                                 |  |        |      |        |  |  |  |  |
|--------------------|--|--------|----|----------|--|-------------------------------------------------|--|--------|------|--------|--|--|--|--|
| Name               |  | Age    |    | Position |  | Yearof re-election(1)                           |
| DineshDhamija(4)   |  |   | 53 |     |  | Chairmanand Chief Executive Officer             |  |   | 2002 |   |
| NigelAddison Smith |  |   | 38 |     |  | Executive Director and Chief FinancialOfficer   |  |   | 2002 |   |
| TaniDhamija(4)     |  |   | 52 |     |  | ExecutiveDirector                               |  |   | 2002 |   |
| PeterLiney (2)     |  |   | 44 |     |  | Executive Director and GroupCommercial Director |  |   | 2003 |   |
| SudhirChoudhrie    |  |   | 55 |     |  | Non-ExecutiveDirector                           |  |   | 2002 |   |
| JohnDonaldson      |  |   | 54 |     |  | Non-ExecutiveDirector                           |  |   | 2003 |   |
| DavidGill(3)       |  |   | 46 |     |  | Non-ExecutiveDirector                           |  |   | 2003 |   |
| JeffreySampler     |  |   | 43 |     |  | Non-ExecutiveDirector                           |  |   | 2003 |   |
|                    |

|  |
|--|
|  |  |
|  |

| (1) | Subjectto re-election by our shareholders at the annual general meeting heldin the final year of their term or early resignation. Mr. Dhamija andMr. Choudhrie will be proposed for reelection at the 2004 annualgeneral meeting. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | On March 18,2003, Mr. Liney was appointed to the board as an ExecutiveDirector. |
|-----|---------------------------------------------------------------------------------|

| (3) | On April 7, 2003, Mr.Gill was appointed to the board as a Non-Executive Director. |
|-----|-----------------------------------------------------------------------------------|

| (4) | Dinesh Dhamija and Tani Dhamija have aspousal relationship. |
|-----|-------------------------------------------------------------|

Senior Management

Inaddition to the Directors identified above, the executive officers ofebookers plc and their ages and positions are:

|              |  |        |    |          |  |                                      |  |  |  |  |
|--------------|--|--------|----|----------|--|--------------------------------------|--|--|--|--|
| Name         |  | Age    |    | Position |
| HelenO'Byrne |  |   | 38 |     |  | GeneralCounsel and Company Secretary |
| Paul Kennedy |  |   | 40 |     |  | Group Human Resources Director       |
| DhruvShringi |  |   | 31 |     |  | Group OperationsDirector             |
|              |

Each of our directors and executiveofficers may be contacted through us at 25 Farringdon Street, LondonEC4A 4AB, England.

Directors and Senior ManagementBiographies

**Dinesh Dhamija**has served as CEO of ebookerssince its inception in 1999 and has also been Chairman since theCompany's incorporation. Before founding ebookers, Mr Dhamija wasco-founder of Flightbookers plc, ebookers' original parentcompany, in 1983 which he jointly built into one of the UnitedKingdom's biggest travel agencies together with his spouse TaniDhamija. He has also run the Sales, Marketing and European airportsupport services of Royal Nepal Airlines as their Regional Director forEurope. He was employed by IBM before entering the travel industry in1979 and has an MA in Law from Cambridge University.

**NigelAddison Smith**has served as Chief Financial Officer of ebookerssince June 2002. Prior to ebookers, Mr Addison Smith was with FirstChoice Holidays plc where he was Finance Director of Air 2000 andViking Aviation, the company's charter airline division.Previously he was Group Financial Controller of First Choice. MrAddison Smith is a Chartered Accountant and before entering the travelindustry he was employed by KPMG in London for seven years. He has adegree in Economics and Politics from the University of Bristol.

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**Tani Dhamija**has served asExecutive Director of ebookers since October 2001. She was co-founderof Flightbookers plc. and is the spouse of Dinesh Dhamija. Mrs. Dhamijaoriginally had responsibility for ebookers' UK and Indianoperations. Since the acquisition of Travelbag in February 2003, shewas in charge of the Integration Committee overseeing the merger of thetwo groups in the United Kingdom, as well as acting as Interim GroupManaging Director. Tani Dhamija has decided to step down as ExecutiveDirector from March 31, 2004 but will continue to serve as aNon-Executive Director of the Company.

**Peter Liney**joinedebookers with the acquisition of Travelbag in February 2003. Hisinitial appointment was as UK Managing Director where he wasresponsible for all UK brands and operations. He was appointed to theExecutive Board on 18 March 2003. In March 2004, he was given theenhanced position of Group Commercial Director responsible for consumerhubs and supplier partnerships Groupwide. Prior to joining ebookers, MrLiney was Managing Director of Travelbag from 1999. Previously, heworked for British Airways from 1988 to 1999, holding various seniorpositions including Head of Leisure Sales for the United Kingdom andGeneral Manager, Asia-Pacific Alliances. Mr Liney has a degree inGeography and International Relations from the University of StAndrews.

**Sudhir Choudhrie**has served as Non-ExecutiveDirector of ebookers since October 1999. He is an industrialistspecialising in cross-border investments, including new technologies.He has been a Director and Board Member of Magnum International TradingCompany Limited since its founding in 1975. He holds a BA in Economicsfrom Delhi University.

**John Donaldson**has served as aNon-Executive Director of ebookers since July 2002. Mr Donaldson is awell-known figure in the European travel industry. He is a former ChiefExecutive of leading travel group Thomas Cook Holdings Limited,overseeing its sale in 2001 to C&N Touristic A.G., now renamedThomas Cook AG. Currently Mr Donaldson is Deputy Chairman of ThomasCook in the United Kingdom. Mr Donaldson held senior positions withThomas Cook Holdings Limited from 1988 to 2001. From 1997 to 1998 hewas Group Managing Director Worldwide before being promoted to ChiefExecutive from 1998 to 2001. Before joining Thomas Cook he worked forAmerican Express Europe from 1980 to 1988 and Aer Lingus from 1970 to1980.

**David Gill**has served as a Non-Executive Directorof ebookers plc since April 2003. In September 2003 he was appointedChief Executive Officer of Manchester United plc. He joined ManchesterUnited as Finance Director in 1997, was appointed Deputy ChiefExecutive in August 2000 and was promoted to Group Managing Director inJuly 2001. Previously Mr Gill was Finance Director of First ChoiceHolidays plc, the tour operator, and Proudfoot plc, the worldwidemanagement consultancy. David Gill qualified as a chartered accountantwith Price Waterhouse in 1981. In 1986 he joined the BOC Group in itscorporate finance department and then Avis Europe in 1990.

**Jeffrey Sampler**has served as Non-Executive Director ofebookers since December 1999. Since 1992, he has taught Strategy andInformation Business courses at the London Business School. He holds aPhD from the University of Pittsburgh, an MBA with Honours fromSouthern Methodist University and a BSc with Honours in ComputerScience from Texas A&M University.

**Helen O'Byrne**has served as General Counsel and Company Secretary of ebookers plcsince September 2001. Prior to joining ebookers, she was SeniorCorporate Counsel at BBA Group plc, responsible for the EuropeanAviation Division. She trained as a solicitor with Baker &McKenzie, joining their Corporate Department on qualification. Inaddition to her legal qualification, she holds a Maîtrise inEnglish Civilisation from the Université de Paris XII and aBachelor of Arts degree in French from Leeds University.

**PaulKennedy**has served as Group Human Resources Director of ebookersplc since March 2003. Previously he was HR Director EMEA for RosenbluthInternational the world's third largest Corporate TravelManagement Company. He has a wide breadth of Human Resources relatedknowledge and has expertise in post merger and acquisition integration,new start-ups and dealing with Pan European business models. Prior tothe travel industry he worked in Local government for 

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13 years within the Leisure and RecreationDepartment where he was responsible for managing the Leisure Servicecontract for the provision of local sport and recreationfacilities.

**Dhruv Shringi**joined ebookers in November2003 as Group Operations Director. He is an Insead MBA graduate,formerly with Andersen and, more recently, Ford's businessturnaround team.

6.B    Compensation

Directors' and Senior Management

The following tablepresents information regarding the compensation paid by ebookers plcfor the year ended December 31, 2003 to each of our current and formerdirectors (including the fees paid to Non-Executive Directors) andother executive officers.

|                                        |  |                            |           |         |  |          |         |          |  |        |         |        |  |        |         |        |  |        |           |        |  |  |
|----------------------------------------|--|----------------------------|-----------|---------|--|----------|---------|----------|--|--------|---------|--------|--|--------|---------|--------|--|--------|-----------|--------|--|--|
|                                   |  | Yearended December 31,2003 |
|                                   |  | Salary andfees             |           | Bonuses |  | Benefits |         | Pensions |  | Total  |
|                                   |  | (inpounds)                 |
| **CurrentDirectors**                   |  |
| DineshDhamija(1)(2)                    |  |                       | 300,000   |    |  |     | 45,467  |     |  |   | 38,083  |   |  |   | 21,000  |   |  |   | 404,550   |   |
| NigelAddison Smith(1)(2)               |  |                       | 120,000   |    |  |     | 20,667  |     |  |   | 258     |   |  |   | — |   |  |   | 140,925   |   |
| TaniDhamija(1)(3)                      |  |                       | 220,000   |    |  |     | 5,720   |     |  |   | — |   |  |   | — |   |  |   | 225,720   |   |
| PeterLiney(4)                          |  |                       | 152,816   |    |  |     | 39,237  |     |  |   | 7,131   |   |  |   | 20,764  |   |  |   | 219,948   |   |
| SudhirChoudhrie                        |  |                       | 20,000    |    |  |     | — |     |  |   | — |   |  |   | — |   |  |   | 20,000    |   |
| JohnDonaldson                          |  |                       | 20,000    |    |  |     | — |     |  |   | — |   |  |   | — |   |  |   | 20,000    |   |
| DavidGill                              |  |                       | 18,338    |    |  |     | — |     |  |   | — |   |  |   | — |   |  |   | 18,338    |   |
| JeffreySampler                         |  |                       | 20,000    |    |  |     | — |     |  |   | — |   |  |   | — |   |  |   | 20,000    |   |
|                                   |  |                       |      |    |  |     |    |     |  |   |    |   |  |   |    |   |  |
| **FormerDirectors**                    |  |                       |      |    |  |     |    |     |  |   |    |   |  |   |    |   |  |
| PeterCochrane (6)                      |  |                       | 5,000     |    |  |     | — |     |  |   | — |   |  |   | — |   |  |   | 5,000     |   |
| Dr.SanjivTalwar(1)(2)(5)               |  |                       | 8,836     |    |  |     | 19,966  |     |  |   | 36      |   |  |   | — |   |  |   | 28,838    |   |
|                                   |  |                       | 884,990   |    |  |     | 131,057 |     |  |   | 45,508  |   |  |   | 41,764  |   |  |   | 1,103,319 |   |
| Otherexecutive officers (in aggregate) |  |                       |      |    |  |     |    |     |  |   |    |   |  |   |    |   |  |   | 203,411   |   |
| **Total**                              |  |                       | 1,306,730 |    |
|                                        |

|  |
|--|
|  |  |
|  |

| (1) | Bonusamounts include (pounds) 8,800, (pounds) 4,000, (pounds) 5,720 and(pounds) 3,766 for Mr.  Dhamija, Mr. Addison Smith, Mrs. Dhamijaand Dr. Talwar, respectively, as performance bonuses for the fourthquarter of 2002 but paid in 2003. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Bonus amounts include (pounds) 36,667,(pounds) 16,667 and (pounds) 16,200 for Mr. Dhamija, Mr. Addison Smith,and Dr. Talwar, respectively, in respect of their significant effortsin the completion of the Travelbag acquisition. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Tani Dhamija has waived a one-time£880,000 award from the Company (an expense of approximately£1 million to the Company). The Remuneration Committee approvedthis award in recognition of her valuable contribution to therestructuring of the UK operations after the acquisition ofFlightbookers Limited and also her valuable contribution to us in theestablishment of our Tecnovate Indian BPO operations. This isillustrated by the investment made in October 2003 in Tecnovate, whichwould equate to a value for the whole operation of $160 million. In May2002, the Remuneration Committee recommended the grant of share optionsto Tani Dhamija of 1.5% of our share capital, as far as possibleon the same terms as those already granted to Dinesh Dhamija and SanjivTalwar. The shares represented by such a grant would have been wortharound £1 million at that time and would be worth nearly £4million as at March 19, 2004. This option was not granted at that timeas the share price rose very sharply and we decided to take externaladvice on this recommendation. Subsequently, on the basis of thisadvice, the |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | Remuneration Committee concluded that themost appropriate way to satisfy this historical recommendation was nolonger through the grant of options but through a one-off cash award tobe paid at a time which is appropriate having regard to our cash flowsand similar considerations. The award was not paid and has now beenwaived. Due to the delays arising from this matter, Tani Dhamija didnot receive a grant of options as awarded to other Executives under theExecutive Share Option Scheme during 2002. |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | On31 March 2004, Tani Dhamija will be resigning from her position as oneof our executive directors. She has decided to waive any contractualright to this award so that the company she helped establish mightcontinue to benefit from those funds. She will not receive anycompensation in exchange for waiving this right. |
|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr. Liney's bonus was awarded inrespect of a contractual commitment relating to the year ended March31, 2003. |
|-----|---------------------------------------------------------------------------------------------------------------|

| (5) | Dr Talwar receivedcompensation of (pounds) 68,765 for termination of office as of January20, 2003. His options over shares, as described below, remainexercisable. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Peter Cochraneresigned from the Board on June 26, 2003. His fees for 2002 werereceived during the year. No fees were paid in respect of 2003 but alloptions over shares, as detailed below, were allowed to remainexercisable See "— Ownership of ShareOptions". |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

In addition, we reimburse thereasonable expenses of our Non-Executive Directors.

Certain ofour Directors hold options over our ordinary shares, details of whichare contained elsewhere in this Annual Report.

The aggregateremuneration paid to or accrued on behalf of our directors and seniormanagers as a Group for the year ended December 31, 2003 was (pounds)1,306,730, in salaries, fees, commissions, bonuses and benefits inkind. This amount does not include expenses such as business travel,professional and business association dues and expenses reimbursed todirectors.

Bonus payments

The Remuneration Committeeestablishes the objectives that must be met for each financial year ifa cash bonus is to be paid. For a description of the RemunerationCommittee, see "Item 6.C Board Practices — BoardCommittees — Remuneration Committee". The maximumperformance related bonus that could be paid in 2003 to the ExecutiveDirectors was 40% of basic annual salary. The parameters fordetermining the amount of bonus to be awarded to the ExecutiveDirectors were based equally on achievement in three specific targetareas: sales, profitability and individual objectives. The RemunerationCommittee determined that no bonuses would be payable for 2003 inrelation to the sales and profitability objectives; awards were made toDirectors involved in the Travelbag acquisition for their significantefforts in completing the transaction. The policy for 2004 is thatbonuses would be based on three specific target areas: sales,profitability and individual objectives. Based on achievement of thosetargets, Directors have the opportunity of earning bonuses of up to100% salary.

Share options

The Company hasoperated a share option scheme since 1999, the ebookers.com ExecutiveShare Option Scheme (the "Scheme"). Grantsmade under the Scheme prior to April 1, 2003 were, given theCompany's original listing on Nasdaq, based on a model of vestingin four equal tranches on the first to fourth anniversaries of grant.The exercise price of such share options was the average market priceover the three days prior to the grant. Once vested, the share optionscan be exercised up to ten years from the date of grant. No performanceconditions were attached to these share options, granted to ExecutiveDirectors and other employees generally, as the Remuneration Committeeat that time considered share options a valuable means of attracting,motivating and retaining employees in a start-up environment where onlya relatively modest level of cash bonuses and other benefits wereprovided. Share options granted to Executive Directors under the Schemeto date have been provided on this basis and are set out in detail in"Item 6.E Share Ownership — Ownership of ShareOptions".

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Following the receipt of external advice,the Remuneration Committee agreed on March 18, 2003 that, with effectfrom April 1, 2003, options granted to Executive Directors would followthe model whereby the whole option would vest on the third anniversaryof grant with exercise available until the tenth anniversary. Inaddition, the Remuneration Committee agreed that performance criteriawould be attached to options awarded from that date. The RemunerationCommittee recognised that it is difficult to devise meaningful criteriafor ebookers as it is in the early stages of its business developmentand growing rapidly. This was one reason why performance conditions hadnot been applied before. As a first step, the Committee have decidedthat for such awards of share options to Directors, performance targetswould be measured over a three year period starting at the date ofgrant and 25% of the grant would vest based on an 8%absolute increase in Total Shareholder Return (TSR) over the RetailPrices Index (RPI), 100% would vest based on a 12%absolute increase in TSR over RPI with straight line vesting betweenthose levels. If the Executive Directors have not met the optionsperformance criteria at the third anniversary of grant the shareoptions would lapse. The Remuneration Committee considered the adoptionof underlying financial performance conditions such as Earnings perShare ("EPS") growth, but decided it wouldnot be appropriate at present. This policy will be reviewed in thelight of market practice and as the Company develops.

Pensionsand Benefits

Only two of our directors receive pensioncontribution from ebookers. Mr. Dhamija receives an amount equal to 7percent of his gross annual salary paid directly into a pension schemeof his choice. A payment of (pounds) 21,000 was made in 2003. Mr. Lineyreceived an amount of (pounds) 20,764 paid directly into a pensionscheme of his choice in 2003 in continuation of an arrangement from hisemployment at Travelbag. We made no other contributions to definedcontribution schemes for the benefit of any other director in the yearended December 31, 2003.

We also provide private medicalinsurance for our employees insured through Norwich Union or AXA/PPP.All due contributions had been paid as at December 31, 2003. OurExecutive Directors benefit from such insurance and the relevantamounts are included in the above table.

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6.C    Board Practices

Directors' Employment Agreements

The following tablesummarizes the principal features of the service agreements of theExecutive Directors of the Company and the terms of appointment of theNon-Executive Directors. The table does not include details of bonuses.These are determined by the remuneration committee and are related tocollective and individual performance. Details of bonuses paid for theyear ended December 31, 2003 are found elsewhere in this Annual Report.No Loans have advanced during the period to Directors or otherexecutiveofficers.

|                     |  |                  |  |                    |  |                          |  |  |  |  |  |  |  |  |
|---------------------|--|------------------|--|--------------------|--|--------------------------|--|--|--|--|--|--|--|--|
| Director(1)         |  | Dateof agreement |  | Annual salary/Fees |  | Period ofnotice          |
|                |  |             |  | (Pounds)           |  |                     |
| DineshDhamija(2)(3) |  | October2, 2002   |  | 300,000            |  | 12months                 |
| Nigel Addison Smith |  | May 31, 2002     |  | 120,000            |  | 6 months                 |
| TaniDhamija(4)      |  | January 16, 2003 |  | 220,000            |  | 6 months                 |
| PeterLiney(5)       |  | January 17, 2003 |  | 214,000            |  | 6 months                 |
| SudhirChoudhrie(6)  |  | July 12, 2002    |  | 20,000             |  | 4 weeks                  |
| JohnDonaldson(6)    |  | July 24, 2002    |  | 20,000             |  | 4 weeks                  |
| David Gill(6)(7)    |  | April 7, 2003    |  | 25,000             |  | 4weeks                   |
| Jeffrey Sampler(6)  |  | July 12,2002     |  | 20,000             |  | 4 weeks                  |
| PeterCochrane       |  | October 25,1999  |  | 5,000              |  | Resigned June26, 2003    |
| Sanjiv Talwar(8)    |  | March3, 1999     |  | 194,400            |  | Resigned January 20,2003 |
|                     |

|  |
|--|
|  |  |
|  |

| (1) | TheExecutive Directors and their dependent children are entitled toprivate health insurance cover and all the directors are entitled tobenefit from director and officer liability insurance arranged by us.We have no obligation to provide and do not provide any other benefits(whether for pensions, the provision of motor cars, private telephoneor otherwise) to our directors, except as disclosed elsewhere in thisAnnual Report. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr. Dhamijaentered into a service agreement with us on and with effect fromOctober 2, 2002. The Company shall pay 7 percent of Mr. Dhamija'sannual salary into a pension scheme of his choosing, and shall alsoprovide a car and car parking space for his benefit. The Company shallalso reimburse Mr. Dhamija for all travel expenses incurred by him intraveling between London and Switzerland, his legal residence. Mr.Dhamija's service agreement provides that he shall not berequired to perform his duties for any longer than three months duringany period of notice, to effect an orderly handover of duties. Thebalance of any period of notice shall be paid in lieu. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Mr. Dhamija has entered into anindividual option arrangement with us, which is detailed elsewhere inthis Annual Report. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| (4) | Mrs. Dhamijaentered into a new service agreement with us on and with effect fromJanuary 16, 2003. Mrs. Dhamija's service agreement provides thatshe shall not be required to perform her duties for any longer thanthree months during any period of notice, to effect an orderly handoverof duties. The balance of any notice period will be paid inlieu. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Mr. Liney was appointed asan Executive Director on March 18, 2003. Salary in lieu of noticeperiod is payable on early termination. |
|-----|------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Each of our Non-Executive Directors(Messrs Choudhrie, Donaldson, Gill and Sampler) have entered intoletters of appointment with us. Messrs. Choudhrie, Donaldson, Gill andSampler have been appointed for a period of two years. Upon terminationof such appointment, the relevant Non-Executive Director will receivehis director's fee on a pro-rata basis to the extent unpaid up tothe date of termination. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Mr.Gill was appointed as a Non-Executive Director on April 7,2003. |
|-----|--------------------------------------------------------------------|

| (8) | Dr. Talwar receivedcompensation of (pounds) 68,765 for termination of office as of January20, 2003. |
|-----|-----------------------------------------------------------------------------------------------------|

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Corporate Governance

The Board isresponsible for the overall management of the Group and meets a minimumof four times a year. The Board has a schedule of matters specificallyreserved for its decision and has established a number of committees.The Board delegates the day-to-day responsibility of managing theCompany to the Executive Directors, who, along with the CompanySecretary and Head of Human Resources, form the Group ManagementCommittee.

All Directors bring independent judgement to bear onissues of strategy, performance and resources, including considerationof key appointments and standards of conduct. Directors receive agendasand detailed Board papers prior to each meeting together with regularand ad hoc reports and presentations from management.

The Boardreceives quarterly reports from management on key issues such asinvestment strategy, financial performance and operational matters. OnJune 17, 2003 the Board held a Strategy Day, during which it receivedand considered management presentations on key strategic issues facingthe Group and identified Board priorities for the next year.

Directors have access to the advice and services of the CompanySecretary who is responsible for ensuring that Board procedures arefollowed. Directors can also take advice from the Company'slawyers at the Company's expense. The Directors have access toindependent professional advice if required and any training consideredappropriate to their position, on appointment and as necessarythereafter. Directors also receive information about theirresponsibilities and duties from the Company's lawyers.

The Board has sought to ensure that Directors are properly briefedon issues arising at Board Meetings by establishing procedures forpre-approving agendas, the distribution of Board papers and in seekingfurther information from management as required.

Mr. DineshDhamija undertakes the dual role of Chairman and Chief ExecutiveOfficer. For the present, the Board believes that, with the formationof the Group Management Committee, together with the strong independentelement of the Board, there is sufficient distribution ofresponsibilities at the top of the Group to ensure that undue power isnot concentrated in the hands of one individual.

BoardCommittees

The Board has delegated specific responsibilities tothe Audit, Remuneration, and Nomination Disclosure Controls andProcedures and Share Option Allotment committees, all of which havefixed terms of reference. All members of the Audit, Remuneration andNomination Committees are independent Non-Executive Directors.

Audit Committee

The Audit Committee is required tomeet at least twice each year and convened five times during 2003. TheAudit Committee consists of a minimum of three members of the Board.The Committee is chaired by Mr. David Gill, a chartered accountant whowas appointed to the Committee and appointed Chairman of the Committeeon April 30, 2003 following his appointment to the Board. Since June26, 2003, the Committee has consisted of the following four members ofthe Board: Messrs. David Gill (Chairman), Sudhir Choudhrie, JohnDonaldson and Jeffrey Sampler. Mr. Peter Cochrane served on theCommittee until June 26, 2003 when he resigned from the Board and wasthe previous Chairman of the Committee. The Chief Executive Officer,the Chief Financial Officer, the Group Internal Auditor and theexternal auditors are invited to attend these meetings as appropriate.The Committee can obtain outside legal or other independentprofessional advice at the Company's expense.

The AuditCommittee is responsible for dealing with accounting matters, financialreporting and reviewing the effectiveness of the company'sinternal controls systems. The Committee reviews the quarterly, interimand annual financial statements and receives reports from the externalauditors on the results of their audit, matters of internal financialcontrol and accounting issues. The Committee also monitors the scope,results and cost-effectiveness of the external audit process, assessesthe independence and objectivity of the auditors and authorises anynon-audit work they may be asked to undertake, within a defined policyagreed by the Committee.

