Expedia Inc., the world's largest online travel agency, reported third-quarter net income fell by 4.8 percent as airline revenue fell and sales of vacation packages to Las Vegas and Hawai'i declined.

The company said profit slipped to $94.8 million from $99.6 million a year earlier. It said the travel package business fell 5 percent.

Bloomberg News reported Expedia expects air fares to increase in 2009, the first time the industry has seen higher ticket prices during a recession.