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Remuneration Committee

TheRemuneration Committee convened five times during 2003. TheRemuneration Committee consists of a minimum of two members of theBoard. The Committee is chaired by Mr. Sudhir Choudhrie and alsoconsists of the following members: Messrs. John Donaldson, David Gill(from April 30, 2003) and Jeffrey Sampler. Mr. Peter Cochrane served onthe Committee until June 26, 2003 when he resigned from the Board.

The Remuneration Committee measures the performance of the ExecutiveDirectors and determines their annual remuneration and benefits,including salary, bonuses, share options and pension rights. Theremuneration of the Non-Executive Directors is determined by the ChiefExecutive Officer within limits set out in the Articles of Association.No Director is involved in deciding his own remuneration.

Nomination Committee

The Nomination Committeeconvened four times during 2003. The Nomination Committee isconstituted from members of the Board and the quorum for decisions ofthe Committee is two. The Committee is chaired by Mr. Jeffrey Samplerand consists of the following additional members: Messrs. SudhirChoudhrie, John Donaldson and David Gill (from April 30, 2003). Mr.Peter Cochrane served on the Committee until June 26, 2003 when heresigned from the Board. The Committee is responsible for recommendingany new appointments to the Board and in 2003 recommended theappointment of David Gill following the consideration of a number ofcandidates. The Committee reviews the composition and balance of theBoard and its committees and is authorised to employ the services ofexternal recruitment advisers to assist them in carrying out theirduties.

Disclosure Controls and ProceduresCommittee

The Disclosure Controls and Procedures Committeeis responsible for ensuring that all disclosures made by the Company inrelation to this and other filings are accurate and complete. Eachmember of the Committee is responsible for reviewing this Annual Reportprior to filing and certifying that, to the best of his/her knowledge,all disclosures are accurate and complete.

Share OptionsAllotment Committee

The Share Options Allotment Committeewas established by the Executive Board in November, 2002 to allotshares in respect of the exercise of options under the ebookers.comExecutive Share Option Scheme 1999. The Committee has no power to grantoptions but merely to authorize the allotment of shares when anemployee wishes to exercise options already granted to him or her.

Removal of Directors

Pursuant to the Companies Act and ourarticles of association, our shareholders may, by ordinary resolutionpassed by a simple majority, remove any director from office,notwithstanding any agreement between us and the director, but withoutprejudice to any claim the director may have for damages for breach ofany agreement to which we are a party.

60

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6.D    Employees

|                           |  |                          |       |                           |  |                          |     |        |  |        |     |        |  |  |
|---------------------------|--|--------------------------|-------|---------------------------|--|--------------------------|-----|--------|--|--------|-----|--------|--|--|
| Location                  |  | Totalnumber of employees |
|                      |  | (as at December31, 2003) |       | (as at December 31, 2002) |  | (asat December 31, 2001) |
| United Kingdom andIreland |  |                     | 902   |                      |  |                     | 383 |   |  |   | 298 |   |
| India                     |  |                     | 710   |                      |  |                     | 365 |   |  |   | 132 |   |
| Sweden                    |  |                     | 40    |                      |  |                     | 41  |   |  |   | 37  |   |
| The Netherlands           |  |                     | 43    |                      |  |                     | 37  |   |  |   | 35  |   |
| Spain                     |  |                     | 41    |                      |  |                     | 33  |   |  |   | 29  |   |
| France                    |  |                     | 30    |                      |  |                     | 32  |   |  |   | 27  |   |
| Finland                   |  |                     | 32    |                      |  |                     | 36  |   |  |   | 22  |   |
| Germany                   |  |                     | 15    |                      |  |                     | 18  |   |  |   | 15  |   |
| Switzerland               |  |                     | 18    |                      |  |                     | 8   |   |  |   | 7   |   |
| Norway                    |  |                     | 15    |                      |  |                     | 12  |   |  |   | 1   |   |
| **TOTAL**                 |  |                     | 1,846 |                      |  |                     | 965 |   |  |   | 603 |   |
|                           |

The increase in employees in the UnitedKingdom reflects the acquisition of Travelbag and the increase inemployees in India reflects the organic growth of that operation asdescribed elsewhere in this Annual Report.

6.E    Shareownership

Employee Share Schemes

An employee shareoption scheme is in operation. The employee share option scheme isaimed to encourage employee retention and commitment to ebookers plcthrough long-term fiscal rewards. As at December 31, 2003 and inaddition to the individual option arrangements into which we haveentered with some of our Directors referred to below, 7,108,319 optionson ordinary shares of (pounds) 0.14 each were outstanding as set out inthe table below. All these options were granted for no considerationunder the ebookers.com plc Executive Share Option Scheme 1999 describedbelow. The options were granted between November 11, 1999 and December9, 2003 and every option has an exercise period which lapses on thetenth anniversary of its grant therefore the end of the exercise periodfor each option granted will be between November 11, 2009 and December9, 2013.

Note that the options set out in the table below relateto the ebookers.com plc Executive Share Option Scheme 1999 and excludeoptions granted to our Chairman, former Managing Director andNon-Executive Directors which are more fully described elsewhere inthis Annual Report.

|                   |  |                                                   |           |        |  |  |
|-------------------|--|---------------------------------------------------|-----------|--------|--|--|
| Optionprice       |  | No. of shares under option as at December 31,2003 |
| £2          |  |                                              | 48,685    |   |
| £2-£3 |  |                                              | 2,373,927 |   |
| £3-£4 |  |                                              | 1,667,478 |   |
| £4-£5 |  |                                              | 1,232,313 |   |
| £5-£6 |  |                                              | 1,630,534 |   |
| £6          |  |                                              | 155,382   |   |
| **TOTAL**         |  |                                              | 7,108,319 |   |
|                   |

Weexpect to incur National Insurance charges relating to the aboveoptions and to any options granted to our Directors on or after April6, 1999 referred to below but not the options granted under the InlandRevenue approved scheme described below, provided they are exercised inan Inland Revenue approved way on the difference between the marketvalue of the shares at the exercise date and the option price, at theNational Insurance rate applicable at the date of exercise.

61

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The ebookers.com plc Executive ShareOption Scheme 1999

This scheme has an Inland Revenue approvedappendix for our employees in the United Kingdom. The main part of thescheme is unapproved by the Inland Revenue and options may be grantedthereunder to employees in the United Kingdom and our other Europeanoffices.

Summary of unapproved appendix to the scheme

Eligibility — Executive Directors, and most employees orclasses of employees of ebookers plc and any designated subsidiaries orholding companies are eligible to participate in the scheme.

Grant of options — The board of ebookers plc or a dulyauthorized committee may, at their discretion, grant options to acquireshares under the scheme. Options may be granted subject to certainconditions based on objective criteria. Options may be granted at anytime within the ten year period following the date of adoption of thescheme by the Directors.

Options granted under the unapprovedpart of the scheme will not be eligible for favorable tax treatment.Options may also be granted under the Inland Revenue-approved part ofthe scheme (contained in the schedule) and these options are eligiblefor favorable tax treatment currently up to a maximum of (pounds)30,000 per person.

Options must be granted with an option pricewhich is no less than the nominal value of an ebookers plc ordinaryshare. No consideration is payable for the grant of options.

Exercise of option — The options will normally becomeexercisable over a four year period commencing on the first anniversaryof the date of grant, provided that the optionholder remains anemployee or director of ebookers plc or an associated company. Optionsmay, however, be exercised within six months of cessation of employmentin certain circumstances, for example, if an option holder ceases to bea Director or employee of ebookers plc or an associated company due toill health, injury, disability, redundancy, retirement or change ofcontrol or transfer of all or part of his employing company outside theGroup. The rules of the scheme were changed on July 30, 2003 so that,for options granted after that date, only vested options would beexercisable in those circumstances. The Directors may, at theirdiscretion, extend that period.

Options may also be exercisedearly in the event of a takeover, winding-up, reconstruction oramalgamation of ebookers plc, within a limited period. In addition, inthe event of a takeover or reconstruction, an option holder may begiven the opportunity of exchanging his options over our shares foroptions over shares in the acquiring company. If an option holderceases to be a Director or employee by reason of misconduct or poorperformance, all his options will lapse on cessation of suchemployment, subject to the discretion of the directors. In any event,all options which have not been exercised or have not otherwise lapsedwill lapse on the tenth anniversary of the grant of the option.

Except for transmission of an option on the death of an optionholder to their personal representative (to be exercised within oneyear of the death of the option holder), options are not transferableand may only be exercised by the persons to whom they are granted.

Issue of shares — Shares in ebookers plc issued on theexercise of options will rank equally with shares in issue at thattime, except in respect of rights arising by reference to a priorrecord date. The rules of the scheme were changed on July 30, 2003 sothat, for options granted after that date, the Company reserves theright to provide shares equal in value to the difference between theoption price and the market price. These are termed"Equity Settled Options". This is in order tohelp preserve headroom under the scheme while still providing the gainin the value of the option to the participants.

Variation inshare capital — The number of shares underlying each option andthe amount payable for each share on the exercise of an option may beadjusted following certain variations in the share capital of ebookersplc, including a capitalization or rights issue, sub-division,consolidation or reduction of share capital.

Scheme limits— The total number of shares over which options may be grantedunder the scheme in any period of ten years may not exceed 14.5 percentof issued share capital on the date of  grant.

62

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Amendments — Our Board or a dulyauthorized committee may amend any provision of the scheme and theterms of options.

Termination — Our Board or a dulyauthorized committee may, at any time, terminate the scheme. If thishappens, no further options will be granted but the provisions of thescheme will continue in relation to options already granted. In anyevent, no options may be granted after the tenth anniversary of thedate on which the scheme was adopted by the Directors and the schemewill automatically terminate on that date.

Summary of InlandRevenue approved appendix to the scheme

The InlandRevenue-approved part of the scheme is substantially similar to theunapproved scheme subject to the following differences.

Eligibility — Most employees or Directors of ebookers plc, itssubsidiaries or any other company permitted by the Inland Revenue toparticipate in the scheme (and which has been designated by thedirectors as a participating company) who are (in the case of aDirector of ebookers plc) required to devote at least 25 hours a weekand who are not excluded by reason of the material interest provisionsin the Taxes Act, are eligible to participate in the scheme.

Grant of options — Options will be granted with an optionprice which is no less than the market value of an ebookers plcordinary share on the date of grant (or such other date as may beagreed with the Inland Revenue).

Any performance conditions mustbe set out in documentation to be approved in advance by the InlandRevenue.

Individual limits — Participation in the schemeis limited so that, at any one time, the aggregate market value ofebookers plc ordinary shares subject to outstanding options granted toany employee or Director under Inland Revenue-approved executive shareoption schemes established by ebookers plc or any of its associatedcompanies does not exceed (pounds) 30,000 per person.

Issue ofshares — Equity Settled Options are not permitted.

Variation in share capital — No adjustment in the number ofshares subject to each option or the amount payable for each share onthe exercise of an option may be made without the prior approval of theInland Revenue.

Amendments — No changes that would affectthe Inland Revenue Approved Schedule or any options granted under thatschedule may be made without first obtaining the prior consent of theInland Revenue.

Individual Option Agreement

We haveentered into an individual option agreement with Mr. Dhamija in respectof the Company's ordinary shares. Details are set out below.

Grant of option — Under an option agreement with Mr. Dhamijadated October 2, 2002 (as amended), ebookers plc granted Mr. Dhamija aseries of five options, each of which entitles Mr. Dhamija to subscribefor shares of (pounds) 0.14 each equal to 1 percent of the issuedordinary share capital of ebookers on the business day immediatelypreceding the date of exercise.

The options were granted withthe following option prices: $100,000 for the first option, $200,000for the second option, $300,000 for the third option, $350,000 for thefourth option and $400,000 for the fifth option.

Noconsideration was payable for the grant of the options.

Exerciseof options — The first option was exercisable at any time afterMay 16, 1999, and the second option was exercisable at any time afterNovember 11, 1999. The remainder of the options became exercisable overan 18 month period beginning on May 12, 2000, and generally remainexercisable through October 20, 2009.

63

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In the event of a takeover, scheme ofarrangement or winding-up, the options may be exercised within alimited period of time prior to or following that event, at the end ofwhich they will lapse.

All options which have not been exercisedwill lapse on the April 2, 2009. Since all of the options are nowvested exercise of them is not dependent upon Mr. Dhamija continuing asan employee or Director.

Except for transmission of an option onthe death of Mr. Dhamija to his personal representative (such option tobe exercised within one year of his death), options are nottransferable and may only be exercised by Mr. Dhamija.

Issue ofshares — Shares in ebookers plc issued to Mr. Dhamija on theexercise of his options will rank equally with shares in issue at thattime, except in respect of rights arising by reference to a priorrecord date.

Variation in share capital — The number ofshares underlying each option or the amount payable for each share onthe exercise of an option may be adjusted (including retrospectiveadjustments), subject to the consent of Mr. Dhamija, following certainvariations in share capital of ebookers, including a capitalization orrights issue, sub-division, consolidation or reduction of share capitalprovided that such adjustment does not adversely affect the rights ofMr. Dhamija.

Directors' and Executive Officers'Share Ownership

The following table shows the number ofordinary shares beneficially owned by our Directors and formerDirectors and Executive Officers (as a group) as of March 19,2004.

|                                     |  |                                   |            |            |  |        |         |         |  |  |
|-------------------------------------|--|-----------------------------------|------------|------------|--|--------|---------|---------|--|--|
| BeneficialOwner                     |  | Ordinary Shares BeneficiallyOwned |            | Percent(1) |
| Dinesh Dhamija(2)(3)(4)             |  |                              | 26,985,700 | (4)   |  |   | 41.53   | %  |
| NigelAddison Smith(3)               |  |                              | 12,000     |       |  |   | 0.01    | %  |
| TaniDhamija(3)                      |  |                              | 0          |       |  |   | — |    |
| PeterLiney(3)                       |  |                              | 0          |       |  |   | — |    |
| SudhirChoudhrie(5)                  |  |                              | 8,768      |       |  |   | 0.01    | %  |
| JohnDonaldson                       |  |                              | 15,547     |       |  |   | 0.03    | %  |
| DavidGill                           |  |                              | 0          |       |  |   | — |    |
| Jeffrey Sampler(5)                  |  |                              | 8,768      |       |  |   | 0.01    | %  |
| PeterCochrane(5)                    |  |                              | 0          |       |  |   | — |    |
| SanjivTalwar(5)                     |  |                              | 644        |       |  |   | 0.01    | %  |
| OtherExecutive Officers (as agroup) |  |                              | 0          |       |  |   | — |    |
| **TOTAL**                           |  |                              | 27,031,427 |       |  |   | 41.60   | %  |
|                                     |

|  |
|--|
|  |  |
|  |

| (1) | Thepercentage of issued share capital as at March 19, 2004 is based on theordinary issued share capital of ebookers plc of 64,975,958 ordinaryshares. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Options have beengranted under an individual agreement with Mr. Dhamija which isdescribed elsewhere in this document. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

| (3) | Options granted to Mr. Addison Smith,Mrs. Dhamija, Mr. Liney and a further grant to Mr.  Dhamija, aswell as Mrs. H O'Byrne and Mr. P Kennedy (all set out in thetable below) were granted under the ebookers.com plc Executive ShareOption Scheme 1999. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Flightbookers Investments Limiteddirectly beneficially owns 26,985,700 ordinary shares representingapproximately percent of the outstanding ordinary shares of ebookersplc. As a result of his interest under a trust which controlsFlightbookers Investments Limited, Mr. Dhamija has a beneficialinterest in the 26,985,700 shares held by Flightbookers InvestmentsLimited. However, Dinesh Dhamija has a Relationship Agreement datedMarch 19, 2001 between him and the Company. Pursuant to this agreement,Dinesh Dhamija has provided undertakings to the Company in relation tothe exercise of his voting rights in respect of the ordinary sharecapital of the Company such that the Company is capable at all times ofcarrying on business independently |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

64

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|  | of him. All transactions entered intobetween him and the Company are, and will be, made on an arm'slength basis and on normal contractual terms. |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Options were granted to Dr Talwar underan individual agreement. Options granted to Peter Cochrane, SudhirChoudhrie and Jeffrey Sampler (all set out in the table below) weregranted outside the ebookers.com plc 1999 Executive Share OptionScheme. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Ownership of Share Options

The followingtable provides certain information relating to share options held bymembers of our Board as of December 31, 2003 or date of resignation,whichever occurred earlier intime.

|                   |  |                                                                                |         |              |  |                                          |  |            |         |        |  |                |  |           |  |  |  |  |  |  |  |  |
|-------------------|--|--------------------------------------------------------------------------------|---------|--------------|--|------------------------------------------|--|------------|---------|--------|--|----------------|--|-----------|--|--|--|--|--|--|--|--|
| Name              |  | No.of share options at December 31, 2003(or date ofresignation)Unvested Vested |         | Option price |  | Datesfrom which options may be exercised |  | Expirydate |
| DineshDhamija     |  |                                                                           | — |         |  | 5%of SC(1)                               |  | $          | 100,000 |   |  | 1%fr5/16/99    |  | 10/20/09  |
|              |  |                                                                           |    |         |  |                                     |  | $          | 200,000 |   |  | 1% fr 11/11/99 |  | 10/20/09  |
|              |  |                                                                           |    |         |  |                                     |  | $          | 300,000 |   |  | 1% fr 5/11/00  |  | 10/20/09  |
|              |  |                                                                           |    |         |  |                                     |  | $          | 350,000 |   |  | 1% fr 11/11/00 |  | 10/20/09  |
|              |  |                                                                           |    |         |  |                                     |  | $          | 400,000 |   |  | 1% fr11/11/01  |  | 10/20/09  |
|              |  |                                                                           | 87,336  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/04       |  | 01/29/13  |
|              |  |                                                                           | 87,336  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/05       |  | 01/29/13  |
|              |  |                                                                           | 87,336  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/06       |  | 01/29/13  |
|              |  |                                                                           | 87,336  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/07       |  | 01/29/13  |
|              |  |                                                                           |
| NigelAddisonSmith |  |                                                                           | — |         |  | 2,650                                    |  | £    | 2.825   |   |  | 07/02/03       |  | 07/01/12  |
|              |  |                                                                           | 2,650   |         |  |                                     |  | £    | 2.825   |   |  | 07/02/04       |  | 07/01/12  |
|              |  |                                                                           | 2,650   |         |  |                                     |  | £    | 2.825   |   |  | 07/02/05       |  | 07/01/12  |
|              |  |                                                                           | 2,650   |         |  |                                     |  | £    | 2.825   |   |  | 07/02/06       |  | 07/01/12  |
|              |  |                                                                           |    |         |  | 35,000                                   |  | £    | 2.15    |   |  | 07/02/03       |  | 07/01/12  |
|              |  |                                                                           | 35,000  |         |  | —                                  |  | £    | 2.15    |   |  | 07/02/04       |  | 07/01/12  |
|              |  |                                                                           | 35,000  |         |  | —                                  |  | £    | 2.50    |   |  | 07/02/05       |  | 07/01/12  |
|              |  |                                                                           | 35,000  |         |  | —                                  |  | £    | 2.50    |   |  | 07/02/06       |  | 07/01/12  |
|              |  |                                                                           |
| TaniDhamija       |  |                                                                           | 64,046  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/04       |  | 01//28/13 |
|              |  |                                                                           | 64,046  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/05       |  | 01//28/13 |
|              |  |                                                                           | 64,047  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/06       |  | 01//28/13 |
|              |  |                                                                           | 64,047  |         |  | —                                  |  | £    | 3.435   |   |  | 01/29/07       |  | 01//28/13 |
|              |  |                                                                           |
| PeterLiney        |  |                                                                           | 3,030   |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/04       |  | 03/23/13  |
|              |  |                                                                           | 3,030   |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/05       |  | 03/23/13  |
|              |  |                                                                           | 3,030   |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/06       |  | 03/23/13  |
|              |  |                                                                           | 3,031   |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/07       |  | 03/23/13  |
|              |  |                                                                           | 83,469  |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/04       |  | 03/23/13  |
|              |  |                                                                           | 83,470  |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/05       |  | 03/23/13  |
|              |  |                                                                           | 83,470  |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/06       |  | 03/23/13  |
|              |  |                                                                           | 83,470  |         |  | —                                  |  | £    | 2.475   |   |  | 03/24/07       |  | 03/23/13  |
|              |  |                                                                           |
| SudhirChoudhrie   |  |                                                                           | — |         |  | 2,348                                    |  | £    | 0.17    |   |  | 01/01/01       |  | 12/31/10  |
|              |  |                                                                           |
| JeffreySampler    |  |                                                                           | — |         |  | 1,794                                    |  | £    | 0.17    |   |  | 01/01/01       |  | 12/31/10  |
|              |  |                                                                           |
|                   |

65

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|                               |  |                                                                                |                |              |  |                                          |              |            |         |         |        |  |                  |  |                  |  |  |  |  |  |  |  |
|-------------------------------|--|--------------------------------------------------------------------------------|----------------|--------------|--|------------------------------------------|--------------|------------|---------|---------|--------|--|------------------|--|------------------|--|--|--|--|--|--|--|
| Name                          |  | No.of share options at December 31, 2003(or date ofresignation)Unvested Vested |                | Option price |  | Datesfrom which options may be exercised |              | Expirydate |
| PeterCochrane (2)   |  |                                                                           | —— |         |  |                                     | 21,28021,280 |            | £ | 2.78    |   |  | 10/25/0010/25/01 |  | 10/24/0910/24/09 |
|                          |  |                                                                           | —        |         |  |                                     | 21,280       |            | £ | 5.56    |   |  | 10/25/02         |  | 10/24/09         |
|                          |  |                                                                           | —        |         |  |                                     | 21,280       |            | £ | 5.56    |   |  | 10/25/03         |  | 10/24/09         |
|                          |  |                                                                           |
| SanjivTalwar (2)(3)           |  |                                                                           | —        |         |  |                                     | 1.5          |            | $       | 150,000 |   |  | 0.75% fr14/05/99 |  | 04/02/09         |
|                          |  |                                                                           |           |         |  |                                     |         |            | $       | 200,000 |   |  | 0.75% fr11/11/99 |  | 02/04/09         |
|                          |  |                                                                           | —        |         |  |                                     | 1            |            | $       | 4.35    |   |  | 05/11/00         |  | 02/04/09         |
|                          |  |                                                                           | —        |         |  |                                     | 1            |            | $       | 1.15    |   |  | 11/11/00         |  | 02/04/09         |
|                          |  |                                                                           |
| HelenO'Byrne                  |  |                                                                           | —        |         |  |                                     | 2,427        |            | £ | 3.09    |   |  | 08/28/03         |  | 08/27/12         |
|                          |  |                                                                           | 2,427          |         |  |                                     | —      |            | £ | 3.09    |   |  | 08/28/04         |  | 08/27/12         |
|                          |  |                                                                           | 2,427          |         |  |                                     | —      |            | £ | 3.09    |   |  | 08/28/05         |  | 08/27/12         |
|                          |  |                                                                           | 2,427          |         |  |                                     | —      |            | £ | 3.09    |   |  | 08/28/06         |  | 08/27/12         |
|                          |  |                                                                           | —        |         |  |                                     | 10,000       |            | £ | 1.00    |   |  | 08/28/02         |  | 08/27/12         |
|                          |  |                                                                           | —        |         |  |                                     | 27,659       |            | £ | 3.09    |   |  | 08/28/03         |  | 08/27/12         |
|                          |  |                                                                           | 27,659         |         |  |                                     | —      |            | £ | 3.09    |   |  | 08/28/04         |  | 08/27/12         |
|                          |  |                                                                           | 27,660         |         |  |                                     | —      |            | £ | 3.09    |   |  | 08/28/05         |  | 08/27/12         |
|                          |  |                                                                           |
| PaulKennedy                   |  |                                                                           | 1,738          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/04         |  | 06/30/13         |
|                          |  |                                                                           | 1,738          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/05         |  | 06/30/13         |
|                          |  |                                                                           | 1,738          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/06         |  | 06/30/13         |
|                          |  |                                                                           | 1,738          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/07         |  | 06/30/13         |
|                          |  |                                                                           | 9,523          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/04         |  | 06/30/13         |
|                          |  |                                                                           | 9,523          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/05         |  | 06/30/13         |
|                          |  |                                                                           | 9,523          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/06         |  | 06/30/13         |
|                          |  |                                                                           | 9,523          |         |  |                                     |         |            | £ | 4.44    |   |  | 07/01/07         |  | 06/30/13         |
|                               |

|  |
|--|
|  |  |
|  |

| (1) | "SC"equals ordinary issued share capital of ebookers plc on the businessday immediately preceding the date of exercise. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr. Peter Cochrane resigned from ebookersplc on June 26, 2003 and Mr. Sanjiv Talwar resigned from ebookers plcon January 20, 2003. Notwithstanding this, their options remainedexercisable as shown above. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | During 2003, Mr. Sanjiv Talwar exerciseda portion of his subsisting options and currently has options amountingto 0.42% of SC (1) outstanding at an option price of $4.35 pershare |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS

7.A    Major shareholders

As at thedates noted below, ebookers plc had been notified of the followinginterests of three percent. or more in its issued ordinary shares.

|                                     |  |                                |            |            |  |        |       |        |  |  |
|-------------------------------------|--|--------------------------------|------------|------------|--|--------|-------|--------|--|--|
| March19, 2004                       |  |                           |            |       |
| BeneficialOwner                     |  | Number of Ordinary Shares Held |            | Percent(2) |
| Flightbookers InvestmentsLimited(1) |  |                           | 26,985,700 |       |  |   | 41.53 |   |
|                                     |

66

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|                                     |  |                                |            |            |  |        |       |        |  |  |
|-------------------------------------|--|--------------------------------|------------|------------|--|--------|-------|--------|--|--|
| December31, 2003                    |  |                           |            |       |
| BeneficialOwner                     |  | Number of Ordinary Shares Held |            | Percent(3) |
| Flightbookers InvestmentsLimited(1) |  |                           | 26,985,700 |       |  |   | 41.56 |   |
|                                     |

|                                     |  |                                |            |            |  |        |       |        |  |  |
|-------------------------------------|--|--------------------------------|------------|------------|--|--------|-------|--------|--|--|
| December31, 2002                    |  |                           |            |       |
| BeneficialOwner                     |  | Number of Ordinary Shares Held |            | Percent(4) |
| Flightbookers InvestmentsLimited(1) |  |                           | 25,964,136 |       |  |   | 51.86 |   |
|                                     |

|                                    |  |                                |            |            |  |        |       |        |  |  |
|------------------------------------|--|--------------------------------|------------|------------|--|--------|-------|--------|--|--|
| December31, 2001                   |  |                           |            |       |
| BeneficialOwner                    |  | Number of Ordinary Shares Held |            | Percent(5) |
| Flightbookers InvestmentLimited(1) |  |                           | 25,964,136 |       |  |   | 55.44 |   |
|                                    |

|  |
|--|
|  |  |
|  |

| (1) | Asat March 19, 2004, Flightbookers Investments Limited directly owns26,985,700 ordinary shares representing approximately 41.53% ofthe outstanding ordinary shares of ebookers plc. As a result of hisinterest under a trust which controls Flightbookers InvestmentsLimited, Mr. Dhamija has a beneficial interest in the 26,985,700 sharesheld by Flightbookers Investments Limited. However, Dinesh Dhamija hasa Relationship Agreement dated March 19, 2001 between him and theCompany. Pursuant to this agreement, Dinesh Dhamija has providedundertakings to the Company in relation to the exercise of his votingrights in respect of the ordinary share capital of the Company suchthat the Company is capable at all times of carrying on businessindependently of him. All transactions entered into between him and theCompany are, and will be, made on an arm's length basis and onnormal contractual terms. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Thepercentage of issued share capital as at March 19, 2004 is based on theordinary issued share capital of ebookers plc of 64,975,958 ordinaryshares. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The percentage of issuedshare capital as at December 31, 2003, is based on the adjustedordinary issued share capital of ebookers of 64,931,348 ordinaryshares. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The percentage of issuedshare capital as at December 31, 2002, is based on the adjustedordinary issued share capital of ebookers plc of 50,061,736 ordinaryshares. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | The percentage of issuedshare capital as at December 31, 2001, is based on the adjustedordinary issued share capital of ebookers plc of 46,833,516 ordinaryshares. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Save as stated above, no other person has notifiedus of an interest, which is notifiable under the Companies Act 1985,being an interest of three percent or more in our issued ordinary sharecapital.

According to records available to ebookers plc atDecember 31, 2003, 19,009,810 ordinary shares (being approximately29.28% percent of the issued share capital) were held asADR's by 6 shareholders with registered addresses in the UnitedStates.

No major shareholder has different voting rights thanany other holder of ordinary shares. Except as otherwise disclosedabove and to the best of our knowledge, we are not aware of beingdirectly or indirectly owned or controlled by one or more corporationsor by any government.

7.B    Related party transactions

There have been no material related party transactions during thelast fiscal year to which any Director, Executive Officer or 3%shareholder, or any relative or spouse of any of them, or any entityowned or controlled by any of the foregoing was a party. There is noindebtedness owed to ebookers plc by any Director, Executive Officer or3% shareholder.

7.C    Interests of experts andcounsel

Not applicable.

ITEM 8.    FINANCIALINFORMATION

Reference is made to Item 18 for a list of allfinancial statements and notes related thereto filed as part of thisAnnual Report.

67

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For information on legal proceedings,please refer to "Item 4.B Business Overview — LegalProceedings".

ITEM 9.    THE OFFER ANDLISTING

9.A    Listing Details

Our ADRs, eachrepresenting two ordinary shares, are quoted on the Nasdaq NationalMarket and our ordinary shares are listed on the London Stock Exchange.JP Morgan Chase Bank is our depositary issuing ADRs under the depositagreement, as amended, dated November 11, 1999, among us, JP MorganChase Bank, as depositary, and the holders from time to time ofADRs.

Our ADRs are quoted under the symbol"EBKR" on the Nasdaq National Market and ourordinary shares are quoted under the symbol"EBR" on the London Stock Exchange.

OnApril 8, 2002, we announced our intention to delist our ADRs from theNeuer Markt of the Frankfurt Stock Exchange and our ADRs wereofficially delisted on October 15, 2002.

The following tablesset forth, for the periods indicated, the reported high and low salesprices of our ADRs on the Nasdaq National Market and the London StockExchange at the close of relevant trading days. Where the same pricewas recorded on consecutive days, the first day has been used whenexchange rates have been calculated.

Nasdaq NationalMarket

|                                                            |  |                                                             |       |        |  |        |       |        |  |  |
|------------------------------------------------------------|--|-------------------------------------------------------------|-------|--------|--|--------|-------|--------|--|--|
|                                                       |  | U.S.dollars per ADR (One ADR represents two ordinaryshares) |
| FiscalYear       Period |  | High                                                        |       | Low    |
| **1999**                                                   |  |                                                        | 27.75 |   |  |   | 17.31 |   |
| **2000**                                                   |  |                                                        | 42.94 |   |  |   | 2.38  |   |
| **2001**                                                   |  |                                                        | 5.00  |   |  |   | 2.00  |   |
| **2002**                                                   |  |                                                        | 12.91 |   |  |   | 2.54  |   |
| **2003**                                                   |  |                                                        | 20.51 |   |  |   | 5.86  |   |
| **2002**Firstquarter                                       |  |                                                        | 3.53  |   |  |   | 2.54  |   |
|   Secondquarter                                  |  |                                                        | 9.83  |   |  |   | 3.01  |   |
|   Thirdquarter                                   |  |                                                        | 9.35  |   |  |   | 4.65  |   |
|   Fourthquarter                                  |  |                                                        | 12.91 |   |  |   | 6.15  |   |
| **2003** Firstquarter                                      |  |                                                        | 12.62 |   |  |   | 6.25  |   |
|   Secondquarter                                  |  |                                                        | 17.32 |   |  |   | 5.86  |   |
|   Thirdquarter                                   |  |                                                        | 20.51 |   |  |   | 15.70 |   |
|   Fourthquarter                                  |  |                                                        | 17.75 |   |  |   | 13.60 |   |
| September2003                                              |  |                                                        | 20.51 |   |  |   | 17.74 |   |
| October2003                                                |  |                                                        | 17.75 |   |  |   | 13.60 |   |
| November2003                                               |  |                                                        | 17.20 |   |  |   | 14.58 |   |
| December2003                                               |  |                                                        | 15.37 |   |  |   | 13.62 |   |
| January2004                                                |  |                                                        | 18.06 |   |  |   | 14.48 |   |
| February2004                                               |  |                                                        | 17.11 |   |  |   | 15.28 |   |
|                                                            |

The highestclosing market price achieved by ADRs on the Nasdaq National Market in2003, 2002, 2001 and 2000 was $20.51, $12.91, $5.00 and $42.94,respectively. The lowest closing market price experienced by our ADRsin 2003, 2002, 2001 and 2000 was $5.86, $2.54, $2.00 and $2.38,respectively.

68

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The London StockExchange

|                                                            |  |                |       |                                                                                              |  |        |       |        |  |        |      |        |  |        |      |        |  |  |
|------------------------------------------------------------|--|----------------|-------|----------------------------------------------------------------------------------------------|--|--------|-------|--------|--|--------|------|--------|--|--------|------|--------|--|--|
|                                                       |  | Penceper Share |       | Equivalent value in U.S. dollars perOrdinary Share(1)(One ADR represents two ordinaryshares) |
| FiscalYear       Period |  | High           |       | Low                                                                                          |  | High   |       | Low    |
| **1999**                                                   |  |           | N/A   |                                                                                         |  |   | N/A   |   |  |   | N/A  |   |  |   | N/A  |   |
| **2000**                                                   |  |           | N/A   |                                                                                         |  |   | N/A   |   |  |   | N/A  |   |  |   | N/A  |   |
| **2001**                                                   |  |           | 172.5 |                                                                                         |  |   | 68.0  |   |  |   | 2.38 |   |  |   | 1.00 |   |
| **2002**                                                   |  |           | 402.5 |                                                                                         |  |   | 94.0  |   |  |   | 6.39 |   |  |   | 1.33 |   |
| **2003**                                                   |  |           | 626.0 |                                                                                         |  |   | 185.0 |   |  |   | 9.93 |   |  |   | 2.91 |   |
| **2002**First quarter                                      |  |           | 122.5 |                                                                                         |  |   | 94.0  |   |  |   | 1.74 |   |  |   | 1.33 |   |
|   Secondquarter                                  |  |           | 340.0 |                                                                                         |  |   | 104.0 |   |  |   | 5.10 |   |  |   | 1.49 |   |
|   Thirdquarter                                   |  |           | 320.0 |                                                                                         |  |   | 150.0 |   |  |   | 4.87 |   |  |   | 2.36 |   |
|   Fourthquarter                                  |  |           | 402.5 |                                                                                         |  |   | 220.0 |   |  |   | 6.39 |   |  |   | 3.45 |   |
| **2003**Firstquarter                                       |  |           | 402.5 |                                                                                         |  |   | 200.0 |   |  |   | 6.43 |   |  |   | 3.21 |   |
|   Secondquarter                                  |  |           | 500.0 |                                                                                         |  |   | 185.0 |   |  |   | 8.34 |   |  |   | 2.91 |   |
|   Thirdquarter                                   |  |           | 626.0 |                                                                                         |  |   | 454.0 |   |  |   | 9.93 |   |  |   | 7.55 |   |
|   Fourthquarter                                  |  |           | 534.0 |                                                                                         |  |   | 375.0 |   |  |   | 8.90 |   |  |   | 6.57 |   |
| September2003                                              |  |           | 626.0 |                                                                                         |  |   | 525.0 |   |  |   | 9.93 |   |  |   | 8.73 |   |
| October2003                                                |  |           | 534.0 |                                                                                         |  |   | 417.5 |   |  |   | 8.90 |   |  |   | 6.93 |   |
| November2003                                               |  |           | 503.0 |                                                                                         |  |   | 413.0 |   |  |   | 8.44 |   |  |   | 7.02 |   |
| December2003                                               |  |           | 433.0 |                                                                                         |  |   | 375.0 |   |  |   | 7.45 |   |  |   | 6.57 |   |
| January2004                                                |  |           | 496.0 |                                                                                         |  |   | 396.5 |   |  |   | 8.93 |   |  |   | 7.07 |   |
| February2004                                               |  |           | 465.0 |                                                                                         |  |   | 415.0 |   |  |   | 8.69 |   |  |   | 7.55 |   |
|                                                            |

|  |
|--|
|  |  |
|  |

| (1) | U.S.dollar equivalents of the pence per share price are derived using thenoon buying rates on the date of the relevant high or low,respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

The highest closing market price achieved byour ordinary shares on the London Stock Exchange in 2003, 2002 and 2001was £6.26, £4.03 and £1.73, respectively. The lowestclosing market price achieved by our ordinary shares in 2003, 2002 and2001 was £1.85, £0.94 and £0.68, respectively.

9.B    Plan of Distribution

Not applicable.

9.C    Market

See "9.A ListingDetails".

9.D    Selling Shareholders

Not applicable.

9.E    Dilution

Notapplicable.

9.F    Expenses of Issue

Notapplicable.

ITEM 10.    ADDITIONAL INFORMATION

10.A    Share Capital

Not applicable.

10.B    Memorandum and Articles of Association

Information with respect to the Item 10.B, Memorandum and Articlesof Association, is hereby incorporated into this Annual Report byreference to the Form F-1 Registration Statement (File No. 333-11062)previously filed with the Securities and Exchange Commission("SEC").

69

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10.C    Material contracts

Weor our subsidiaries are a party to the following material contractswhich were not entered into in the ordinary course of business withinthe two years immediately preceding the date of this document, whichmay contain provisions under which we or any of our subsidiaries haveobligations or entitlements which are material to us and oursubsidiaries as at the date of this document:

(a) a sharepurchase agreement dated January 21, 2003 between us and Port ofHercules Trustees Limited, David Betsworth, Russell Webber, JeremyBridge, Brian Barton, Caroline Barton, Bruce Rose, Andrew Monk, PeterAnthony Wade and 3i Group plc under which we acquired the whole of theissued share capital of Travelbag Holdings Limited for a purchaseconsideration of (pounds) 53.2 million. The vendors gave certainwarranties, their liability in respect of which is capped at (pounds)30 million. Part of the total consideration paid to the vendors was inthe form of shares issued by the Company as fully paid. The agreementalso contains certain restrictive covenants from the vendors in favorof the Company for a period of two years from the completion of theacquisition, which restricts certain employees of the vendor fromcarrying out in the United Kingdom or Australia any business similar tothat carried on by the acquired business.

(b) a bankingfacilities agreement dated January 21, 2003 between us and BarclaysBank plc ("Barclays") whereby Barclaysestablished a (pounds) 15,000,000 term loan, a (pounds) 10,000,000revolving credit facility and a (pounds) 10,000,000 guarantee facility,reduced to (pounds) 7,500,000 after three months. On September 26,2003, the guarantee facility was increased to (pounds) 10,750,000 andthe revolving credit facility was reduced to (pounds) 6,750,000. As ofDecember 31, 2003, the (pounds) 15,000,000 term loan was outstanding.The term loan is repayable in equal biannual installments with thefirst due on July 31, 2004 and the last due on January 31, 2008.Interest on the term loan and any amounts outstanding under therevolving credit facility is currently payable at a rate of LIBOR plus2.25% per year. This rate with respect to each facility reducesto 1.75% and 1.5% provided certain profit targets aremet. The facilities agreement requires compliance with certainfinancial covenants based on ratios of our indebtedness to earningsbefore interest and taxes ("EBIT"), our ratioof operating cash flow to debt service, our ratio of cash to tradecreditors, our net worth, our absolute EBIT and our absolute cash flow.The facilities agreement also requires compliance with certainoperating and other covenants which limit, among other things, theincurrence of additional indebtedness by us and our subsidiaries, salesof assets, mergers, distributions to shareholders, investments,acquisitions and grants of security interests. The facilities agreementprohibits the payment of dividends.

On August 18, 2003, Barclaysagreed to waive compliance with certain financial covenants and we andBarclays agreed to amend certain of the financial covenants containedin the facilities agreement. At that time, we also agreed not to borrowunder the revolving credit facility without Barclay's priorconsent. On October 30, 2003, Barclays agreed to waive compliance withcertain financial covenants, and we and Barclays plc agreed to furtheramendments to the covenants.

In 2004, we have entered into a newfacility within the £32.5 million Facility for £5.5 millionon substantially the same terms as the £15 million Term Loan,which was drawn down in March 2004. This is being used for workingcapital purposes.

See "Item 5. Operating andFinancial Review and Prospects — RecentDevelopments" for a discussion of other agreements weentered into after the period covered by this Annual Report.

10.D    Exchange Controls

There are currently no U.K.foreign exchange control restrictions on (1) the import or export ofcapital, including the availability of cash and cash equivalents foruse by us or (2) the payments of dividends, interest or otherdistributions to non-resident holders of our securities.

10.E    Taxation

The following is a summary of certainmaterial U.S. federal and U.K. tax consequences of the ownership anddisposition of ordinary shares or of ADSs evidenced by ADRs.

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This summary applies to you only if youare a U.S. Holder. You will be a U.S. Holder if you are a beneficialowner of ADSs or ordinary shares and youare:

|              |                                                                                |
|--------------|--------------------------------------------------------------------------------|
| •  | a citizen or resident of theUnited States for U.S. federal income taxpurposes; |

|              |                                                                                                                                                                                               |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | a corporation (or otherentity treated as a corporation for U.S. federal income tax purposes)created or organized under the laws of the United States or any Statewithin the United States; or |

|              |                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------|
| •  | otherwisesubject to U.S. federal income tax on a net income basis in respect ofthe ordinary shares or ADSs. |

United Kingdom TaxConsiderations

This discussion summarizes certain material U.K.tax consequences of the acquisition, ownership and disposition ofordinary shares or ADSs by you if you are not resident or ordinarilyresident in the United Kingdom for U.K. tax purposes.

You shouldconsult your own tax advisors as to the particular tax consequences toyou under U.K. laws of the acquisition, ownership and disposition ofordinary shares or ADSs.

Taxation of Dividends andDistributions

Under current U.K. taxation legislation, no taxis required to be withheld at source from cash dividend payments byebookers plc.

United Kingdom Taxation of Capital Gains

If you are not resident or ordinarily resident in the United Kingdomthen, subject to the comments below, you will not ordinarily be liablefor U.K. tax on capital gains realized on the disposal of an ordinaryshare or ADS for tax purposes unless, at the time of the disposal, youcarry on a trade, profession or vocation in the United Kingdom througha branch, agency or permanent establishment and the ordinary share orADS you dispose of is, or has been, held or acquired for the purposesof that trade or branch, agency or permanent establishment carried onby you in the United Kingdom.

If you are an individual and on orafter March 17, 1998 you have ceased to be resident or ordinarilyresident for tax purposes in the United Kingdom and continue not to beresident or ordinarily resident in the United Kingdom for a period ofless than five years of assessment and dispose of ordinary shares orADSs during that period, you may also be liable on your return to theUnited Kingdom to U.K. tax on capital gains realized on the disposalsubject to any available exemption or relief, notwithstanding that youare not resident or ordinarily resident in the United Kingdom at thetime of the disposal.

United Kingdom Inheritance Tax

Ordinary shares or ADSs are assets situated in the United Kingdomfor the purposes of U.K. inheritance tax. Subject to the discussion ofthe estate tax treaty in the next paragraph, if you are an individual,ordinary shares or ADSs beneficially owned by you will be subject toU.K. inheritance tax on your death or, in some circumstances, if theADSs are the subject of a lifetime gift made by you, including atransfer at less than full market value. U.K. inheritance tax is notgenerally chargeable on gifts to individuals or to some types ofsettlement provided such gift or settlement was made more than sevenyears before the death of the donor. Special rules apply to ordinaryshares or ADSs held in a settlement.

If you are an individualand your domicile is determined to be the United States for thepurposes of the estate and gift tax convention between the UnitedStates and the United Kingdom ("the estate taxtreaty") and you are not a national of the United Kingdom,an ordinary share or ADS held by you will not be subject to U.K.inheritance tax on your death or on a lifetime transfer by you of theordinary share or ADS except where the share or ADS:

71

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|              |                                                                                       |
|--------------|---------------------------------------------------------------------------------------|
| •  | is part of thebusiness property of a U.K. permanent establishment of an enterprise,or |

|              |                                                                                                         |
|--------------|---------------------------------------------------------------------------------------------------------|
| •  | pertains to a U.K. fixed base of anindividual used for the performance of independent personalservices. |

The estate tax treaty generally provides a creditagainst U.S. federal tax liability for the amount of any tax paid inthe U.K. in a case where the ordinary share or ADS is subject both toU.K. inheritance tax and to U.S. federal estate or gift tax.

United Kingdom Stamp Duty and Stamp Duty Reserve Tax("SDRT")

U.K. stamp duty and/or SDRTwill, subject to specific exceptions, be payable on the issue ortransfer of ordinary shares:

|              |                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------|
| •  | to, or toa nominee or agent for, a person whose business is or includes theprovision of clearance services or |

|              |                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------|
| •  | to,or to a nominee or agent for, a person whose business is or includesissuing depositary receipts. |

In such case, the applicable rateof stamp duty and/or SDRT will be 1.5 percent, rounded up to thenearest £5, of the amount or value of any consideration given forthe ordinary shares or, in certain circumstances, the value of theordinary shares or in the case of an issue to such persons, the issueprice of the ordinary shares.

The 1.5% charge will applyto transfers of ordinary shares to the custodian for deposits under theADSs deposit agreement. In accordance with the terms of the ADS depositagreement, any tax or duty payable by the custodian or its nominees oragents on any transfers of ordinary shares to them will be charged bythe custodian to the party to whom the corresponding ADSs aredelivered.

In practice, no U.K. stamp duty will be payable on atransfer of an ADS, or on a transfer of the beneficial ownership of anADS, provided that the relevant instrument of transfer or writtenagreement to transfer is not executed in or brought into the U.K. Anagreement to transfer an ADS, or the beneficial ownership of an ADSwill not give rise to SDRT. On a transfer of ordinary shares from thecustodian to a holder of an ADR upon cancellation of the ADS, a fixedstamp duty of £5 per instrument of transfer will be payable. Anytransfer for value of the underlying ordinary shares represented byADSs or agreement to transfer these underlying ordinary shares may giverise to a liability on the transferee to stamp duty or SDRT.

NoU.K. stamp duty and, except as described above, no SDRT will be payableon the issue of ordinary shares by ebookers plc.

Subject tocertain exceptions, a transfer on sale of ordinary shares will attractad valorem U.K. stamp duty at the rate of 0.5 percent (roundedup to the nearest multiple of £5) of the amount or value of theconsideration for the transfer. Generally, ad valorem stamp dutyapplies neither to gifts nor on a transfer from a nominee to thebeneficial owner, although in cases of transfers where no ad valoremstamp duty arises, a fixed U.K. stamp duty of £5 may bepayable. SDRT at a rate of 0.5 percent of the amount or value of theconsideration for the transfer may be payable on an unconditionalagreement to transfer ordinary shares. If within six years of the dateof the agreement or, if the agreement was conditional, the date theagreement became unconditional, an instrument transferring the ordinaryshares is executed and stamped, any SDRT paid may be repaid or, if ithas not been paid the liability to pay the SDRT, but not necessarilyinterest and penalties, would be cancelled. SDRT is chargeable whetherthe agreement is made or effected in the United Kingdom or elsewhereand whether or not any party is resident or situated in any part of theUnited Kingdom. SDRT is generally a liability of the purchaser andstamp duty is normally paid by the purchaser.

United StatesFederal Income Taxation

This discussion summarizes certainmaterial U.S. federal income tax consequences of the acquisition,ownership and disposition of ordinary shares and ADSs.

Thissummary applies only to U.S. Holders (as defined above) that will holdordinary shares or ADSs as capital assets. This summary is based uponUnited States tax laws, including the United 

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States Internal Revenue Code of 1986, asamended (the "Code"), final, temporary andproposed Treasury Regulations, rulings, judicial decisions,administrative pronouncements, the Convention Between the United Statesof America and the Government of the United Kingdom of Great Britainand Northern Ireland for the Avoidance of Double Taxation and thePrevention of Fiscal Evasion With Respect to Taxes on Income and onCapital Gains, signed July 24, 2001 together with a related Protocol(the "U.S.-U.K. income tax treaty"), all ascurrently in effect, and all of which are subject to change or changesin interpretation, possibly with retroactive effect.

Thissummary assumes that each obligation provided for in, or otherwisecontemplated by, the deposit agreement and any related agreement willbe performed in accordance with its respective terms.

Thefollowing summary is of a general nature and does not address all U.S.federal income tax consequences that may be relevant to you in light ofyour particular situation. For example, this summary does not applyto:

|              |                                                                                                  |
|--------------|--------------------------------------------------------------------------------------------------|
| •  | persons that own, directly orindirectly, 10 percent or more of our share capital or votingstock, |

|              |                  |
|--------------|------------------|
| •  | U.S.expatriates, |

|              |        |
|--------------|--------|
| •  | banks, |

|              |                        |
|--------------|------------------------|
| •  | financialinstitutions, |

|              |                      |
|--------------|----------------------|
| •  | insurance companies, |

|              |                                                |
|--------------|------------------------------------------------|
| •  | persons liable for the alternative minimumtax, |

|              |                                                               |
|--------------|---------------------------------------------------------------|
| •  | individual retirement accountsand other tax-deferredaccounts, |

|              |                                |
|--------------|--------------------------------|
| •  | regulated investmentcompanies, |

|              |                          |
|--------------|--------------------------|
| •  | tax-exemptorganizations, |

|              |                                     |
|--------------|-------------------------------------|
| •  | dealers in securitiesor currencies, |

|              |                                                                                                                                   |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------|
| •  | persons who acquiredtheir ordinary shares or ADSs pursuant to the exercise of employeestock options or otherwise as compensation, |

|              |                                                                                                                                                       |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | persons that hold ordinary shares or ADSsas part of straddles, hedging transactions or conversion transactionsfor U.S. federal income tax purposes,or |

|              |                                                          |
|--------------|----------------------------------------------------------|
| •  | persons whose functional currency isnot the U.S. dollar. |

If a partnership holds ordinary shares orADSs, the tax treatment of a partner generally will depend upon thestatus of the partner and the activities of the partnership. If you area partner in a partnership that holds ordinary shares or ADSs, you areurged to consult your own tax advisor regarding the specific taxconsequences of acquiring, owning and disposing of the ordinary sharesor ADSs.

The summary of U.S. federal income tax consequencesset out below is for general information only. You should consult yourown tax advisors as to the particular tax consequences to you ofacquiring, owning and disposing of the ordinary shares or ADSs,including your eligibility for the benefits of the U.K.-U.S. income taxtreaty, and the applicability and effect of state, local, foreign andother tax laws and possible changes in tax law.

U.S.Holders of ADSs

For U.S. federal income tax purposes, an ownerof ADSs will be treated as the owner of the corresponding number ofunderlying ordinary shares held by the depositary, and references toordinary shares in the following discussion refer also to ADSs.

Taxation of Dividends

We have never paid cash dividends toour shareholders and we currently do not anticipate paying dividendsfor the foreseeable future. If we were to pay a dividend, you generallywould be subject to 

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tax on these dividends as foreign sourcedividend income to the extent they were paid out of our current oraccumulated earnings and profits, as determined for U.S. federal incometax purposes, and would not be eligible for the dividends receiveddeduction allowed to corporations. Any dividends that exceed ourcurrent and accumulated earnings and profits would be treated as anon-taxable return of capital to the extent of your basis in theordinary shares or ADSs and thereafter as capital gain. We do notcurrently intend to calculate our earnings and profits in accordancewith U.S. federal income tax principles and as a result, distributionspaid by us generally will be treated as dividends.

Pursuant torecently enacted legislation, dividends that meet certain requirementsand that are paid to individual holders and certain trusts and estatesare eligible for reduced rates of taxation. If we pay a dividend in thefuture, we will notify you as to the eligibility of our dividends forthese reduced rates.

The amount of any distribution paid inforeign currency will be included in your gross income in an amountequal to the U.S. dollar value of the foreign currency receivedcalculated by reference to the spot rate in effect on the date youactually or constructively receive it (in the case of ordinary shares)or the date of receipt by the depositary (in the case of ADSs),regardless of whether the foreign currency is converted into U.S.dollars at that time. If the foreign currency is converted into U.S.dollars on the date of receipt, you generally should not be required torecognize foreign currency gain or loss in respect of the distribution.If the foreign currency received in the distribution is not convertedinto U.S. dollars on the date of receipt, you generally will have abasis in the foreign currency equal to its U.S. dollar value on thedate of receipt. Any gain or loss recognized upon a subsequentconversion or other disposition of the foreign currency will be treatedas U.S. source ordinary income or loss.

Generally, dividenddistributions paid by us on our ordinary shares or ADSs will constituteforeign source "passive income" or, in thecase of certain U.S. Holders, "financial servicesincome," for purposes of computing allowable foreign taxcredits for US tax purposes. The rules relating to the determination ofthe U.S. foreign tax credit are complex and you should consult your owntax advisor regarding the rules surrounding the foreign tax credit.

Taxation of Capital Gains

Upon a sale or other dispositionof ADSs or ordinary shares you will generally recognize U.S. sourcecapital gain or loss for U.S. federal income tax purposes equal to thedifference between the amount realized and your adjusted tax basis inthe ADSs or ordinary shares. This capital gain or loss will belong-term capital gain or loss if your holding period in the ADSs orordinary shares exceeds one year. Gains realized by individualsgenerally will be subject to U.S. federal income tax at preferentialrates if specified minimum holding periods are met. The deductibilityof capital losses is subject to significant limitations.

Deposits and withdrawals of ordinary shares by you in exchange forADSs should not result in the realization of gain or loss for U.S.federal income tax purposes.

Passive Foreign Investment CompanyConsiderations

A foreign corporation will be a PFIC in anytaxable year in which either (i) at least 75% of its grossincome is "passive income" or (ii) at least50% of the average value of its assets is attributable to assetswhich produce "passive income" or are heldfor the production of "passive income".Passive income for this purpose generally includes dividends, interest,royalties, rents and gains from certain commodities and securitiestransactions. We currently believe that we were not a PFIC for U.S.federal income tax purposes for the year ended December 31, 2003.However, this is a factual determination that depends upon thecomposition of our income and assets and the market value of ourordinary shares and ADSs from time to time and is subject to change.Therefore, there can be no assurance that we will not be considered aPFIC for any taxable year. If we determine we are a PFIC in a futureyear we will notify you in our Form 20-F for that year.

If weare treated as a PFIC for any taxable year during which you heldordinary shares or ADSs, certain adverse consequences could apply toyou. Gains recognized on a sale or other disposition of 

74

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the ordinary shares or ADSs would beallocated ratably over your holding period for the ordinary shares orADSs. The amount allocated to the taxable year of the sale or otherexchange and to any year before we became a PFIC would be taxed asordinary income. The amount allocated to each other taxable year wouldbe subject to tax at the highest rate in effect for individuals orcorporations, as appropriate, and an interest charge would be imposedon the amount allocated to such taxable year. Further, any distributionin respect of ordinary shares or ADSs in excess of 125% of theaverage of the annual distributions on ordinary shares or ADSs receivedby you during the preceding three years or your holding period,whichever is shorter, would be subject to taxation as described above.Certain elections may be available to you that may mitigate some of theadverse consequences resulting from PFIC status. However, regardless ofwhether such elections are made, dividends paid by a PFIC will not be"qualified dividend income" for the purposesof recent US legislation and will be taxed at the higher ratesapplicable to other items of ordinary income.

If we areconsidered a PFIC, you must make an annual return on U.S. InternalRevenue Service Form 8621. You should consult your own tax advisorsregarding the potential application of the PFIC rules to your ownershipof our ordinary shares or ADSs.

U.S. Information Reporting andBackup Withholding

Dividend payments and proceeds from thesale, exchange or redemption of ordinary shares or ADSs may be subjectto information reporting to the Internal Revenue Service and possibleU.S. backup withholding at a current rate of 28%. Backupwithholding will not apply to a Holder who furnishes a correct taxpayeridentification number or certificate of foreign status and makes anyother required certification or who is otherwise exempt from backupwithholding. U.S. persons who are required to establish their exemptstatus generally must provide such certification on a duly completedInternal Revenue Service Form W-9 (Request for Taxpayer IdentificationNumber and Certification). Non-U.S. holders generally will not besubject to U.S. information reporting or backup withholding. However,such holders may be required to provide certification of non-U.S.status (generally on Internal Revenue Service Form W-8BEN) inconnection with payments received in the United States or throughcertain U.S.-related financial intermediaries.

Backupwithholding is not an additional tax. Amounts withheld as backupwithholding may be credited against a holder's U.S. federalincome tax liability, and a holder may obtain a refund of any excessamounts withheld under the backup withholding rules by filing theappropriate claim for refund with the Internal Revenue Service andfurnishing any required information.

10.F    Dividends andPaying Agents

Not applicable.

10.G    Statement byExperts

Not applicable.

10.H    Documents onDisplay

Copies of the documents filed as exhibits to thisAnnual Report may be viewed at 25 Farringdon Street, London, EC4A 4AB,England during normal business hours on any weekday (Saturdays, Sundaysand public holidays in the United Kingdom excepted). You may also readand copy any document we file with the SEC at the SEC's regionaloffices at 233 Broadway, New York, New York 10279 and 175 West JacksonBoulevard, Suite 900, Chicago, Illinois 60604. Please call the SEC at1-800-SEC-0330 for more information on the public reference rooms andtheir copy charges. Our filings may also be obtained electronically viathe EDGAR system on the website maintained by the SEC athttp://www.sec/gov.

10.I    Subsidiary Information

Not applicable.

75

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ITEM 11.    QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed tomarket risks from changes in foreign currency exchange rates andinterest rates. We monitor and manage these risks as an integral partof our overall risk management program, which recognizes theunpredictability of financial markets and seeks to reduce theirpotentially adverse effects on our results.

To reduce ourcurrency translation risks we selectively enter into foreign currencyforward agreements. We do not use financial instruments for trading orspeculative purposes.

Interest rate risk

We are exposedto interest rate risk primarily connected to our floating rateborrowings. In addition, cash balance is in excess of its debt and itsnet cash is invested in interest products, some of which is invested atvariable rates, which inevitably makes it prone to changes in interestrates.

The amount of our borrowings that will be subject tofloating interest rates over the next twelve months amounted to£15,162,000 at December 31, 2003 and £434,000 at December31,2002. Fixed rate borrowings, relating entirely to capital leases,amounted to 19% of our total borrowings at December 31, 2003 and31.5% of our total borrowings at December 31, 2002.

Theamount of cash invested in variable rate interest products amounted to£50,461,000 at December 31, 2003 and £21,729,000 atDecember 31, 2002.

A hypothetical 100-basis point increase inthe interest rates associated with our floating rate borrowings andfloating rate cash investments, as at December 31, 2003 would increaseour net income by £518,000 (2002: increase net income by£647,000).

Foreign currency risks

We publish ourconsolidated financial statements in pounds sterling, which is ourfunctional currency. In 2003, approximately 78 percent of our revenuewas recorded in pounds sterling, as compared to approximately 68percent in 2002, and a majority of the remaining transactions weredenominated in Euros. Non-sterling purchases and expenses representedapproximately 16 percent of our operating expenses (excludingdepreciation and stock compensation expense) in 2003, as compared to 28percent in 2002.

In the past we have not purchased anysignificant currency to hedge our exchange rate risk. However, with theacquisition of the Travelbag Group, we now have some purchasetransactions between our subsidiaries and our third party suppliersthat are subject to exchange rate risk. We reduce such exchange raterisks by entering into forward contracts, with terms of generally lessthan one year, to purchase U.S. dollars, Singapore dollars and HongKong dollars. We do not enter into foreign currency transactions forspeculative purposes.

At December 31, 2003 our outstandingforward contracts showed a fall in their fair market value amounting to£236,000 from the inception of the contracts. This fall in fairmarket value has been recorded as cost in arriving at our net incomefor the year, and as a current liability in our consolidated balancesheets.

A strengthening of the pound sterling against the euroor other worldwide currencies would reduce our reported revenue and netincome. A hypothetical 10 percent strengthening of the pound againstall currencies (using average exchange rates) in which our net incomeis denominated would, for the year ended December 31, 2003, reduce ourrevenues and net income by £1,221,000 (2002: £960,000) and£158,000 (2002: £143,000), respectively. Likewise, ahypothetical 10 percent weakening of the pound against all currencieswould increase our revenues and net income by £1,493,000 (2002:£1,174,000) and £194,000 (2002: £172,000),respectively.

Credit Risk

Financial instruments, whichpotentially subject us to concentrations of credit risk, consistprimarily of cash at bank and in hand, trade accounts receivable, andforeign exchange contracts. We 

76

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mitigate such risks by holding funds inhigh-quality financial institutions, limiting counterparties to foreignexchange contracts to qualified financial institutions, and through thenature of our business — tickets for travel are ordinarily paidin full before they are issued; our exposure on trade accountsreceivable relates almost entirely to incentive payments receivablefrom our suppliers.

ITEM 12.    DESCRIPTION OF SECURITIESOTHER THAN EQUITY SECURITIES

Notapplicable.

77

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PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OFSECURITY HOLDERS AND                      USE OFPROCEEDS

None.

ITEM 15.    CONTROLS ANDPROCEDURES

Our chief executive officer and chief financialofficer, after evaluating the effectiveness of our disclosure controlsand procedures (as defined in Exchange Act Rule 13a-15(e)) as of theend of the period covered by this Form 20-F, have concluded that, as ofsuch date, our disclosure controls and procedures were effective toensure that material information relating to our company was made knownto them by others within the company.

There were no changes toour internal control over financial reporting that occurred during theperiod covered by this Form 20-F that have materially affected, or arereasonably likely to materially affect, our internal control overfinancial reporting.

ITEM 16 A.    AUDIT COMMITTEE FINANCIALEXPERT

Our Board has determined that we do not have an"audit committee financial expert" serving onour audit committee as defined by the SEC, as none of our auditcommittee members have the familiarity with U.S. GAAP required by theSEC, which is the GAAP of the financial statements included in thisAnnual Report. Our audit committee benefits from the financialexpertise of Mr. David Gill, who was appointed chairman of thecommittee on April 30, 2003 and who previously served as FinanceDirector of Manchester United plc, First Choice Holidays plc, the touroperator, and Proudfoot plc, the worldwide management consultancy. Mr.Gill has extensive knowledge of U.K. GAAP, pursuant to which we alsoprepare financial statements. The Board believes that Mr. Gill and theother members of our audit committee have the relevant experience thatwill enable them to diligently and zealously question management andour external auditor about our financial statements.

ITEM 16B.    CODE OF ETHICS

We have adopted a code of ethics for ourChief Executive Officer and principal financial officers. This documentis accessible on our internet website at www.ebookers.com.

ITEM16 C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The followingtable summarizes the aggregate fees billed to ebookers by Deloitte& Touche LLP("Deloitte"):

|                       |  |                       |         |        |  |        |         |        |  |  |
|-----------------------|--|-----------------------|---------|--------|--|--------|---------|--------|--|--|
|                  |  | 2003                  |         | 2002   |
|                  |  | (£in thousands) |
| Audit Fees(a)         |  |                  | 372     |   |  |   | 295     |   |
| Audit-Related Fees(b) |  |                  | 576     |   |  |   | — |   |
| Tax Fees(c)           |  |                  | 180     |   |  |   | 50      |   |
| All Other Fees(d)     |  |                  | — |   |  |   | — |   |
| Total                 |  |                  | 1,128   |   |  |   | 345     |   |
|                       |

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(a)   Audit Fees

Fees for audit services billed in 2003 consisted of audit of theGroup's annual financial statements and limited procedures inconnection with the Group's quarterly financialstatements.

Fees for audit services billed in 2002 consisted ofaudit of the Group's annual financial statements and limitedprocedures in connection with the Group's quarterly financialstatements.

(b)   Audit Related Fees

Fees for audit-related services billed in 2003 consisted of duediligence and stock exchange related reporting procedures in connectionwith the Group's acquisition ofTravelbag.

(c)   Tax Fees

Fees for taxplanning and advisory services totalled £0.2 million in 2003 and£0.1 million in 2002. Tax services are services rendered withrespect to proposed transactions or that alter a transaction to obtaina particular tax result. Such services consisted of tax advice relatedto structuring certain proposed mergers, acquisitions and disposals,tax advice related to the alteration of employee benefit plans, and taxadvice related to an intra-group restructuring.

(d)   All other Fees

None.

(e)   Audit committee's pre-approval policiesand procedures

The Audit Committee of ebookers' Boardof Directors is responsible, among other matters, for the oversight ofthe external auditor. The Audit Committee has adopted a policyregarding pre-approval of audit and permissible non-audit servicesprovided by our independent auditors (the"Policy").

Under the Policy, proposedservices either (i) may be pre-approved by the Audit Committee withoutconsideration of specific case-by-case services ("generalpre-approval"); or (ii) require the specific approval ofthe Audit Committee ("specificpre-approval"). The Policy sets out the audit,audit-related, tax and other services that have received the generalpre-approval of the Audit Committee; these services are subject toannual review by the Audit Committee. All other audit, audit-related,tax and other services must receive a specific pre-approval from theAudit Committee.

The responsibility for ensuring that ourindependent auditors are engaged to perform only those services thatare compatible with maintaining the auditor's independence fromus rests with our auditors, our Chief Financial Officer and the AuditCommittee. Annually, we will prepare a summary of the fees paid to theindependent auditors for audit, audit-related, tax and other servicesfor inclusion in the Annual Report.

79

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PART III

ITEM 17.    FINANCIALSTATEMENTS

Not applicable.

ITEM 18.    FINANCIALSTATEMENTS

The following audited financial statements andrelated schedules, together with the report of Deloitte & ToucheLLP thereon, are filed as part of this AnnualReport:

|                                                                                                 |  |        |     |        |  |  |
|-------------------------------------------------------------------------------------------------|--|--------|-----|--------|--|--|
|                                                                                            |  | Page   |
| IndependentAuditors'Report                                                                      |  |   | F-2 |   |
| ConsolidatedBalance Sheets as at December 31, 2003 and2002                                      |  |   | F-3 |   |
| ConsolidatedStatements of Operations for the years ended December 31, 2003, 2002and2001         |  |   | F-4 |   |
| ConsolidatedStatements of Cash Flows for the years ended December 31, 2003, 2002and2001         |  |   | F-5 |   |
| ConsolidatedStatements of Comprehensive Loss for the years ended December 31, 2003,2002 and2001 |  |   | F-6 |   |
| ConsolidatedStatements of Shareholders' Equity as of December 31, 2003, 2002and 2001            |  |   | F-7 |   |
| Notes tothe Consolidated FinancialStatements                                                    |  |   | F-8 |   |
|                                                                                                 |

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ITEM 19    EXHIBITS

Thefollowing exhibits are filed as part of this AnnualReport:

|               |  |                                                                                                                                                                                                                       |  |  |  |  |
|---------------|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description                                                                                                                                                                                                           |
| 1.1*          |  | Memorandum and Articles ofIncorporation of theRegistrant.                                                                                                                                                             |
| 4.1+          |  | SharePurchase Agreement dated March 27, 2001 for the purchase of the entireshare capital of MrJet AB among ebookers plc, External Laboratory forAwesome Business AB (E-Lab), Hördur Benderand Alben HoldingsS.A. |
| 4.2*          |  | Form ofRegistration Rights Agreement between ebookers plc, FlightbookersS.A.R.L., Dinesh Dhamija and TaniDhamija.                                                                                                     |
| 4.3**         |  | OptionAgreement dated October 2, 2002 between ebookers plc and DineshDhamija.                                                                                                                                         |
| 4.4*          |  | OptionAgreement dated October 21, 1999 between ebookers plc and SanjivTalwar.                                                                                                                                         |
| 4.5***        |  | Amendedand restated form of rules of the ebookers.com plc Executive ShareOption Scheme 1999 to reflect amendments in January, July and August2003.                                                                    |
| 4.6**         |  | ServiceAgreement October 2, 2002 between ebookers plc and Mr. DineshDhamija.                                                                                                                                          |
| 4.7+          |  | Contractof Employment dated March 3, 1999 between ebookers plc and Dr.SanjivTalwar                                                                                                                                    |
| 4.8**         |  | CompromiseAgreement dated May 31, 2002 between ebookers plc and Mr. NavneetBali.                                                                                                                                      |
| 4.9**         |  | Letter ofAppointment as a Non-Executive Director dated July 12, 2002 betweenebookers plc and Mr. SudhirChoudhrie.                                                                                                     |
| 4.10**        |  | Letterof Appointment as a Non-Executive Director dated July 12, 2002 betweenebookers plc and Mr. JeffreySampler.                                                                                                      |
| 4.11**        |  | Letterof Appointment as a Non-Executive Director dated July 24, 2002 betweenebookers plc and Mr. JohnDonaldson.                                                                                                       |
| 4.12**        |  | Letterof Appointment as a Non-Executive Director dated April 7, 2003 betweenebookers plc and DavidGill.                                                                                                               |
| 4.13**        |  | CompromiseAgreement dated January 20, 2003 between ebookers plc and Dr.SanjivTalwar.                                                                                                                                  |
| 4.14**        |  | SharePurchase Agreement relating to the sale and purchase of the whole ofthe issued share capital of Travelbag Holdings Limited dated January21,2003.                                                                 |
| 4.15**        |  | FacilitiesAgreement between ebookers plc as the principal borrower and BarclaysBank plc as bank dated January 21,2003.                                                                                                |
| 4.16***       |  | Supplementto the Facilities Agreement dated January 21,2003.                                                                                                                                                          |
| 4.17***       |  | SupplementalLetter to the Facilities Agreement dated June 18,2003.                                                                                                                                                    |
| 4.18***       |  | Amendmentto the Facilities Agreement dated August 18,2003.                                                                                                                                                            |
| 4.19***       |  | SupplementalLetter to the Facilities Agreement dated August 18,2003.                                                                                                                                                  |
| 4.20***       |  | Amendmentto the Facilities Agreement dated October 30,2003.                                                                                                                                                           |
|               |

81

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|               |  |                                                                                        |  |  |  |  |
|---------------|--|----------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description                                                                            |
| 4.21***       |  | Amendmentto the Facilities Agreement dated March 10,2004.                              |
| 4.22+         |  | RelationshipAgreement dated March 19, 2001 between ebookers plc and Mr. DineshDhamija. |
| 4.23++        |  | ServiceAgreement dated May 31, 2002 between ebookers plc and Mr. Nigel AddisonSmith.   |
| 4.24**        |  | ServiceAgreement dated January 16, 2003 between ebookers plc and Mrs. TaniDhamija.     |
| 4.25**        |  | ServiceAgreement dated January 17, 2003 between ebookers plc and Mr. PeterLiney.       |
| 6.1**         |  | Calculationof earnings per ordinary share andADR.                                      |
| 8.1****       |  | List ofsubsidiaries.                                                                   |
| 12.1***       |  | Certificationof the CEO pursuant to Section 302 of the Sarbanes-Oxley Act2002.         |
| 12.2***       |  | Certificationof the CFO pursuant to Section 302 of the Sarbanes-Oxley Act2002.         |
| 13.1***       |  | Certificationof the CEO pursuant to Section 906 of the Sarbanes-Oxley Act2002.         |
| 13.2***       |  | Certificationof the CFO pursuant to Section 906 of the Sarbanes-Oxley Act2002.         |
|               |

| * | Previouslyfiled as an exhibit to registration statement no. 333-11062 on Form F-1of ebookers plc, relating to the registration of 3,939,661 ordinaryshares, par value £0.28 each, of ebookers plc and incorporatedherein by reference. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| + | Previously filed as an exhibit tothe annual report for the year ended December 31, 2000 on Form 20-F andincorporated by reference. |
|---|------------------------------------------------------------------------------------------------------------------------------------|

| ++ | Previously filed as an exhibitto the annual report for the year ended December 31, 2001 on Form 20-Fand incorporated by reference. |
|----|------------------------------------------------------------------------------------------------------------------------------------|

| ** | Previously filed as an exhibitto the annual report for the year ended December 31, 2002 on form 20-Fand incorporated by reference. |
|----|------------------------------------------------------------------------------------------------------------------------------------|

| *** | Filed herewith. |
|-----|-----------------|

| **** | See Item 4.C OrganizationalStructure. |
|------|---------------------------------------|

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SIGNATURES

The registrant herebycertifies that it meets all of the requirements for filing on Form 20-Fand that it has duly caused and authorized the undersigned to sign thisannual report on its behalf.

Dated:    March 25,2004

**ebookers plc**

By:       /s/ DineshDhamija                    

Name:    Dinesh Dhamija

Title:       Chief ExecutiveOfficer

83

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INDEXTO CONSOLIDATED FINANCIALSTATEMENTS

|                                                                                                  |  |        |     |        |  |  |
|--------------------------------------------------------------------------------------------------|--|--------|-----|--------|--|--|
|                                                                                             |  | Page   |
| IndependentAuditors' Report                                                                      |  |   | F-2 |   |
| ConsolidatedBalance Sheets as at December 31, 2003 and2002                                       |  |   | F-3 |   |
| Consolidated Statements ofOperations for the years ended December 31, 2003, 2002 and2001         |  |   | F-4 |   |
| Consolidated Statements of CashFlows for the years ended December 31, 2003, 2002 and2001         |  |   | F-5 |   |
| Consolidated Statements ofComprehensive Loss for the years ended December 31, 2003, 2002 and2001 |  |   | F-6 |   |
| Consolidated Statements ofShareholders' Equity as of December 31, 2003, 2002 and2001             |  |   | F-7 |   |
| Notes to the Consolidated FinancialStatements                                                    |  |   | F-8 |   |
|                                                                                                  |

F-1

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INDEPENDENT AUDITORS' REPORT

To the Directors and Shareholders of ebookers plc

We haveaudited the accompanying consolidated balance sheets of ebookers plcand its subsidiaries ("the Group") as ofDecember 31, 2003 and 2002 and the related consolidated statements ofoperations, cash flows, comprehensive loss and shareholders'equity for each of the three years in the period ended December 31,2003, all expressed in pounds sterling. These financial statements arethe responsibility of ebookers plc's management. Ourresponsibility is to express an opinion on these financial statementsbased on our audits.

We conducted our audits in accordance withauditing standards generally accepted in the United States of America.Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

Inour opinion, such consolidated financial statements present fairly, inall material respects, the consolidated financial position of the Groupas of December 31, 2003 and 2002, and the results of its operations andits cash flows for each of the three years in the period ended December31, 2003 in conformity with accounting principles generally accepted inthe United States of America.

Our audits also comprehended thetranslation of pounds sterling amounts into U.S. dollar amounts and, inour opinion, such translation has been made in conformity with thebasis stated in Note 2. Such U.S. dollar amounts are presented solelyfor the convenience of readers in the United States of America.

DELOITTE & TOUCHE LLP

London, England March 19,2004

F-2

----

EBOOKERSPLC CONSOLIDATED BALANCESHEETS

|                                                                                                                                                                                     |  |             |          |             |  |             |         |         |  |        |         |         |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-------------|----------|-------------|--|-------------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                                                                                                                |  | December31, |
|                                                                                                                                                                                |  | 2003        |          | 2003        |  | 2002        |
|                                                                                                                                                                                |  | US$'000     |          | £'000 |  | £'000 |
| **ASSETS**                                                                                                                                                                          |  |        |     |        |  |        |    |    |  |   |    |    |
| Currentassets:                                                                                                                                                                      |  |        |     |        |  |        |    |    |  |   |    |    |
|     Cash andcashequivalents                                                                                                                                     |  |        | 88,568   |        |  |        | 49,640  |    |  |   | 18,245  |    |
| Restrictedcash                                                                                                                                                                      |  |        | 1,465    |        |  |        | 821     |    |  |   | 3,484   |    |
| Accountsreceivable, net of allowance for doubtful accountsof                                                                                                                        |  |        |     |        |  |        |    |    |  |   |    |    |
| £446,000at 12/31/03 and £1,070,000 at12/31/02                                                                                                                           |  |        | 3,641    |        |  |        | 2,041   |    |  |   | 1,327   |    |
| Prepaidexpenses                                                                                                                                                                     |  |        | 14,377   |        |  |        | 8,058   |    |  |   | 2,406   |    |
| Othercurrentassets                                                                                                                                                                  |  |        | 7,016    |        |  |        | 3,931   |    |  |   | 2,417   |    |
| Totalcurrentassets                                                                                                                                                                  |  |        | 115,067  |        |  |        | 64,491  |    |  |   | 27,879  |    |
| Property,plant and equipment,net                                                                                                                                                    |  |        | 28,712   |        |  |        | 16,089  |    |  |   | 3,498   |    |
| Othernon-currentassets                                                                                                                                                              |  |        | 1,645    |        |  |        | 926     |    |  |   | 318     |    |
| Goodwill                                                                                                                                                                            |  |        | 70,973   |        |  |        | 39,779  |    |  |   | 12,675  |    |
| Otherintangibleassets                                                                                                                                                               |  |        | 60,663   |        |  |        | 34,000  |    |  |   | — |    |
| **TOTALASSETS**                                                                                                                                                                     |  |        | 277,060  |        |  |        | 155,285 |    |  |   | 44,370  |    |
| **LIABILITIESAND SHAREHOLDERS'EQUITY**                                                                                                                                              |  |        |     |        |  |        |    |    |  |   |    |    |
| Currentliabilities:                                                                                                                                                                 |  |        |     |        |  |        |    |    |  |   |    |    |
| Bankoverdraft                                                                                                                                                                       |  |        | —  |        |  |        | — |    |  |   | 434     |    |
| Accountspayable                                                                                                                                                                     |  |        | 84,899   |        |  |        | 47,584  |    |  |   | 17,167  |    |
| Accruedreservationsliability                                                                                                                                                        |  |        | 9,986    |        |  |        | 5,597   |    |  |   | 4,073   |    |
| Accruedexpenses and other currentliabilities                                                                                                                                        |  |        | 26,629   |        |  |        | 14,925  |    |  |   | 6,003   |    |
| Totalcurrentliabilities                                                                                                                                                             |  |        | 121,514  |        |  |        | 68,106  |    |  |   | 27,677  |    |
| Deferredincometaxes                                                                                                                                                                 |  |        | 18,199   |        |  |        | 10,200  |    |  |   | — |    |
| Otherlong termliabilities                                                                                                                                                           |  |        | 31,773   |        |  |        | 17,808  |    |  |   | — |    |
| Totallong-termliabilities                                                                                                                                                           |  |        | 49,972   |        |  |        | 28,008  |    |  |   | — |    |
| Commitmentsand contingencies (Note15)                                                                                                                                               |  |        |     |        |  |        |    |    |  |   |    |    |
| Shareholders'equity:                                                                                                                                                                |  |        |     |        |  |        |    |    |  |   |    |    |
| Ordinary shares£0.14 par value; Authorized: 104,544,211 shares at 12/31/03 and71,428,570 at 12/31/02: Issued and outstanding: 64,931,348 at 12/31/03and 50,061,736 at12/31/02 |  |        | 16,219   |        |  |        | 9,090   |    |  |   | 7,009   |    |
| Additionalpaid incapital                                                                                                                                                            |  |        | 244,806  |        |  |        | 137,207 |    |  |   | 89,877  |    |
| Accumulateddeficit                                                                                                                                                                  |  |        | (154,846 | )      |  |        | (86,787 | )  |  |   | (79,861 | )  |
| Minorityinterest                                                                                                                                                                    |  |        | 228      |        |  |        | 128     |    |  |   | — |    |
| Accumulatedother comprehensiveloss                                                                                                                                                  |  |        | (833     | )      |  |        | (467    | )  |  |   | (332    | )  |
| **Totalshareholders'equity**                                                                                                                                                        |  |        | 105,574  |        |  |        | 59,171  |    |  |   | 16,693  |    |
| **TOTALLIABILITIES AND SHAREHOLDERS'EQUITY**                                                                                                                                        |  |        | 277,060  |        |  |        | 155,285 |    |  |   | 44,370  |    |
|                                                                                                                                                                                |  |        |     |        |  |        |    |    |  |   |    |    |
|                                                                                                                                                                                     |

Seenotes to the consolidated financial statements.

F-3

----

EBOOKERS PLC CONSOLIDATED STATEMENTSOFOPERATIONS

|                                                               |  |                       |         |             |  |             |        |             |  |         |         |         |  |         |         |         |  |  |
|---------------------------------------------------------------|--|-----------------------|---------|-------------|--|-------------|--------|-------------|--|---------|---------|---------|--|---------|---------|---------|--|--|
|                                                          |  | Yearended December31, |
|                                                          |  | 2003                  |         | 2003        |  | 2002        |        | 2001        |
|                                                          |  | US$'000               |         | £'000 |  | £'000 |        | £'000 |
| Revenue                                                       |  |                  |    |        |  |        |   |        |  |    |    |    |  |    |    |    |
| Merchantfare airline ticketrevenue                            |  |                  | 41,329  |        |  |        | 23,164 |        |  |    | 11,325  |    |  |    | 8,822   |    |
| Othertravel productrevenue                                    |  |                  | 75,417  |        |  |        | 42,270 |        |  |    | 20,807  |    |  |    | 10,743  |    |
| Totaltravelrevenue                                            |  |                  | 116,746 |        |  |        | 65,434 |        |  |    | 32,132  |    |  |    | 19,565  |    |
| Advertisingand other salesrevenue                             |  |                  | 1,875   |        |  |        | 1,051  |        |  |    | 447     |    |  |    | 170     |    |
| **Totalrevenue**                                              |  |                  | 118,621 |        |  |        | 66,485 |        |  |    | 32,579  |    |  |    | 19,735  |    |
| **Operatingexpenses:**                                        |  |                  |    |        |  |        |   |        |  |    |    |    |  |
| Marketingandsales                                             |  |                  | 62,335  |        |  |        | 34,937 |        |  |    | 16,529  |    |  |    | 19,297  |    |
| Generalandadministrative                                      |  |                  | 57,532  |        |  |        | 32,245 |        |  |    | 28,052  |    |  |    | 14,754  |    |
| Depreciationandamortization                                   |  |                  | 7,689   |        |  |        | 4,310  |        |  |    | 4,546   |    |  |    | 8,639   |    |
| Producttechnology anddevelopment                              |  |                  | 8,504   |        |  |        | 4,766  |        |  |    | 3,117   |    |  |    | 2,589   |    |
| **Totaloperatingexpenses**                                    |  |                  | 136,060 |        |  |        | 76,258 |        |  |    | 52,244  |    |  |    | 45,279  |    |
| **Operatingloss**                                             |  |                  | (17,439 | )      |  |        | (9,773 | )      |  |    | (19,665 | )  |  |    | (25,544 | )  |
| Otherincome                                                   |  |
| Interestincome                                                |  |                  | 2,670   |        |  |        | 1,496  |        |  |    | 872     |    |  |    | 1,128   |    |
| Other                                                         |  |                  | 5,067   |        |  |        | 2,840  |        |  |    | 130     |    |  |    | — |    |
|                                                          |  |                  | 7,737   |        |  |        | 4,336  |        |  |    | 1,002   |    |  |    | 1,128   |    |
| Otherexpense                                                  |  |
| Interestexpense                                               |  |                  | (1,986  | )      |  |        | (1,113 | )      |  |    | (140    | )  |  |    | (193    | )  |
| Other                                                         |  |                  | (460    | )      |  |        | (258   | )      |  |    | — |    |  |    | (273    | )  |
|                                                          |  |                  | (2,446  | )      |  |        | (1,371 | )      |  |    | (140    | )  |  |    | (466    | )  |
| **Lossbefore incometaxes**                                    |  |                  | (12,148 | )      |  |        | (6,808 | )      |  |    | (18,803 | )  |  |    | (24,882 | )  |
| Incometaxprovision                                            |  |                  | (224    | )      |  |        | (126   | )      |  |    | (155    | )  |  |    | (75     | )  |
| Lossbefore minorityinterest                                   |  |                  | (12,372 | )      |  |        | (6,934 | )      |  |    | (18,958 | )  |  |    | (24,957 | )  |
| Minorityinterest in profit of consolidatedsubsidiary          |  |                  | 14      |        |  |        | 8      |        |  |    | — |    |  |    | — |    |
| **Netloss**                                                   |  |                  | (12,358 | )      |  |        | (6,926 | )      |  |    | (18,958 | )  |  |    | (24,957 | )  |
| **Netloss per share — basic anddiluted**                |  | $                     | (0.20   | )      |  | £     | (0.11  | )      |  | £ | (0.39   | )  |  | £ | (0.54   | )  |
| **Basicand diluted weighted average number of****shares'000** |  |                  | 62,625  |        |  |        | 62,625 |        |  |    | 48,741  |    |  |    | 46,336  |    |
|                                                               |

Seenotes to the consolidated financial statements

F-4

----

EBOOKERS PLC CONSOLIDATED STATEMENTSOF CASHFLOWS

|                                                                                      |  |                       |         |             |  |             |         |             |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------|--|-----------------------|---------|-------------|--|-------------|---------|-------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                 |  | Yearended December31, |
|                                                                                 |  | 2003                  |         | 2003        |  | 2002        |         | 2001        |
|                                                                                 |  | US$'000               |         | £'000 |  | £'000 |         | £'000 |
| **Cashflows from operating activities:**                                             |  |
| **Netloss**                                                                          |  |                  | (12,358 | )      |  |        | (6,926  | )      |  |   | (18,958 | )  |  |   | (24,957 | )  |
| Adjustmentsto reconcile net loss to net cash(used in)/providedbyoperatingactivities: |  |
| Depreciation andamortization                                                         |  |                  | 7,690   |        |  |        | 4,310   |        |  |   | 4,546   |    |  |   | 8,639   |    |
| Stockcompensation                                                                    |  |                  | 9,637   |        |  |        | 5,401   |        |  |   | 13,726  |    |  |   | 38      |    |
| Goodwillimpairment                                                                   |  |                  | 221     |        |  |        | 124     |        |  |   | — |    |  |   | 458     |    |
| Gainon sale of property, plant andequipment                                          |  |                  | (209    | )      |  |        | (117    | )      |  |   | (319    | )  |  |   | (412    | )  |
| Amortizationof finance costs                                                         |  |                  | 312     |        |  |        | 175     |        |  |
| Gain onsale of stock bysubsidiary                                                    |  |                  | (5,067  | )      |  |        | (2,840  | )      |  |   | — |    |  |   | — |    |
| Discountingof deferredconsideration                                                  |  |                  | 289     |        |  |        | 162     |        |  |   | — |    |  |   | — |    |
| Issuesof shares for non-cashconsideration                                            |  |                  | — |        |  |        | — |        |  |   | — |    |  |   | 359     |    |
| Changesin operating assets and liabilities, net of the effect ofacquisitions:        |  |
| Accountsreceivable                                                                   |  |                  | (160    | )      |  |        | (90     | )      |  |   | (140    | )  |  |   | 258     |    |
| Allowancefor doubtfulaccounts                                                        |  |                  | (1,113  | )      |  |        | (624    | )      |  |   | 716     |    |  |   | 112     |    |
| Prepaidexpenses                                                                      |  |                  | (9,270  | )      |  |        | (5,197  | )      |  |   | (616    | )  |  |   | 1,478   |    |
| Othercurrentassets                                                                   |  |                  | (519    | )      |  |        | (291    | )      |  |   | (360    | )  |  |   | 190     |    |
| Accountspayable                                                                      |  |                  | (1,030  | )      |  |        | (577    | )      |  |   | 5,348   |    |  |   | (296    | )  |
| Accruedreservationsliability                                                         |  |                  | (2,071  | )      |  |        | (1,161  | )      |  |   | 799     |    |  |   | 627     |    |
| Accruedexpenses and other currentliabilities                                         |  |                  | (4,574  | )      |  |        | (2,564  | )      |  |   | (697    | )  |  |   | 2,044   |    |
| **Netcash (used in)/provided by operatingactivities**                                |  |                  | (18,222 | )      |  |        | (10,213 | )      |  |   | 4,045   |    |  |   | (11,462 | )  |
| **Cashflows from investingactivities:**                                              |  |
| Decrease/(increase) in restrictedcash                                                |  |                  | 4,751   |        |  |        | 2,663   |        |  |   | (974    | )  |  |   | (1,442  | )  |
| Capitalexpenditures                                                                  |  |                  | (15,261 | )      |  |        | (8,554  | )      |  |   | (2,781  | )  |  |   | (2,911  | )  |
| Othernon-currentassets                                                               |  |                  | (1,484  | )      |  |        | (832    | )      |  |   | — |    |  |   | — |    |
| Proceedsfrom sale of stock bysubsIdiary                                              |  |                  | 5,315   |        |  |        | 2,979   |        |  |   | — |    |  |   | — |    |
| Paymentto acquire subsidiary, net of cashacquired                                    |  |                  | (5,408  | )      |  |        | (3,031  | )      |  |   | — |    |  |   | 360     |    |
| **Netcash used in investingactivities**                                              |  |                  | (12,087 | )      |  |        | (6,775  | )      |  |   | (3,755  | )  |  |   | (3,993  | )  |
| **Cashflows from financing activities:**                                             |  |
| Change in bankoverdraft                                                              |  |                  | (774    | )      |  |        | (434    | )      |  |   | 434     |    |  |   | (75     | )  |
| Proceedsfrom issuance of ordinary shares,net                                         |  |                  | 56,514  |        |  |        | 31,675  |        |  |   | 453     |    |  |   | — |    |
| Proceedsfrom sale and leaseback of property, plant andequipment                      |  |                  | 1,478   |        |  |        | 828     |        |  |   | — |    |  |   | — |    |
| Proceedsfrom sale of property, plant andequipment                                    |  |                  | 2,435   |        |  |        | 1,365   |        |  |   | — |    |  |   | 1,529   |    |
| Proceedsfromloan                                                                     |  |                  | 28,547  |        |  |        | 16,000  |        |  |   | — |    |  |   | — |    |
| Debtissuancecosts                                                                    |  |                  | (1,124  | )      |  |        | (630    | )      |  |   | — |    |  |   | — |    |
| Capitalrepayments of financeleases                                                   |  |                  | (1,188  | )      |  |        | (666    | )      |  |   | (1,034  | )  |  |   | (746    | )  |
| **Netcash provided by/(used in) financingactivities**                                |  |                  | 85,888  |        |  |        | 48,138  |        |  |   | (147    | )  |  |   | 708     |    |
| **Effectof exchange rates oncash**                                                   |  |                  | 437     |        |  |        | 245     |        |  |   | 514     |    |  |   | (136    | )  |
| Netincrease/(decrease) in cash and cashequivalents                                   |  |                  | 56,016  |        |  |        | 31,395  |        |  |   | 657     |    |  |   | (14,883 | )  |
| Cashand cash equivalent at beginning of theyear                                      |  |                  | 32,552  |        |  |        | 18,245  |        |  |   | 17,588  |    |  |   | 32,471  |    |
| Cashand cash equivalent at end of theyear                                            |  |                  | 88,568  |        |  |        | 49,640  |        |  |   | 18,245  |    |  |   | 17,588  |    |
| **Non-cashactivities**                                                               |  |
| Issue of shares for non-cashconsideration                                            |  |                  | 22,038  |        |  |        | 12,352  |        |  |   | — |    |  |   | 1,039   |    |
| **Supplementaldisclosure of cash flow activity:**                                    |  |
| Cash paymentsforinterest                                                             |  |                  | 1,436   |        |  |        | 805     |        |  |   | 113     |    |  |   | 122     |    |
| Cashpayments for capital leaseinterest                                               |  |                  | 71      |        |  |        | 40      |        |  |   | 27      |    |  |   | 71      |    |
| Cashpayments fortax                                                                  |  |                  | 623     |        |  |        | 349     |        |  |   | 213     |    |  |   | 47      |    |
|                                                                                      |

Seenotes to the consolidated financial statements.

F-5

----

EBOOKERS PLC CONSOLIDATED STATEMENTSOF COMPREHENSIVELOSS

|                                    |  |                       |         |             |  |             |        |             |  |        |         |         |  |        |         |         |  |  |
|------------------------------------|--|-----------------------|---------|-------------|--|-------------|--------|-------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                               |  | Yearended December31, |
|                               |  | 2003                  |         | 2003        |  | 2002        |        | 2001        |
|                               |  | US$'000               |         | £'000 |  | £'000 |        | £'000 |
| Netloss                            |  |                  | (12,358 | )      |  |        | (6,926 | )      |  |   | (18,958 | )  |  |   | (24,957 | )  |
| Othercomprehensive loss:           |  |
| Accumulated translationadjustments |  |                  | (241    | )      |  |        | (135   | )      |  |   | (85     | )  |  |   | (137    | )  |
| Totalcomprehensiveloss             |  |                  | (12,599 | )      |  |        | (7,062 | )      |  |   | (19,043 | )  |  |   | (25,094 | )  |
|                                    |

Seenotes to the consolidated financial statements.

F-6

----

CONSOLIDATED STATEMENTS OFSHAREHOLDERS'EQUITY

|                                                  |  |                |            |        |  |                           |         |                                    |  |                  |         |                    |  |        |         |         |  |        |         |        |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------------|--|----------------|------------|--------|--|---------------------------|---------|------------------------------------|--|------------------|---------|--------------------|--|--------|---------|---------|--|--------|---------|--------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                             |  |           |            |   |  | Additionalpaid in capital |         | Accumulatedothercomprehensive loss |  | Minorityinterest |         | Accumulateddeficit |  | Total  |
|                                             |  | OrdinaryShares |            |
|                                             |  | Shares         |            | Amount |  |
| In£'000 except share data                  |  |
| As of December31,2000                            |  |           | 45,289,529 |   |  |                      | 6,340   |                               |  |             | 69,678  |               |  |   | (110    | )  |  |   | — |   |  |   | (35,946 | )  |  |   | 39,962  |    |
| Netloss                                          |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | — |    |  |   | — |   |  |   | (24,957 | )  |  |   | (24,957 | )  |
| Issueof ordinaryshares                           |  |           | 253,900    |   |  |                      | 36      |                               |  |             | 323     |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 359     |    |
| Issueof ordinary shares foracquisitions          |  |           |       |   |  |                      |    |                               |  |             |    |               |  |   |    |    |  |   |    |   |  |
| ofothercompanies:                                |  |           |       |   |  |                      |    |                               |  |             |    |               |  |   |    |    |  |   |    |   |  |
| MrJetAB                                          |  |           | 1,208,961  |   |  |                      | 169     |                               |  |             | 790     |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 959     |    |
| TechnovateData and Services PrivateLtd           |  |           | 81,126     |   |  |                      | 12      |                               |  |             | 68      |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 80      |    |
| Ordinaryshares and options awardedas             |  |           |       |   |  |                      |    |                               |  |             |    |               |  |   |    |    |  |   |    |   |  |
| compensation                                     |  |           | —    |   |  |                      | — |                               |  |             | 38      |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 38      |    |
| Translationadjustments                           |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | (137    | )  |  |   | — |   |  |   | — |    |  |   | (137    | )  |
| Asof December 31,2001                            |  |           | 46,833,516 |   |  |                      | 6,557   |                               |  |             | 70,897  |               |  |   | (247    | )  |  |   | — |   |  |   | (60,903 | )  |  |   | 16,304  |    |
| Netloss                                          |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | — |    |  |   | — |   |  |   | (18,958 | )  |  |   | (18,958 | )  |
| Issueof ordinaryshares                           |  |           | 216,566    |   |  |                      | 30      |                               |  |             | 420     |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 450     |    |
| Sharesissued to employees asremuneration         |  |           | 11,654     |   |  |                      | 2       |                               |  |             | 1       |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 3       |    |
| Issueof ordinary shares asdeferred               |  |           |       |   |  |                      |    |                               |  |             |    |               |  |   |    |    |  |   |    |   |  |   |    |    |  |   |    |    |
| considerationfor the acquisition ofFlightbookers |  |           | 3,000,000  |   |  |                      | 420     |                               |  |             | 4,833   |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 5,253   |    |
| Ordinaryshares and options awardedas             |  |
| compensation                                     |  |           | —    |   |  |                      | — |                               |  |             | 13,726  |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 13,726  |    |
| Translationadjustments                           |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | (85     | )  |  |   | — |   |  |   | — |    |  |   | (85     | )  |
| Asof December 31,2002                            |  |           | 50,061,736 |   |  |                      | 7,009   |                               |  |             | 89,877  |               |  |   | (332    | )  |  |   | — |   |  |   | (79,861 | )  |  |   | 16,693  |    |
| Netloss                                          |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | — |    |  |   | — |   |  |   | (6,926  | )  |  |   | (6,926  | )  |
| Issueof ordinaryshares                           |  |           | 2,484,720  |   |  |                      | 347     |                               |  |             | 2,550   |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 2,897   |    |
| Placementof ordinaryshares                       |  |           | 8,840,579  |   |  |                      | 1,238   |                               |  |             | 28,926  |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 30,164  |    |
| Issueof ordinary shares for the acquisitionof    |  |
| Travelbag HoldingsLimited                        |  |           | 3,537,134  |   |  |                      | 495     |                               |  |             | 11,841  |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 12,336  |    |
| Sharesissued to employees asremuneration         |  |           | 7,179      |   |  |                      | 1       |                               |  |             | 15      |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 16      |    |
| Ordinaryshares and options awardedas             |  |           |       |   |  |                      |    |                               |  |             |    |               |  |   |    |    |  |   |    |   |  |
| compensation                                     |  |           | —    |   |  |                      | — |                               |  |             | 5,401   |               |  |   | — |    |  |   | — |   |  |   | — |    |  |   | 5,401   |    |
| Costsof shares issued foracquisition             |  |           | —    |   |  |                      | — |                               |  |             | (1,403  | )             |  |   | — |    |  |   | — |   |  |   | — |    |  |   | (1,403  | )  |
| Minorityinterest                                 |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | — |    |  |   | 128     |   |  |   | — |    |  |   | 128     |    |
| Translationadjustments                           |  |           | —    |   |  |                      | — |                               |  |             | — |               |  |   | (135    | )  |  |   | — |   |  |   | — |    |  |   | (135    | )  |
| As of December 31,2003                           |  |           | 64,931,348 |   |  |                      | 9,090   |                               |  |             | 137,207 |               |  |   | (467    | )  |  |   | 128     |   |  |   | (86,787 | )  |  |   | 59,171  |    |
|                                                  |

Seenotes to the consolidated financialstatements.

F-7

----

EBOOKERSPLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                    |
|----------|--------------------|
| 1.  | Nature of Business |

ebookers plc is aEuropean online travel company serving the consumer and small businessmarket. ebookers plc has local language web sites servicing 13 Europeancountries: the United Kingdom, Austria, Belgium, Denmark, Finland,France, Germany, Ireland, The Netherlands, Norway, Spain, Sweden, andSwitzerland. The Group offers travel products and services includingair tickets, hotels, car hire, travel insurance and various otherproducts as well as some non-travel products. The Group is suppliedwith the travel products and services directly from travel product andservice providers, such as airlines, hotel operators and car hirecompanies. Customers may access the Group on the Internet, via e-mail,telephone the Group's travel consultants or walk into its shopsto purchase products and services it offers. ebookers plc derives asignificant amount of its income from merchant fares, which arenegotiated with the airlines up to a year in advance and can offercustomers substantial discounts on airlines' publishedprices.

ebookers plc has a multi-channel sales capabilityoffering customers electronic as well as offline sales channels.ebookers plc also has a network of local-language call centers, and amulti-lingual call center in Ireland, in order to assist customers withtheir bookings. ebookers has also established a low cost BusinessProcess Outsourcing facility in New Delhi, India. This facilitycurrently performs 13 separate functions from e-mail sales to softwaredevelopment.

ebookers plc has American depositary receipts("ADRs"), each representing two ordinaryshares quoted on the Nasdaq National Market (EBKR) and ordinary shareslisted on the London Stock Exchange (EBR). During 2002, ebookers alsohad its ADRs listed on the Neuer Markt in Frankfurt, but voluntarilydelisted such securities on October 15,2002.

|          |                                           |
|----------|-------------------------------------------|
| 2.  | Summary of significant accountingpolicies |

Basis of consolidation

Theconsolidated financial statements comprise the accounts of the ebookersplc and all of its majority owned and controlled subsidiaries afterelimination of all inter-company balances and transactions.

Reclassifications

Certain reclassifications havebeen made to the prior year financial statements to conform to the 2003presentation. These reclassifications did not impact net loss for theyears ended December 31, 2002 and 2001.

Use ofestimates

The preparation of the consolidated financialstatements and related disclosures in conformity with accountingprinciples generally accepted in the United States of America("US GAAP"), requires management to makeestimates and assumptions that affect the reported amounts of assetsand liabilities and disclosures of contingent assets and liabilities atthe date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Estimates are usedfor, but not limited to, the allowance for doubtful accounts,depreciation and amortization, sales returns, taxes and contingencies.Actual results could differ from these estimates.

Foreigncurrency

Amounts in the financial statements are presentedin pounds sterling (£), the currency of the United Kingdom, thecountry in which the Group's head office currently conductsbusiness. The functional currencies of the Group's foreignsubsidiaries are their respective local currencies. The 

F-8

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financial statements of foreign subsidiariesare translated into pounds sterling using the current-rate method.Accordingly, assets and liabilities denominated in foreign currenciesare translated at rates of exchange in effect at the balance sheetdate. Revenues and expenses are translated at average rates of exchangein effect during the year. Differences arising from the translation arerecorded to accumulated other comprehensive loss.

Transactiongains and (losses) arising from transactions denominated in a currencyother than the functional currency of the entity involved of£(253,000), £130,000 and £(273,000) during the yearsended December 31, 2003, 2002 and 2001, respectively, are included inother income and expense in the consolidated statements ofoperations.

Convenience translations

Theconsolidated financial statements are presented in pounds sterling. Inaddition, the consolidated financial statements as of and for thefiscal year ended December 31, 2003 are also presented in US dollars.These US dollar amounts are presented solely for the convenience of thereader at the rate of £1.00 = $1.7842, the noon buying rate inNew York City for cable transfers in pounds sterling as certified forcustoms purposes by the Federal Reserve Bank of New York on December31, 2003. No representation is made that the amounts shown could havebeen or could be converted into US dollars at that or any otherrate.

Cash and cash equivalents

Cashequivalents include short-term deposits and other investments that arereadily convertible into cash and have original maturities of threemonths or less.

Restricted cash

Restrictedcash comprises of £821,000 as of December 31 2003 held in aseparate account under the regulations set by the International AirTransport Association ("IATA") and otherlicensing authorities (2002: £3,484,000).

Accountsreceivable

The Group performs ongoing credit evaluationsof its customers and generally does not require collateral. The Groupcontinuously monitors collections and payments from its customers andregularly adjusts credit limits of customers based upon payment historyand a customer's current creditworthiness, as judged by theGroup. Furthermore, as the majority of the Group's sales aretransacted through the use of credit cards, collection risks aremitigated as a result of the immediate payment on sale.

Property, plant and equipment

Property, plant andequipment are carried at historical cost less accumulated depreciation.Depreciation on leasehold improvements, buildings, furniture, andoffice equipment and software and computer and communications equipmentis calculated on the straight-line method over the followingperiods:

|                                                                           |  |                                                                   |  |  |  |  |
|---------------------------------------------------------------------------|--|-------------------------------------------------------------------|--|--|--|--|
| –   Freeholdproperty                                 |  | –   50years;                                 |
| –   Leaseholdimprovements                            |  | –  the lesser of 5 years orthe life of the lease; |
| –   Furniture,fittings and office equipment          |  | –   5-7years;                                |
| –   Software and computer andcommunicationsequipment |  | –   2-4years                                 |
|                                                                           |

Recurring maintenance on property andequipment is expensed as incurred.

When assets are retired orotherwise disposed, the related cost and accumulated depreciation areeliminated from the respective accounts and any gains or losses ondisposals are included in the results from operations.

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Impairment of long-lived assets otherthan goodwill and indefinite-lived intangible assets

Thecarrying values of intangible assets subject to amortization and otherlong-lived assets are reviewed on a regular basis for the existence offacts or circumstances, both internally and externally, that maysuggest impairment. The determination of whether an impairment existsis based on any excess of the carrying value over the expectedundiscounted future net cash flows, excluding interest charges. If animpairment is determined to exist, any related impairment loss isrecognized as the amount by which the carrying amount of the assetexceeds the estimated fair value of the asset, estimated throughexpected future cash flows, discounted at a rate of return for analternate investment. Additionally, all such assets are reviewedregularly to evaluate the appropriateness of their remaining usefullives.

Impairment of indefinite-lived intangibleassets

Indefinite-lived intangible assets are tested forimpairment annually, or more frequently if events or changes incircumstances indicate that the asset might be impaired. The impairmenttest involves a comparison of the fair value of the intangible assetwith its carrying amount. If the carrying amount of an intangible assetexceeds its fair value, an impairment loss is recognized in an amountequal to that excess.

Goodwill

Goodwillrepresents the excess of the purchase price over the estimated fairvalue of the net assets acquired. Should pre-acquisition contingenciesrelating to the valuation of such assets and liabilities crystallizewithin one year from the purchase date, the Group records such itemsagainst goodwill. The Group's adoption of SFAS No. 142"Goodwill and Other Intangible Assets" hadthe effect of prospectively eliminating the amortization of goodwilland certain other intangible assets beginning January 1, 2002. Underthe non-amortization approach, goodwill is not amortized, but insteadis tested for impairment annually or whenever impairment indicatorsrequire, and charged as expense to results of operations in periods inwhich the recorded value of goodwill is more than the goodwill'simplied fair value. Estimates of fair value are primarily determinedusing discounted cash flows and are based on the Group's bestestimate of future revenue and operating costs and general marketconditions. This approach uses significant assumptions, includingprojected future cash flows (including timing), the discount rateaffecting the risk inherent in future cash flows, and the terminalgrowth rate.

During the first quarter of fiscal 2003, the Grouprecorded a non-cash charge of £124,000 in respect of goodwillwrite-down as a result of the liquidation of a German subsidiary. Thewrite-down was recorded to the "General and administrativeexpenses" line item in the Consolidated Statements ofOperations.

Prior to the adoption of SFAS No. 142, the Groupamortized goodwill on a straight-line basis over an estimated life offive years and periodically evaluated the recoverability of goodwill bycomparing its net book value to expected future cash flows on anundiscounted basis, over the remaining amortization period of theasset. The Group measured impairment of enterprise level goodwill on adiscounted cash flow basis. For the year ended December 31, 2001 theGroup recorded amortization of goodwill of £3,830,000 andimpairment of goodwill of £784,000.

A reconciliation ofpreviously reported net loss and loss per share to the amounts adjustedfor the exclusion of amortization of goodwill is asfollows:

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|                                         |  |                           |         |                           |  |                           |         |         |  |         |         |         |  |  |
|-----------------------------------------|--|---------------------------|---------|---------------------------|--|---------------------------|---------|---------|--|---------|---------|---------|--|--|
|                                    |  | December312003£'000 |         | December312002£'000 |  | December312001£'000 |
| **Reported netloss**                    |  |                      | (6,926  | )                    |  |                      | (18,958 | )  |  |    | (24,957 | )  |
| Add:Goodwillamortization                |  |                      | — |                      |  |                      | — |    |  |    | 3,830   |    |
| Adjustednetloss                         |  |                      | (6,926  | )                    |  |                      | (18,958 | )  |  |    | (21,127 | )  |
| **Basicand diluted net loss per share** |  |
| Reportednetloss                         |  | £                   | (0.11   | )                    |  | £                   | (0.39   | )  |  | £ | (0.54   | )  |
| Goodwillamortization                    |  | £                   | 0.00    |                      |  | £                   | 0.00    |    |  | £ | 0.08    |    |
| Adjustednetloss                         |  | £                   | (0.11   | )                    |  | £                   | (0.39   | )  |  | £ | (0.46   | )  |
|                                         |

Fairvalue of financial instruments

The carrying amounts of theGroup's cash and cash equivalents, certificates of deposits,accounts receivable and accounts payable approximate their respectivefair values based on the short-term nature of these instruments. Thefair value of foreign currency contracts, included in accrued expensesand other current liabilities in the consolidated balance sheet, was£236,000 at December 31, 2003 (2002: £0), which wasestimated by obtaining quotes from financial institutions.

Share consolidations

On April 6, 2001, aconsolidation of 5 ordinary shares at £0.028 each for 1 ordinaryshare of £0.14 each occurred.

Revenuerecognition

The Group applies Emerging Issues Task Force("EITF") Abstract No. 99-19,"Reporting Revenue Gross as a Principal versus Net as anAgent" and Staff Accounting Bulleting("SAB") No. 101, "RevenueRecognition in Financial Statements". The Group'srevenue consists largely of commission on sales of discounted merchantairfares on scheduled flights as well as other travel products andservices. Discounted merchant fare airline tickets are tickets that arebought by the Group or other independent third parties to fulfillexisting commitments to the Group's customers. The Group sellsthese tickets to consumers at fares determined by the Group which aregenerally at a significant discount to published fares, that is, thefare at which the airline offers the ticket to the public. The Grouprecognizes revenue at the time the reservation is ticketed, as thecustomer generally does not have the ability to cancel tickets orobtain refunds after ticketing, and all amounts payable have beenreceived. In cases where customers have the ability to cancel or obtainrefunds after ticketing, we estimate our refund obligations and aprovision for such amounts is made.

The other travel productrevenue classification in the Consolidated Statement of Operationsincludes commission from airlines for the sale of tickets at publishedfares, commission revenue from other non-airfare travel products andservices and incentive income, as well as revenue from charges tocustomers for the right to use a credit card for purchases. Non-airfaretravel products and services revenue includes commission on discountand full rate hotel reservations, car hire and travel insurance, aswell as other travel related products. Revenue for these travelproducts and services is recognized as the commission on the full fare,with the exception of revenue from credit card charges, which isrecognized on a gross basis. Incentive income is received both fromtravel-providers and from the Group's non-travel service providerbusiness partners and is recognized at the end of each monthly orquarterly measurement period if the particular target has been achievedin the specified period. Incentive income from other of theGroup's non-travel service provider business partners took theform of up-front payments, made upon commencement of certain fixed-termagreements. Revenue from such up-front payments is recognized ratablyover the life of the agreement to the extent that the residual of theunrecognized amount exceeds the potential amount repayable for failureto achieve future performance targets, regardless of the likelihood ofany repayment.

Accrued reservations liability

The Group recognizes revenue at the time the reservation isticketed. Some of the companies in the Group, however, invoicecustomers before ticketing has been performed. In these instances, as

F-11

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well as when customers pay deposits, therevenue is deferred and recognized upon ticket issuance. At December31, 2003, this deferred revenue was £5,597,000 (2002:£4,073,000).

Product technology and developmentcosts

The Group applies EITF Abstract No. 00-2,"Accounting for Web Site Development Costs",which provides guidance on how an entity should account for costsincurred to develop a website. EITF Abstract No. 00-2 addresses thetreatment of certain costs incurred during the different stages ofwebsite development. The Group capitalized £983,000 of websitedevelopment costs in 2003 (2002: £321,000, 2001: £792,000).The capitalized costs are being amortized over two years.

Marketing and advertising

Except for the costs ofbrochures, the Group expenses the costs of marketing and advertising asincurred. The Group expensed £13,473,000 in 2003 (2002:£6,113,000 2001: £10,321,000). Brochures are capitalized asprepaid supplies and subsequently expensed on a straight-line basis,with write-downs of any remaining capitalized amounts in excess ofthose attributable to brochures on hand and expected to be used. TheGroup capitalized £416,000 of brochure costs in fiscal 2003(2002: £nil, 2001: £nil).

Comprehensiveloss

The Group follows the provisions of SFAS No. 130,"Reporting Comprehensive Income". SFAS 130establishes standards for reporting comprehensive income and itscomponents in the financial statements. The only difference between theGroup's net loss and its total comprehensive loss for fiscalyears 2003, 2002 and 2001 is the accumulated translation adjustment.There has been no tax effect on comprehensive loss for fiscal 2003,2002 and 2001.

Income taxes

The Group accountsfor income taxes in accordance with SFAS No. 109,"Accounting for Income Taxes", which requiresthat the Group recognize deferred tax liabilities and assets based onthe differences between the financial statement carrying amounts andthe tax bases of assets and liabilities, using enacted tax rates ineffect in the years the differences are expected to reverse. Deferredincome tax benefit (expense) results from the change in net deferredtax assets or deferred tax liabilities. A valuation allowance isrecorded when it is more likely than not that some or all or anydeferred tax assets will not be realized.

Loss pershare

In accordance with SFAS No. 128,"Earnings Per Share", basic loss per share isbased upon the weighted average number of ordinary shares outstanding.Diluted loss per share is based upon the weighted average number ofordinary and potential ordinary shares for each period presented.Potential ordinary shares include stock options using the treasurystock method. Potential ordinary shares have been excluded from dilutedweighted average ordinary shares for all fiscal years as the effectwould be anti-dilutive.

Segment Information

ebookers is organized into three reportable segments: UK –Flightbookers, UK – Travelbag Group and Other Europe. OtherEurope comprises the Group's operations in Austria, Belgium,Denmark, Finland, France, Germany, Ireland, the Netherlands, Norway,Spain, Sweden and Switzerland. Each segment offers travel products andservices including air tickets, hotels, car hire, travel insurance andvarious other products as well as some non-travel products. Theaccounting policies of the segments are based on accounting principlesgenerally accepted in the United Kingdom ("UKGAAP"), which differ from US GAAP in certain significantrespects. ebookers evaluates performance based on gross sales, and UKGAAP profit or loss from operations before income taxes, exceptionalitems as defined by UK GAAP, goodwill amortization, stock compensationand National Insurance on stock options ("Adjusted Pre-TaxProfit").

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ebookers' reportable segments aresplit along geographic areas. In addition, there are two reportablesegments in the United Kingdom as a result of the Company'sacquisition of the Travelbag Group during fiscal 2003, which wasmanaged separately during the year. This acquisition resulted in achange to our reportable segments from the prior year and the prioryears have been restated to reflect the current year presentation.

Summarized financial information, measured under UK GAAP, concerningthe reportable segments is asfollows:

|                                  |  |                            |         |                        |  |                        |         |                                     |  |                  |         |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------|--|----------------------------|---------|------------------------|--|------------------------|---------|-------------------------------------|--|------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                             |  | UKFlightbookers£'000 |         | UKTravelbag£'000 |  | OtherEurope£'000 |         | Head Office &Support£'000 |  | Total£'000 |
| Yearended December 31,2003       |  |                       |    |                   |  |                   |    |                                |  |             |    |    |  |   |    |    |  |   |    |    |
| Grosssales(1)                    |  |                       | 187,787 |                   |  |                   | 201,573 |                                |  |             | 130,095 |    |  |   | 1,121   |    |  |   | 520,576 |    |
| Revenue                          |  |                       | 22,605  |                   |  |                   | 28,932  |                                |  |             | 14,593  |    |  |   | 1,121   |    |  |   | 67,251  |    |
| Adjustedpre-tax profit/(loss)(2) |  |                       | 4,098   |                   |  |                   | 3,573   |                                |  |             | 2,377   |    |  |   | (8,792  | )  |  |   | 1,256   |    |
| Yearended December 31,2002       |  |                       |    |                   |  |                   |    |                                |  |             |    |    |  |   |    |    |  |   |    |    |
| Grosssales(1)                    |  |                       | 182,103 |                   |  |                   | — |                                |  |             | 91,884  |    |  |   | 328     |    |  |   | 274,315 |    |
| Revenue                          |  |                       | 21,812  |                   |  |                   | — |                                |  |             | 10,108  |    |  |   | 334     |    |  |   | 32,254  |    |
| Adjustedpre-tax profit/(loss)(2) |  |                       | 2,718   |                   |  |                   | — |                                |  |             | 1,214   |    |  |   | (9,174  | )  |  |   | (5,242  | )  |
| Yearended December 31,2001       |  |                       |    |                   |  |                   |    |                                |  |             |    |    |  |   |    |    |  |   |    |    |
| Grosssales(1)                    |  |                       | 111,028 |                   |  |                   | — |                                |  |             | 69,057  |    |  |   | — |    |  |   | 180,085 |    |
| Revenue                          |  |                       | 13,094  |                   |  |                   | — |                                |  |             | 7,539   |    |  |   | — |    |  |   | 20,635  |    |
| Adjustedpre-tax profit/(loss)(2) |  |                       | (18,968 | )                 |  |                   | — |                                |  |             | (362    | )  |  |   | — |    |  |   | (19,330 | )  |
|                                  |

|  |
|--|
|  |  |
|  |

|  | (1)Gross sales is a non-US GAAP measure used by Management to evaluateoperating performance by looking at the total transaction value of allour services. It includes the total amount paid by customers for theservices provided by us, as opposed to the margin we earn on productsand services, which is the manner in which our revenue is calculated.Gross sales is a useful measure, widely used throughout the travelindustry by companies and financial analysts as a way of trackingcompany size. Additionally, many travel suppliers give incentives basedon gross sales performance. |
|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | (2) Areconciliation of adjusted pre-tax profit to operating loss for fiscal2003, 2002 and 2001 is asfollows: |
|--|--------------------------------------------------------------------------------------------------------------|

|                                                            |  |                                        |         |                                        |  |                                       |         |         |  |        |         |         |  |  |
|------------------------------------------------------------|--|----------------------------------------|---------|----------------------------------------|--|---------------------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                                       |  | YearEnded December 31, 2003£'000 |         | YearEnded December 31, 2002£'000 |  | YearEnded December 31,2001£'000 |
| Segmental adjustedpre-taxprofit/(loss)                     |  |                                   | 1,256   |                                   |  |                                  | (5,242  | )  |  |   | (19,330 | )  |
| Stockcompensation                                          |  |                                   | (4,839  | )                                 |  |                                  | (1,194  | )  |  |   | (831    | )  |
| NationalInsurance on stock options                         |  |                                   | (983    | )                                 |  |                                  | (1,135  | )  |  |   | — |    |
| Amortization ofgoodwill                                    |  |                                   | (8,746  | )                                 |  |                                  | (4,761  | )  |  |   | (4,696  | )  |
| UKGAAP operating exceptionalitems                          |  |                                   | (4,409  | )                                 |  |                                  | — |    |  |   | (784    | )  |
| Otherincome                                                |  |                                   | 2,840   |                                   |  |                                  | — |    |  |   | — |    |
| UKGAAP loss beforetax                                      |  |                                   | (14,881 | )                                 |  |                                  | (12,332 | )  |  |   | (25,641 | )  |
| USGAAPadjustments                                          |  |                                   |    |                                   |  |                                  |    |    |  |   |    |    |
| Revenuerecognition(3)                                      |  |                                   | (766    | )                                 |  |                                  | 325     |    |  |   | (900    | )  |
| Fairvalue of forward exchange contracts(4)                 |  |                                   | (180    | )                                 |  |                                  | — |    |  |   | — |    |
| Amortizationof goodwill(5)                                 |  |                                   | 8,746   |                                   |  |                                  | 4,761   |    |  |   | 866     |    |
| Amortizationof profit on sale and leaseback transaction(6) |  |                                   | 75      |                                   |  |                                  | (160    | )  |  |   | — |    |
| Stockcompensation(7)                                       |  |                                   | (561    | )                                 |  |                                  | (12,532 | )  |  |   | 793     |    |
| Nationalinsurance(8)                                       |  |                                   | 759     |                                   |  |                                  | 1,135   |    |  |   | — |    |
| USGAAP loss beforetax                                      |  |                                   | (6,808  | )                                 |  |                                  | (18,803 | )  |  |   | (24,882 | )  |
|                                                            |

|  | **(3)Revenue recognition** |
|--|----------------------------|

Upon commencement of certainfixed-term agreements, the Company received up-front payments from itstrade partners. Under the terms of these agreements, the Company isrequired to achieve a certain level of sales otherwise some or all ofthe up-front payment may become repayable. Under UK GAAP, the up-frontpayments are released to income on a straight-line basis over the termof the agreement and provisions are made for any amounts that areexpected to become repayable if the sales targets are not achieved.

Under US GAAP, the up-front payments are only released to incomeonce the potential amount repayable for failure to achieve the salestargets, regardless of the likelihood of any repayment, is less thanthe up-front payment received. At 31 December 2003, deferred revenueunder US GAAP was greater than that under UK GAAP by £764,000 asa result of such penalty clauses and revenue recognized during theperiod was £189,000 less under US GAAP as compared to UKGAAP.

The Company also receives income from sales incentiveschemes, offered by its various partners, where additional amounts arereceived if a cumulative performance target is achieved. Under UK GAAP,where it can reasonably be expected that the Company will attain therequired performance target set for such a scheme, the Company recordsrevenue over the period of measurement to which the revenue relates.Changes to estimates of the levels of targets that will be attained mayresult in changes to the rate of accrual. Under US GAAP, the Companyonly recognizes revenue from such a scheme once the specificperformance target set by the scheme is achieved. At 31 December 2003,accrued revenue in the Company's UK GAAP Financial Statementsincluded £577,000 of accrued revenue, relating to expectedattainment of incentive targets, which has not been recognized in theCompany's US GAAP Financial Statements.

The total impactof these differences in treatment between UK GAAP as compared to USGAAP has decreased current liabilities by £1,341,000 as at 31December 2003, and decreased revenue for the year ended 31 December2003 by £766,000.

|  | **(4) Derivatives andhedging activities** |
|--|-------------------------------------------|

Under UK GAAP, gains and lossesarising on forward foreign exchange contracts used for qualifyinghedges of firm commitments or anticipated transactions are deferred andrecognized in the profit and loss account or as adjustments of carryingamounts when the hedged transaction occurs. 

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Thus transactions, contracts, assets andliabilities denominated in foreign currencies hedged by forward foreignexchange contracts are recorded at the forward contract price.

Under US GAAP, all derivative instruments, including certainderivative instruments embedded in other contracts, are recorded on thebalance sheet at their fair value. Changes in the fair value ofderivatives are recorded each period in earnings unless specific hedgeaccounting criteria are met. In order to qualify for hedge accountingunder US GAAP, a company must formally document, designate and assess,at least quarterly, the effectiveness of transactions that qualify forhedge accounting. The Company has not designated any derivatives asaccounting hedges under US GAAP.

Under US GAAP, all foreigncurrency denominated monetary assets and liabilities must be translatedat the foreign exchange spot rate at the balance sheet date.

|  | **(5) Goodwill and other intangibleassets** |
|--|---------------------------------------------|

Under US GAAP, the valuation of shareconsideration issued in the acquisition of Travelbag was based on theshare price of ebookers plc for a few days before and after theacquisition was agreed and announced. Under UK GAAP, the valuation ofshare consideration was determined based on the average market price ofthe ebookers' shares on the date of acquisition. As a result ofthis difference in treatment, shares were valued £336,000 higherfor US GAAP as compared to UK GAAP. This resulted in a correspondingincrease in goodwill of this amount under US GAAP.

Under UKGAAP, intangible assets arising on a business combination arerecognized separately from goodwill if their value can be measuredreliably on initial recognition and they can be disposed of separatelywithout disposing of the business itself.

Under US GAAP, theexcess of the purchase price paid over the underlying fair valueallocated to the identifiable assets (including intangibles) andliabilities acquired is recorded as goodwill. Statement of FinancialAccounting Standards No. 141, Business Combinations, requires thatintangible assets be recognized separately from goodwill if either (1)they result from contractual or other legal rights or (2) theintangible asset is capable of being separated or divided from theacquired entity and sold, transferred, licensed, rented or exchanged.On the acquisition of Travelbag, the Company identified and recognizedtwo brands as intangible assets, "Travelbag",valued at £32,076,000, and "Bridge TheWorld", valued at £1,950,000, both of which weredetermined to have an indefinite life. Under UK GAAP, these brands didnot qualify for separate recognition and thus were treated as beingpart of the acquired goodwill.

This recognition of these brandsunder US GAAP gave rise to a deferred tax liability of£10,200,000 at acquisition, with a corresponding increase in theacquired value of goodwill. There is no corresponding adjustment to theacquisition values under UK GAAP.

Under UK GAAP, FRS No. 10,Goodwill and Intangible Assets, the excess of the purchase price paidover the underlying fair value allocated to the assets and liabilitiesacquired must be capitalized and amortized over its estimated usefullife not exceeding 20 years.

Under US GAAP, as a result of theadoption of Statement of Financial Accounting Standards No. 142Goodwill and Other Intangible Fixed Assets ("SFAS142"), as of 1 January 2002, the Company is no longerrequired to amortize goodwill and other intangible assets withindefinite lives but is required to subject these assets to periodictesting for impairment. Upon adoption of SFAS 142, the Companycompleted a transitional impairment review related to the carryingvalue of goodwill at 1 January 2002 and determined that goodwill wasnot impaired.

US GAAP requires goodwill and other intangibleassets with indefinite lives to be assessed for impairment annually andwhenever events or changes in circumstances indicate that the carryingamount of such assets may not be recoverable. The Company determinedthat there was no need for an impairment charge during fiscal 2003 or2002, with the exception of a charge of £124,000 recorded underboth US and UK GAAP associated with the goodwill of a German subsidiarywhich was liquidated during fiscal 2003.

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|  | **(6) Sale and leasebacktransactions** |
|--|----------------------------------------|

In May 2001, the Company entered into asale and leaseback transaction that resulted in a gain on disposal of£605,000. Under US GAAP, this gain has been deferred andamortized over the three-year estimated useful life of the asset. UnderUK GAAP, this gain has been deferred and amortized over the two-yearterm of the lease. As a result of this difference in treatment andgiven that the lease term expired during the year, an additional gainof £75,000 was recognized for US GAAP. The remaining deferredgain of £85,000 at December 31, 2003 will be recognized in fiscal2004 as the asset's useful life will lapse during 2004.

InDecember 2003, a sale and leaseback transaction resulted in £nilgain on disposal under both US GAAP and UK GAAP. However, under USGAAP, the leaseback was determined to be a capital lease and theCompany recorded a tangible fixed asset and a related obligation of£319,000. At 31 December 2003, the remaining obligation was£290,000. Under UK GAAP, the lease was classified as an operatinglease, and consequently no asset or obligation was recorded at theinception of the lease and a rental payment of £29,000, paid atthe start of the rental period, is included within prepayments.

|  | **(7) Stock compensation cost** |
|--|---------------------------------|

UnderUK GAAP, when options are issued to acquire shares, any compensationcharge, calculated as the difference between the fair value of theshares at the grant date and any contribution from the employee, isrecognized immediately if they are not subject to any performancecriteria or over the period to which the employee's servicerelates.

Under US GAAP, compensation cost equal to thedifference between the market price of the shares and the option priceon the measurement date (the date upon which both the number of sharesthe employee is entitled to receive and option price is known) isrecognized from the date of grant over the vesting period of options.Where the measurement date occurs after the date of grant, as in thecase of performance related options, compensation cost is recordedunder variable plan accounting such that the difference between theprice of the shares at each balance sheet date and the option exerciseprice is charged to income over the vesting period and is adjusted insubsequent periods up to the measurement date.

Under UK GAAP,the compensation attributable to the incremental share options grantedunder the terms of the October 21, 1999 option agreement with theGroup's Chief Executive Officer, Dinesh Dhamija as a consequenceof a share issuance, is measured using the share price at the issuancedate. Under US GAAP, the compensation is remeasured using the shareprice at each balance sheet date. Accordingly, the compensation expenserecorded under US GAAP is subject to subsequent changes in theCompany's share price.

|  | **(8) NationalInsurance** |
|--|---------------------------|

National Insurance, a form of social securitytax in the United Kingdom, is payable by employers on employeeremuneration, including share option schemes which are unapproved bythe UK Inland Revenue. The liability is assessed at 12.8% of thedifference between the market value of the shares and the exerciseprice at the date of exercise. Accordingly, the liability is not knownuntil the options are exercised.

Under UK GAAP, the estimatedNational Insurance expense is spread over the vesting period of theoptions. At each period end, the increase or decrease in share priceduring the period is considered and an adjustment made to the amountaccrued for the ultimate liability that will arise on the exercise ofthe options.

Under US GAAP, following Emerging Issues Task ForceAbstract No. 00-16: Recognition and Measurement of Employer PayrollTaxes on Employee Stock-based Compensation ("EITF00-16"), which was effective for options granted after 20July 2000, no accrual is recorded for National Insurance until theoption is exercised and the National Insurance becomes payable. Priorto EITF 00-16, an accrual was made such that the expected liabilitybased on the period end share price was expensed over the vestingperiod. Prior to the adoption of EITF 00-16, ebookers had accrued anamount of £635,000 under US GAAP. At 31 December 2003, thisaccrual had been fully utilized.

F-16

----

Asset information has not been disclosedby reportable segment as management does not evaluate this informationby reportable segment. Long-lived assets, measured under US GAAP, bygeographic region are asfollows:

|             |  |                        |        |                        |  |                        |        |        |  |        |        |        |  |  |
|-------------|--|------------------------|--------|------------------------|--|------------------------|--------|--------|--|--------|--------|--------|--|--|
|        |  | Asat December 31, 2003 |        | As at December 31,2002 |  | As at December 31,2001 |
|        |  | £'000            |        | £'000            |  | £'000            |
| UK          |  |                   | 83,864 |                   |  |                   | 10,310 |   |  |   | 13,398 |   |
| OtherEurope |  |                   | 6,930  |                   |  |                   | 6,181  |   |  |   | 5,458  |   |
| Total       |  |                   | 90,794 |                   |  |                   | 16,491 |   |  |   | 18,855 |   |
|             |

Supplierconcentration

Our main suppliers are airlines. In fiscalyear 2003, 65 percent of our airline expenditures were attributable toten airlines and the rest of our business was split among over 100other airlines. British Airways was the only airline which accountedfor greater than 10 percent of airline expenditure, with BritishAirways alone being approximately 20 percent of the Group's totalairline expenditure.

Share-based compensation

At December 31, 2003, the Group was responsible for theadministration of share-based employee compensation arrangements, whichare more fully described in Note 12. The Group accounts for thesearrangements under the recognition and measurement provisions ofAccounting Principles Board Opinion ("APB")No. 25, "Accounting for Stock Issued toEmployees," and related interpretations. Under APB No. 25,compensation cost is recognized over the vesting period based on thedifference, if any, on the measurement date between the fair value ofthe Group's shares and the amount an employee must pay to acquirethe shares. The following table illustrates the effect on net loss andloss per share if the Group had applied the fair value recognitionprovisions of SFAS No. 123, "Accounting for Stock-BasedCompensation".

|                                                                                                                                              |  |                                |         |         |  |         |         |         |  |         |         |         |  |  |
|----------------------------------------------------------------------------------------------------------------------------------------------|--|--------------------------------|---------|---------|--|---------|---------|---------|--|---------|---------|---------|--|--|
|                                                                                                                                         |  | Yearended December31,          |
|                                                                                                                                         |  | 2003                           |         | 2002    |  | 2001    |
|                                                                                                                                         |  | (in000's except share amounts) |
| Net loss asreported                                                                                                                          |  | £                        | (6,926  | )  |  | £ | (18,958 | )  |  | £ | (24,957 | )  |
| Add:Share-based employee compensation expense included in reported netloss, net of related taxeffects                                        |  |                           | 5,401   |    |  |    | 13,726  |    |  |    | 38      |    |
| Deduct:Total share-based employee compensation expense determined under thefair value based method for all awards, net of related taxeffects |  |                           | (9,043  | )  |  |    | (1,716  | )  |  |    | (10,177 | )  |
| Netloss – proforma                                                                                                                     |  |                           | (10,568 | )  |  |    | (6,948  | )  |  |    | (35,096 | )  |
| Basicand diluted loss per share – asreported                                                                                           |  | £                        | (0.11   | )  |  | £ | (0.39   | )  |  | £ | (0.54   | )  |
| Basicand diluted loss per share – proforma                                                                                             |  | £                        | (0.17   | )  |  | £ | (0.14   | )  |  | £ | (0.76   | )  |
|                                                                                                                                              |

TheGroup used the Black-Scholes option pricing model to determine the fairvalue of grants during the years ended December 31, 2003, 2002 and2001. The following assumptions were applied in determining the proforma compensation cost calculatedabove:

|                               |  |        |  |        |  |         |  |  |  |  |  |  |  |  |
|-------------------------------|--|--------|--|--------|--|---------|--|--|--|--|--|--|--|--|
|                          |  | 2003   |  | 2002   |  | 2001    |
| Expecteddividendyield         |  | 0%     |  | 0%     |  | 0%      |
| Risk-freeinterestrate         |  | 2.61%  |  | 3.28%  |  | 5.05%   |
| Expectedlife ofoptions        |  | 4      |  | 4      |  | 2.8     |
| Expectedshare pricevolatility |  | 82.92% |  | 88.75% |  | 135.63% |
|                               |

Foreignexchange contracts

The Group accounts for foreign exchangecontracts under the provisions of SFAS No. 133,"Accounting for Derivative Instruments and HedgingActivities". The Group enters into foreign 

F-17

----

exchange contracts to manage the currencyrisks arising from operations in foreign locations. These contracts arenot designated as accounting hedges and the change in fair value isincluded in net loss.

|                                                                                                                                                           |  |                          |           |                   |  |           |           |        |  |        |           |        |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------------------------|-----------|-------------------|--|-----------|-----------|--------|--|--------|-----------|--------|--|--|
|                                                                                                                                                      |  | Amountof ForeignCurrency |
| Forwardforeign exchange contracts tobuy                    |  | HongKong dollars         |           | Singapore dollars |  | USdollars |
| **Outstanding at December 31,2003**                                                                                                                       |  |                     |      |              |  |      |      |   |  |   |      |   |
| Maturing in 0-3months                                                                                                                                     |  |                     | 1,950,000 |              |  |      | 1,550,000 |   |  |   | 2,278,000 |   |
| Maturingin 3-6months                                                                                                                                      |  |                     | —   |              |  |      | 600,000   |   |  |   | 406,000   |   |
| Maturingin 6-12months                                                                                                                                     |  |                     | —   |              |  |      | —   |   |  |   | 1,305,000 |   |
| Maturingin 12-18months                                                                                                                                    |  |                     | —   |              |  |      | —   |   |  |   | 278,000   |   |
| Total                                                                                                                                                     |  |                     | 1,950,000 |              |  |      | 2,150,000 |   |  |   | 4,267,000 |   |
| **Outstandingat December 31,2002**                                                                                                                        |  |                     | —   |              |  |      | —   |   |  |   | —   |   |
|                                                                                                                                                           |

AtDecember 31, 2003 and December 31, 2002, the Group had no outstandingforward foreign exchange contracts to sell foreign currency.

Recently issued but not yet adopted accountingpronouncements

In December 2003, the FASB issued arevision to Interpretation No. 46, "Consolidation ofVariable Interest Entities, an Interpretation of ARB No.51" ("FIN 46R"). FIN 46Rclarifies the application of ARB No. 51, "ConsolidatedFinancial Statements," to certain entities in which equityinvestors do not have the characteristics of a controlling financialinterest or do not have sufficient equity at risk for the entity tofinance its activities without additional subordinated financialsupport. FIN 46R requires the consolidation of these entities, known asvariable interest entities ("VIEs"), by theprimary beneficiary of the entity. The primary beneficiary is theentity, if any, that will absorb a majority of the entity'sexpected losses, receive a majority of the entity's expectedresidual returns, or both.

Among other changes, the revisions ofFIN 46R (a) clarified some requirements of the original FIN 46, whichhad been issued in January 2003, (b) eased some implementationproblems, and (c) added new scope exceptions. FIN 46R deferred theeffective date of the Interpretation for public companies, to the endof the first reporting period ending after March 15, 2004, except thatall public companies must at a minimum apply the provisions of theInterpretation to entities that were previously considered"special-purpose entities" under the FASBliterature prior to the issuance of FIN 46R by the end of the firstreporting period ending after December 15, 2003. The Group does notbelieve that the adoption of FIN 46R will have a material impact on itsconsolidated results of operations and financial position uponadoption.

|          |                       |
|----------|-----------------------|
| 3.  | Business combinations |

All acquisitions have been accounted for by the purchase method,with the excess of the purchase price over the estimated fair value ofthe net assets acquired recorded as goodwill. The results of eachoperation have been included in the consolidated financial results ofthe Group from the date of acquisition. Goodwill arising onacquisitions was amortized over five years on a straight-line basisthrough fiscal year 2001.

The following represents a discussionof the Group's acquisitions by year for the previous threeyears.

2003:

Acquisition of Travelbag

InJanuary 2003, the Group signed a purchase agreement to acquire theentire share capital of Travelbag Holdings Limited.("Travelbag") for gross consideration of£52,896,000, including acquisition costs of £291,000.Travelbag is a UK travel agency specializing in long-haul destinations.

F-18

----

This acquisition was completed on February7, 2003. The consideration consisted of cash of £37,737,000,deferred cash consideration of £3,000,000 and the issuance of3,537,134 ordinary shares with an aggregate market value of£12,336,000. The value of the ordinary shares issued wasdetermined based on the average market price of the Group'sshares over the two day periods before and after the terms of theacquisition were agreed and announced on January 21, 2003. The deferredcash consideration was paid on February 7, 2004 and is classified as acurrent liability. This £3,000,000 of consideration wasdiscounted to £2,823,000 at the acquisition date. At December 31,2003, this deferred consideration amounted to £2,985,000, withthe accretion of the discount of £162,000 to December 31, 2003recorded as interest expense.

Contingent consideration of£2,029,000 was also issued in connection with this acquisition.This consideration is contingent on whether ebookers is able to realizethe tax benefits associated with certain bonus payments to Travelbagexecutives prior to the acquisition. If this contingency occurs, theamount paid will be recorded as an additional cost of acquisition.

The acquisition was funded in part by a loan of £15,000,000from Barclays Bank PLC ("Barclays"), asdiscussed further in Note 9, and in part by the placing of 8,840,579shares of the Group, which raised £30,164,000, after issuancecosts of £336,000. The consolidated results of operations ofTravelbag from February 7, 2003 are included in ebookers results forthe year ended December 31, 2003.

The following table summarizesthe estimated fair values of the assets acquired and liabilitiesassumed at the date of acquisition.

|                                     |  |             |         |         |  |  |  |  |  |  |  |  |  |  |
|-------------------------------------|--|-------------|---------|---------|--|--|--|--|--|--|--|--|--|--|
|                                |  | £'000 |         |
| Goodwill                            |  |        | 27,228  |    |  |
| Intangibleassets                    |  |        | 34,000  |    |  |
| Tangible fixedassets                |  |        | 7,555   |    |  |
| Debtors                             |  |        | 1,225   |    |  |
| Cash                                |  |        | 34,706  |    |  |
| Currentliabilities                  |  |        | (41,618 | )  |  |
| Deferred incometaxes                |  |        | (10,200 | )  |  |
| Fairvalue of the net assetsacquired |  |        | 52,896  |    |  |
|                                     |

Twointangible assets were identified, namely the Travelbag brand and theBridge the World brand. These brands were valued at £34.0million, with an associated deferred tax liability of £10.2million. These brands will not be amortized since they are consideredto be of indefinite life, but will be assessed for impairment annuallyor more frequently if events or circumstances indicate that the assetmight be impaired.

As part of the purchase price allocation, aliability of £416,000 was included for the rental and otheroperating expenses associated with a vacant property. In the periodsince the acquisition, £50,000 of this liability was utilized.The Group expects that the remainder of this liability will be utilizedby fiscal 2006.

The following unaudited pro forma data summarizethe results of the operations for the year ended December 31, 2003 and2002, as if the acquisition of Travelbag had been completed as ofJanuary 1, 2002. The pro forma amounts are presented for illustrativepurposes and do not purport to be indicative of the results that wouldhave actually been obtained if the acquisition occurred as of thebeginning of the fiscal years or that may be obtained in the future.The principal pro forma adjustments relate to depreciation expense onfixed assets, the financing costs associated with the acquisition, theexclusion of stock compensation expense directly associated with thefinancing of the acquisition, and the exclusion of bonuses paid toTravelbag management on the acquisition by ebookers.

F-19

----

|                                     |  |                             |  |                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|-------------------------------------|--|-----------------------------|--|-----------------------------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                |  | 12months toDecember 31,2003 |  | 12 months toDecember31,2002 |  |
| Revenue                             |  | 69,832                      |  | 61,353                      |  |
| Netloss from continuingoperations   |  | (2,771)                     |  | (17,050)                    |  |
| Basicand diluted net loss pershare: |  | £(0.04)               |  | £(0.28)               |  |
|                                     |

2002:

There were no acquisitions during 2002.

2001:

MrJet AB

On March 27, 2001 ebookers plc purchasedMrJet AB, a Swedish company, for a purchase consideration of£990,000. SEK 455,266 (approximately £31,000) was in theform of cash, and shares to the value of SEK 14,083,874 (approximately£959,000) were issued, representing 2.67 percent of the issuedshare capital of ebookers plc, the equivalent of 1,208,961 ordinaryshares. Goodwill arising on consolidation of MrJet amounted to£562,000.

Gate Pacific Ltd.

On August30, 2001 ebookers plc acquired Gate Pacific Ltd., a holding companybased in Mauritius, from Mr. Dinesh Dhamija and Mrs. Tani Dhamija. Thepurchase consideration was $5,387.

Tecnovate Data andServices Private Ltd.

On September 1, 2001, Gate PacificLtd. acquired Technovate Data and Services Private Limited, aninformation technology services company based in Delhi, India. Thetotal purchase consideration of £104,000 consisted of cash of£25,352 and 81,126 ordinary shares of ebookers plc of 14p valuedat 97.97p.

The results of the operations of the above entitieshave been included in the income statement of the Group from the datesof acquisition. The following unaudited pro forma data summarize theresults of operations for the periods indicated as if the acquisitionof MrJet AB and Gate Pacific Ltd. had been completed as of January 1,2000. The pro forma data give effect to actual operating results priorto the acquisition, adjusted to include the pro forma effect ofamortization of intangibles and income taxes. These pro forma amountsdo not purport to be indicative of the results that would have actuallybeen obtained if the acquisition occurred as of the beginning of thefiscal year, or that may be obtained in the future.

Proformainformation

|                                     |  |                                    |  |  |  |  |  |  |  |  |
|-------------------------------------|--|------------------------------------|--|--|--|--|--|--|--|--|
|                                |  | 12months to December 31,2001       |  |
|                                |  | £'000except per shareamounts |  |
| Revenues                            |  | 19,550                             |  |
| Netloss                             |  | (28,209)                           |  |
| Basic and diluted net loss pershare |  | £(0.60)                      |  |
|                                     |

F-20

----

4.    Allowance for doubtfulaccounts

|                            |  |             |       |              |  |             |       |         |  |        |         |        |  |  |
|----------------------------|--|-------------|-------|--------------|--|-------------|-------|---------|--|--------|---------|--------|--|--|
|                       |  | December31, |       | December 31, |  | December31, |
|                       |  | 2003        |       | 2002         |  | 2001        |
|                       |  | £'000 |       | £'000  |  | £'000 |
| Balanceat beginning ofyear |  |        | 1,070 |         |  |        | 354   |    |  |   | 242     |   |
| Providedfor inyear         |  |        | 360   |         |  |        | 754   |    |  |   | 112     |   |
| Utilized inyear            |  |        | (984  | )       |  |        | (38   | )  |  |   | — |   |
| Balanceat end ofyear       |  |        | 446   |         |  |        | 1,070 |    |  |   | 354     |   |
|                            |

|          |                     |
|----------|---------------------|
| 5.  | Othercurrent assets |

|                                            |  |             |       |             |  |        |         |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|--------------------------------------------|--|-------------|-------|-------------|--|--------|---------|--------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                       |  | December31, |       | December31, |  |
|                                       |  | 2003        |       | 2002        |  |
|                                       |  | £'000 |       | £'000 |  |
| Receivablesfrom advertising andcommissions |  |        | 2,201 |        |  |   | 778     |   |  |
| Advancepayment to suppliers                |  |        | 34    |        |  |   | 358     |   |  |
| Valueaddedtax                              |  |        | 1,018 |        |  |   | 637     |   |  |
| Deposits                                   |  |        | 114   |        |  |   | 191     |   |  |
| Taxation                                   |  |        | 122   |        |  |   | — |   |  |
| Othercurrentassets                         |  |        | 442   |        |  |   | 453     |   |  |
|                                       |  |        | 3,931 |        |  |   | 2,417   |   |  |
|                                            |

|          |                              |
|----------|------------------------------|
| 6.  | Property,plant and equipment |

Property, plant and equipment consists ofthefollowing:

|                                        |  |             |        |             |  |        |         |         |  |  |
|----------------------------------------|--|-------------|--------|-------------|--|--------|---------|---------|--|--|
|                                   |  | December31, |        | December31, |
|                                   |  | 2003        |        | 2002        |
|                                   |  | £'000 |        | £'000 |
| Property                               |  |        | 3,638  |        |  |   | — |    |
| Leaseholdimprovements                  |  |        | 1,759  |        |  |   | 1,440   |    |
| Furniture,fittings and officeequipment |  |        | 2,170  |        |  |   | 1,718   |    |
| Computer andcommunicationsequipment    |  |        | 15,382 |        |  |   | 8,665   |    |
| Total                                  |  |        | 22,949 |        |  |   | 11,823  |    |
| Lessaccumulateddepreciation            |  |        | (6,860 | )      |  |   | (8,325  | )  |
| Plantand equipment,net                 |  |        | 16,089 |        |  |   | 3,498   |    |
|                                        |

At.December 31, 2003 and 2002, assets under capital leases amounted to£2,991,000 and £528,000, respectively. Depreciation expensein 2003 was £4,310,000 (2002: £4,546,000, 2001:£4,025,000).

7.    Goodwill

Goodwill consists ofthefollowing:

|                              |  |             |  |             |  |  |  |  |  |  |
|------------------------------|--|-------------|--|-------------|--|--|--|--|--|--|
|                         |  | December31, |  | December31, |
|                         |  | 2003        |  | 2002        |
|                         |  | £'000 |  | £'000 |
| Goodwill,gross               |  | 45,512      |  | 18,408      |
| Less:accumulatedamortization |  | (5,733)     |  | (5,733)     |
| Goodwill,net                 |  | 39,779      |  | 12,675      |
|                              |

Duringfiscal 2003, the Group acquired Travelbag as discussed in Note 3, whichresulted in the recognition of £27,228,000 of goodwill. Alsoduring the year, the Group recorded a goodwill write-down of£124,000 following the liquidation of one of its Germansubsidiaries.

F-21

----

In fiscal year 2001, the Groupreassessed the carrying value of its goodwill in respect of theacquisitions of Airways MIC AB and MrJet. The Group determined thefuture cash flows expected to result from the operation of theseentities and compared these cash flows to the carrying value of the netassets. As this test indicated that there was an impairment, the Groupreassessed the fair value of these entities based on the net presentvalue of estimated future cash flows, using a discount rate of 10percent, and compared this fair value to the carrying value of the netassets. As the fair value was less than the carrying value, there wasan impairment of goodwill of £784,000.

8.    Accruedexpenses and other current liabilities

Accrued expenses andother current liabilities consist of thefollowing:

|                               |  |             |  |             |  |  |  |  |  |  |
|-------------------------------|--|-------------|--|-------------|--|--|--|--|--|--|
|                          |  | December31, |  | December31, |
|                          |  | 2003        |  | 2002        |
|                          |  | £'000 |  | £'000 |
| Currentportion of loanpayable |  | 2,315       |  | —     |
| Corporationtax                |  | 12          |  | 143         |
| Taxation and socialsecurity   |  | 1,301       |  | 686         |
| Accrued accountspayable       |  | 3,488       |  | 3,109       |
| Capital leasepayable          |  | 666         |  | 200         |
| Deferredconsideration         |  | 2,985       |  | —     |
| Clientdeposits                |  | 2,248       |  | —     |
| Other                         |  | 1,910       |  | 1,865       |
| Total                         |  | 14,925      |  | 6,003       |
|                               |

9.    Longterm liabilities

|                                                         |  |             |        |             |  |        |         |        |  |  |
|---------------------------------------------------------|--|-------------|--------|-------------|--|--------|---------|--------|--|--|
|                                                    |  | December31, |        | December31, |
|                                                    |  | 2003        |        | 2002        |
|                                                    |  | £'000 |        | £'000 |
| Longtermdebt                                            |  |        | 13,685 |        |  |   | — |   |
| Capitalleaseobligations                                 |  |        | 2,102  |        |  |   | — |   |
| Other longtermliabilities                               |  |        | 2,021  |        |  |   |    |   |
|                                                    |  |        | 17,808 |        |  |   | — |   |
|                                                    |  | £     | '000   |        |  |
| Longterm debt is repayable as follows:                  |  |
| Due within oneyear (included within currentliabilities) |  |        | 2,315  |        |  |
| Due between one to twoyears                             |  |        | 4,091  |        |  |
| Due between two to threeyears                           |  |        | 3,939  |        |  |
| Due between three to fouryears                          |  |        | 3,780  |        |  |
| Due within four to fiveyears                            |  |        | 1,875  |        |  |
| Totalpayments                                           |  |        | 16,000 |        |  |
|                                                    |  |
| Capitallease obligations are repayable as follows:      |  |
| Duewithin one year (included within currentliabilities) |  |        | 666    |        |  |
| Due between one to twoyears                             |  |        | 958    |        |  |
| Due between two to threeyears                           |  |        | 1,004  |        |  |
| Due between three to fouryears                          |  |        | 140    |        |  |
| Totalpayments                                           |  |        | 2,768  |        |  |
|                                                         |

F-22

----

Thelong-term debt relates to a facilities agreement with Barclays drawndown in February 2003, establishing a £15 million term loan and a£10 million revolving credit facility. As of December 31, 2003,the £15 million term loan was outstanding, with £1.9million due within one year. The term loan is repayable in equalbiannual installments with the first payment due on July 31, 2004 andthe last due on January 31, 2008. Interest on the term loan and anyamounts outstanding on the revolving credit facility is currentlypayable at a rate of LIBOR plus 2.25% per year. The long-termdebt also includes the long-term element of loans to finance thepurchase of computer equipment bought in the year. This was £0.6million as at December 31, 2003.

On August 18, 2003, the Groupand Barclays agreed to amend certain of the financial covenantscontained in the facilities agreement. At that time, the Group alsoagreed not to borrow under the revolving credit facility withoutBarclays prior consent. On October 30, 2003, the Group and Barclaysagreed to further amendments to those same covenants and certainadditional covenants. The most restrictive financial covenant relatesto an adjusted profit determined under the terms of the agreement whichneeds to be met for the year ended December 31, 2003 and each quarterthereafter based on the results for the twelve months ending thatquarter.

The capital lease obligations relate to leases forcomputer and communications equipment that were entered into duringfiscal 2003.

The long term deferred income relates to upfrontfees received from our Global Distribution System("GDS") suppliers that are being recognizedover the life of the related contracts.

10.    Incometaxes

The corporation tax provisions included in theconsolidated statement of operations and the corporation tax payable inthe consolidated balance sheet have been determined as if the Group wasa separate taxpayer. The Group, on a separate entity basis, incurrednet tax losses in the fiscal years 2001 to 2003. The consolidated lossbefore income tax consistedof:

|        |  |        |        |         |  |        |         |         |  |        |         |         |  |  |
|--------|--|--------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|   |  | 2003   |        | 2002    |  | 2001   |
| UK     |  |   | (8,538 | )  |  |   | (20,016 | )  |  |   | (24,521 | )  |
| Non-UK |  |   | 1,730  |    |  |   | 1,213   |    |  |   | (361    | )  |
|   |  |   | (6,808 | )  |  |   | (18,803 | )  |  |   | (24,882 | )  |
|        |

Thecurrent consolidated (provision)/benefit for income taxes consistedof:

|        |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|--------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|   |  | 2003   |         | 2002    |  | 2001   |
| UK     |  |   | — |    |  |   | — |    |  |   | — |    |
| Non-UK |  |   | (126    | )  |  |   | (155    | )  |  |   | (75     | )  |
|   |  |   | (126    | )  |  |   | (155    | )  |  |   | (75     | )  |
|        |

Theprovision for income taxes is different from that which would beobtained by applying the UK statutory income tax rate to loss beforeincome taxes due to thefollowing:

|                                        |  |        |         |         |  |        |         |         |  |        |        |         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|----------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                   |  | 2003   |         | 2002    |  | 2001   |         |
| Taxbenefit at UK statutory rate of30%  |  |   | 2,040   |    |  |   | 5,641   |    |  |   | 7,465  |    |  |
| Taxdifferential on non-UKearnings      |  |   | 26      |    |  |   | 32      |    |  |   | 27     |    |  |
| Non-deductiblestockcompensation        |  |   | (1,543  | )  |  |   | (4,118  | )  |  |   | (18    | )  |  |
| Othernon-deductiblecosts               |  |   | 339     |    |  |   | (5      | )  |  |   | (1,519 | )  |  |
| Exemptincome                           |  |   | 1,025   |    |  |   | 85      |    |  |   | 20     |    |  |
| Increasein valuationallowance          |  |   | (2,014  | )  |  |   | (1,751  | )  |  |   | (6,089 | )  |  |
| Non-deductibleconsolidationadjustments |  |   | — |    |  |   | (39     | )  |  |   | 28     |    |  |
| Other                                  |  |   | — |    |  |   | — |    |  |   | 11     |    |  |
|                                   |  |   | (126    | )  |  |   | (155    | )  |  |   | (75    | )  |  |
|                                        |

F-23

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Deferred tax liabilities at December 31,2003 and 2002were:

|                                                      |  |        |         |         |  |        |         |         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|------------------------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                                 |  | 2003   |         | 2002    |  |
| Deferredtax assets:                                  |  |
| Property, plant and equipment dueto depreciation     |  |   | 755     |    |  |   | 757     |    |  |
| Netoperating loss carriedforward                     |  |   | 16,536  |    |  |   | 14,520  |    |  |
| Liabilityin respect of timingdifferences             |  |   | (100    | )  |  |   | — |    |  |
| GrossDeferred taxassets                              |  |   | 17,191  |    |  |   | 15,277  |    |  |
| Less valuationallowance                              |  |   | (17,191 | )  |  |   | (15,277 | )  |  |
| Netdeferred taxassets                                |  |   | — |    |  |   | — |    |  |
| Deferredtax liability in respect of intangibleassets |  |   | (10,200 | )  |  |   | — |    |  |
|                                                      |

Thenet change in the total valuation allowance for the year ended December31, 2003 was an increase of £2,014,000 (2002£1,750,000)

As of December 31,2003 the Group has availablefor income tax purposes approximately £55,120,000 (2002£48,400,000) in the UK or European net operating loss carryforwards have an indefinite life subject to limitations imposed in theevent of change in the business carried on by the loss entities.

The Group has not recognized a deferred tax liability ofapproximately £254,000 for the undistributed earnings ofit's 100% owned non-UK subsidiaries to the extent thatthey are permanently reinvested in the Group's non-UKsubsidiaries. A tax charge will arise when the Group expects that itwill recover those distributable earnings in a taxable manner, such asthrough receipt of dividends or the sale of the investments.

11.    Shareholders' equity

ShareReorganization

2001

On April 4, 2001, the Group,by ordinary resolution of its shareholders, consolidated all itsexisting authorized and issued share capital from shares of par valueof £0.028 per share to shares of par value of £0.14 pershare. The number of shares referred to below reflects thisconsolidation.

Share Issuances

2003

On February 7, 2003, 12,377,713 ordinary shares of £0.14 eachwere issued for £42,500,000 in connection with the purchase ofTravelbag Holdings Limited. Of these shares, 3,537,134 were issueddirectly to Travelbag and the remaining 8,840,579 were placed in themarket and the cash raised was used to acquire Travelbag.

OnMarch 25, 2003, 7,179 ordinary shares of £0.14 each were issuedto three Non-Executive Directors, Mr. Sudhir Choudhrie, Mr, JeffreySampler and Mr. John Donaldson, in accordance with letters ofappointment. The value of this remuneration was £16,000.

During fiscal 2003, 2,484,720 ordinary shares of £0.14 eachwere issued relating to the exercise of options under the ebookers plcExecutive Share Option Scheme 1999. The consideration paid for theseordinary shares was £2.9 million.

2002

On May 17,2002, ebookers issued 3,000,000 ordinary shares of £0.14 each toFlightbookers Investments Limited for a total consideration of£5,253,000. Under the terms of a call option agreement, set in1999, the number of shares delivered in satisfaction of the exerciseprice was 

F-24

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determined according to the average closingprice quoted on Nasdaq for the period October 5, 2000 to November 1,2000, excluding the two highest and two lowest closing prices in thisperiod. This was the final part of the consideration relating to thepurchase of Flightbookers Limited.

On October 17, 2002, 11,654ordinary shares of £0.14 each were issued to two Non-ExecutiveDirectors, Mr. Sudhir Choudhrie and Mr., Jeffrey Sampler, in accordancewith letters of appointment. The value of this remuneration was£2,844.

During fiscal 2002, 216,556 ordinary shares of£0.14 each were issued relating to the exercise of options underthe ebookers plc Executive Share Option Scheme 1999. The considerationpaid for these ordinary shares was £450,000.

2001

On April 3, 2001, 1,208,961 ordinary shares of £0.14 each wereissued as consideration for the purchase of MrJet AB. The shares wereissued for £959,000.

On August 21, 2001, 48,675 ordinaryshares of £0.14 each were issued for £47,687 as theconsideration for the purchase of Technovate Data and Services PrivateLimited (now called Tecnovate eSolutions Private Limited). On September28, 2001, a further 32,451 ordinary shares of £0.14 each wereissued for £31,791 as consideration for this purchase.

During fiscal 2001, 253,900 ordinary shares of £0.14 each wereissued for £359,000.

12.    Share-basedcompensation

As described in Note 11, the Group reorganized itsauthorized and issued share capital. The numbers of shares, nominalvalues and option exercise prices below reflect the consolidation.

On March 3, 1999, the Group's predecessor entered into anagreement with Dr. Sanjiv Talwar, whereby a series of four options weregranted to Dr. Talwar. These options have an exercise period expiringon the day before the tenth anniversary of the grant date. Each of thefirst and second series of these options, which were exercised inFebruary 2003, entitled Dr. Talwar to acquire 0.75 per cent of theordinary share capital of the Group on the business day immediatelypreceding the date of exercise. The fourth series was exercised in July2003 and entitled Dr. Talwar to acquire 1 per cent of the ordinaryshare capital on the business day immediately preceding the date ofexercise. The third option currently exercisable entitles Dr. Talwar toacquire a number of ordinary shares equal to 1 per cent of the ordinaryshare capital of the Group on the business day immediately precedingthe date of exercise. The exercise price of the options is $150,000 forthe first series; $200,000 for the second series; and £2.18 and£0.58 per share for the third and fourth series, respectively,which was based on 50 per cent of the market value of the Group'sordinary shares on the date the options vested in May 2001 and November2001. Pursuant to an agreement dated March 3, 1999, the Group'spredecessor also transferred the rights to 2,001,430 shares of theGroup to Dr. Talwar as compensation under his employment contract.

The exercise of several tranches during fiscal 2003 resulted in themeasurement date of these options being fixed and final stockcompensation expense being recorded. Stock compensation expense in2003, 2002 and 2001 relating to Dr. Talwar amounted to£1,623,000, £4,604,000 and £26,000, respectively.

The Group adopted the ebookers plc Executive Share Option Scheme("ESOS") on October 21, 1999. This plan setsout the specific criteria used to grant options to employees. Insummary, options are broadly categorized into two categories. Employeesjoining before the initial public offering in November 1999 weregranted Series A and Series B options. Series A options had an optionprice equal to 50 percent of the initial public offering price and areexercisable in equal tranches on the first, second, third and fourthanniversaries of the commencement of employment. Series B options hadan option price equal to the initial public offering price and areexercisable in equal tranches on the second, third, fourth and fifthanniversaries of commencement of employment. Employees joining afterthe initial public offering were granted one series of options. Thisseries of options had an option price equal to the market price at thedate of joining and is exercisable in equal tranches on the first,second, third and fourth anniversaries of the commencement ofemployment. These options have an 

F-25

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exercise period expiring on the day beforethe tenth anniversary of the grant date. On July 14, 2000 the Grouprepriced its options. Employees who joined before the initial publicoffering had their Series A options repriced to $0.70. Employees whojoined after the initial public offering had their options repriced to$0.90 for half of the first tranche and $1.80 for half of the firsttranche and all other tranches unless their original option price waslower than the repriced options.

During fiscal year 2002, shareoptions with exercise prices in dollars (for the purchase of theGroup's ADRs quoted on the Nasdaq) were converted to exerciseprices in pounds using the exchange rate prevailing at the date of theoriginal grant. These options are now exercisable for ordinary shareslisted on the London Stock Exchange and not ADRs and are accounted forunder variable plan accounting.

The Rules of the ESOS weremodified on July 30, 2003. For options granted after this date, theGroup reserves the right to allow employees to exercise options in acashless manner and just issue shares equal in value to the differencebetween the option price and the market price. This resulted in theoptions issued subsequent to July 30, 2003 being accounted for undervariable plan accounting. Stock compensation expense in 2003, 2002 anda credit in 2001 under the ESOS, taking into account the abovemodifications, amounted to £903,000, £1,045,000 and£160,000, respectively.

On October 21, 1999, the Groupentered into an option agreement with the Group's Chief ExecutiveOfficer, Dinesh Dhamija, whereby Mr. Dhamija was granted a series offive options. These options have an exercise period expiring on the daybefore the tenth anniversary of the grant date. Each of these optionsentitles Mr. Dhamija to acquire 1 percent of the ordinary share capitalof the Group on the business day immediately preceding the date ofexercise. All these options have vested and are currently exercisable.The exercise price of the options is: $100,000, $200,000, $300,000,$350,000, and $400,000 for the five options, respectively. Stockcompensation expense in 2003, 2002 and 2001 relating to Mr. Dhamijaamounted to £2,875,000, £8,074,000 and £222,000,respectively.

On October 25, 1999, the Group granted shareoptions to its Non-Executive Directors under the terms of theirengagement. These options have an exercise period expiring on the daybefore the tenth anniversary of the grant date. Stock compensationexpense in 2003, 2002, and a credit in 2001 on the options granted tothe Non-Executive Directors amounted to £0, £3,000 and£50,000, respectively.

Option activity under the plans hasbeen asfollows:

|                                                                       |  |                 |  |                                        |  |  |  |  |  |  |
|-----------------------------------------------------------------------|--|-----------------|--|----------------------------------------|--|--|--|--|--|--|
|                                                                  |  | Numberof shares |  | Weighted averageexercise pricepershare |
| Outstanding, December 31,2000                                         |  | 5,912,598       |  | £3.30                            |
| Grantedbelow market price (weighted average fair value of£0.85) |  | 119,658         |  | £0.59                            |
| Grantedabove market price (weighted average fair value of£0.85) |  | 3,860           |  | £4.17                            |
| Grantedat marketprice                                                 |  | 258,412         |  | £0.68                            |
| Forfeited                                                             |  | (730,730)       |  | £2.88                            |
| Outstanding,December 31,2001                                          |  | 5,563,798       |  | £3.18                            |
| Grantedbelow market price (weighted average fair value of£3.22) |  | 1,700,228       |  | £2.22                            |
| Grantedabove market price (weighted average fair value of£2.59) |  | 1,363,709       |  | £2.80                            |
| Exercised                                                             |  | (244,093)       |  | £1.99                            |
| Forfeited                                                             |  | (584,574)       |  | £2.52                            |
| Outstanding,December 31,2002                                          |  | 7,799,068       |  | £2.99                            |
| Grantedbelow market price (weighted average fair value of£3.54) |  | 2,013,805       |  | £3.25                            |
| Grantedabove market price (weighted average fair value of£4.40) |  | 3,842,562       |  | £3.54                            |
| Exercised                                                             |  | (2,485,460)     |  | £1.81                            |
| Forfeited                                                             |  | (542,330)       |  | £3.58                            |
| Outstanding,December 31,2003                                          |  | 10,627,645      |  | £2.69                            |
|                                                                       |

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Additionalinformation regarding options outstanding as of December 31, 2003 is asfollows:

|                         |  |                    |            |                                                 |  |                                       |      |                   |  |                                       |      |        |  |        |           |        |  |         |      |        |  |  |
|-------------------------|--|--------------------|------------|-------------------------------------------------|--|---------------------------------------|------|-------------------|--|---------------------------------------|------|--------|--|--------|-----------|--------|--|---------|------|--------|--|--|
|                    |  | Optionsoutstanding |            | Optionsexercisable                              |
| Rangeofexerciseprice    |  | Numberoutstanding  |            | Weightedaverageremainingcontractuallife (years) |  | Weightedaverageexercise pricepershare |      | Numberexercisable |  | Weightedaverageexercise pricepershare |
| £0.00-£1.25 |  |               | 3,295,323  |                                            |  |                                  | 5.8  |              |  | £                               | 0.24 |   |  |   | 3,280,736 |   |  | £ | 0.24 |   |
| £1.26-£3.00 |  |               | 2,646,615  |                                            |  |                                  | 8.2  |              |  | £                               | 2.38 |   |  |   | 902,142   |   |  | £ | 2.24 |   |
| £3.01-£4.00 |  |               | 1,667,478  |                                            |  |                                  | 8.5  |              |  | £                               | 3.38 |   |  |   | 380,726   |   |  | £ | 3.36 |   |
| £4.01-£4.44 |  |               | 1,232,313  |                                            |  |                                  | 9.7  |              |  | £                               | 4.36 |   |  |   | 43,206    |   |  | £ | 4.23 |   |
| £4.45-£6.52 |  |               | 1,785,916  |                                            |  |                                  | 5.9  |              |  | £                               | 9.29 |   |  |   | 157,740   |   |  | £ | 5.91 |   |
| £0.00-£6.52 |  |               | 10,627,645 |                                            |  |                                  | 7.88 |              |  | £                               | 2.69 |   |  |   | 4,764,550 |   |  | £ | 1.09 |   |
|                         |

Certainoptions granted are based on a percentage of shares outstanding at theexercise date. The amounts in the table above are calculated using thetotal number of outstanding shares at December  31, 2003.

At December 31, 2003, of the 9,415,045 shares reserved for issuance,2,306,726 shares were remaining and available for grant as shareoptions.

13.    Loss per share

All ordinary sharesunder option as of December 2003, 2002 and 2001 were consideredanti-dilutive as a result of the loss recorded by the Group each yearand are therefore not included in the computation of diluted earningsper ordinary share.

14.    Related parties

No materialrelated party transactions have taken place in fiscal year 2003 or 2002and no significant transactions with directors or other executiveofficers of ebookers plc have occurred during the period.

Nomaterial related party transactions took place in fiscal year 2001, andno significant transactions with directors or other executive officersof ebookers plc, occurred during the previous period other than thepurchase of Callbookers Limited from Flightbookers S.A.R.L., a companycontrolled by Dinesh Dhamija, a director of ebookers plc, and thepurchase of Gate Pacific Limited from Dinesh Dhamija and Tani Dhamija,both directors of ebookers plc. Callbookers Limited was valued by anindependent party for the purpose of the acquisition. Gate PacificLimited was valued at the cost of registering a new company inMauritius.

Also, in October 2001, the Group purchased certainassets from the liquidator of Lawson Interline Travel Limited for£160,000. In order to finance part of this, Firdaus Ruttousha, adirector of Flightbookers Ltd., made a loan on an arm's lengthbasis of £40,000 to ebookers plc. This loan carried an interestrate of 2 percent above the base rate. It was repaid in2002.

15.    Commitments and contingencies

The Grouphas non-cancelable operating leases, primarily for computer hardware,that expire at various dates up to September 30, 2004. The Group alsohas an operating lease that expires in 2005 for the use of its headoffice in London. The annual rent under the lease is £391,800,which may be increased in 2005 based on market rates at that time. Rentexpense for fiscal years 2003, 2002 and 2001 was £2,480,000,£1,311,383 and £1,029,647, respectively. Future minimumlease payments under non-cancelable operating leases at December 31,2003 are as follows:

F-27

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|              |  |                             |       |                  |  |                  |    |        |  |        |       |        |  |  |
|--------------|--|-----------------------------|-------|------------------|--|------------------|----|--------|--|--------|-------|--------|--|--|
|         |  | Landandbuildings£'000 |       | Other£'000 |  | Total£'000 |
| 2004         |  |                        | 1,892 |             |  |             | 52 |   |  |   | 1,943 |   |
| 2005         |  |                        | 1,348 |             |  |             | 18 |   |  |   | 1,366 |   |
| 2006         |  |                        | 1,123 |             |  |             | 11 |   |  |   | 1,134 |   |
| 2007         |  |                        | 1,059 |             |  |             | 6  |   |  |   | 1,065 |   |
| 2008         |  |                        | 1,157 |             |  |             | 4  |   |  |   | 1,162 |   |
| 2009andafter |  |                        | 2,464 |             |  |             | 5  |   |  |   | 2,469 |   |
| Total        |  |                        | 9,043 |             |  |             | 96 |   |  |   | 9,139 |   |
|              |

TheGroup had capital commitments of £511,000 at the end of thefinancial year (2002: £nil).

As part of the nature of theindustry, the Group provides bonds and guarantees to various partiesincluding the Civil Aviation Authority, the Association of BritishTravel Agents and the International Association of Travel Agents. Theamount guaranteed at 31 December 2003 was £12,654,000.

AtDecember 31, 2003, the Group had outstanding letters of credit of$20,000 and unused letters of credit of £11,000. The letters ofcredit typically act as a guarantee of payment to travel partners andthe relevant travel authorities. These letters of credit have not beendrawn upon as at December 31, 2003.

From time to time, the Groupmay become involved in litigation in the normal course of business.Management is not aware of any threatened litigation or unassertedclaims that would have a material effect on the Group's financialcondition, results of operations, and cash flows.

16.    Minority Interest

On September 30, 2003,Kipotechniki BVBA ("Kipotechniki") agreed toinvest in ebookers' Indian Business Process Outsourcingsubsidiary, Tecnovate eSolutions Private Limited("Tecnovate"), which provides back officeservices and administration to the ebookers group. Under the terms ofthe agreement, Kipotechniki agreed to invest $10,000,000 by acquiring353,010 shares in Tecnovate at $28.32 per share, representing6.25% of the enlarged share capital. The shares were to beissued in two equal tranches, with each tranche to be issued on receiptof an installment of $5,000,000.

The first installment waspayable immediately and has been received. Kipotechniki acquired176,505 shares in Tecnovate at $28.32 per share, representing3.125% of the then enlarged share capital as a result. Thispartial disposal of Tecnovate has resulted in a profit of£2,840,000, which has been recognized in Other Income in theConsolidated Income Statement. The Group has not recognized a deferredtax liability of approximately £150,000 in respect of thispartial disposal, for the undistributed earnings of Gate PacificLimited, a 100 percent owned non-UK subsidiary that is in turn theparent company of Tecnovate, because the Group currently does notexpect those unremitted earnings to become taxable to the Group in theforeseeable future.

The second installment was payable byDecember 31, 2003 but has not been received as of the date of thisdocument, and therefore the second tranche of shares has yet to beissued. As a result, ebookers owns 96.875% of Tecnovate atDecember 31, 2003. We are in discussions with Kipotechniki regardingthe terms of this second installment.

The September 30, 2003agreement also specified that if a change of control of ebookers wereto occur, ebookers and Kipotechniki would have the right, in theirabsolute discretion, to require the sale back to ebookers: (1) withinthe period from October 1, 2003 to June 30, 2004, the subscriptionshares acquired at the date of change of control, at a price of 125percent of the original subscription price; (2) from July 1, 2004, thesubscription shares, at an amount equal to their fair value. At thistime ebookers believes that a change in control is remote and thattherefore the fair value of the put option is immaterial.

F-28

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17.    Subsequent events

OnMarch 10, 2004, Travelbag Limited, a 100% owned subsidiary ofebookers plc, sold The Adventure Company (a division of TravelbagLimited) for a cash consideration of £3.1 million (plus retainedcash in the business of £0.6 million). In 2003, The AdventureCompany recorded revenues of £1.6 million and gross sales of£5.4 million.

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