Consolidators: Can You Get A Fare Deal?
Sunday, August 21, 2005
Finding a so-called consolidator ticket -- one of those cheap international fares that you can't buy directly from an airline -- has never been a sure thing.
Not that long ago, frugal travelers who weren't afraid of taking a bit of a risk would turn to the tiny ads in newspaper travel sections promising tickets to exotic locales for next to nothing. There was an element of danger: These firms weren't exactly name-brand enterprises, and who knew how long they'd stay in business. But the rewards -- Bombay for $825! Lima for $398! -- were worth it.
Now, a glance through a Sunday travel section shows that these one-inch ads that once filled columns are now considerably fewer, leaving consumers to wonder whether consolidator fares still exist and where they should go to find them.
First the good news: The deals are still out there, particularly on long-haul flights. But deep discounts are drying up in many markets, especially to Western Europe, and their long-term survival is not assured. As for locating these fares, the Internet is making inroads, but old-fashioned humans -- your local travel agents -- still control the market.
What They Are
The symbiotic relationship of consolidators to airlines has quietly existed for decades. It evolved from a long-time agreement between most major airlines through the International Air Transport Association (IATA) that basically fixes prices on international routes. But carriers needed a way to get rid of unsold seats.
Enter the consolidator. The carriers sell excess itinerary to consolidators, offering them generous commissions of as much as 40 percent in exchange for agreeing to sell a large volume of tickets. Consolidators in turn offer cheaper-than-published fare tickets by rebating part of these commissions to the consumer. (Domestic fares are generally not included because prices are not regulated and are already rock-bottom in many popular markets.) Airlines guard how many seats they sell through consolidators, but according to statistics provided by the United States Air Consolidators Association (USACA), a trade organization that represents top consolidators, its 12 members alone generate $2.25 billion in air ticket sales annually.
Most of the largest, oldest consolidators, including Skylink, Trans Am Travel, DER and Sky Bird, don't sell their tickets directly to the consumer. Instead, they work through discounters (also called bucket shops) and retail travel agents, who make money by adding their own commission to the sales price.
The discounted tickets work much like published fare tickets. Whether issued as e-tickets or paper tickets, they physically look the same, except the price is not usually printed on them. They are often more liberal than published fare economy tickets, requiring no advance purchase and no Saturday-night stay. Trips usually can last longer than 30 days, typically the maximum for the cheapest airline fare. And while the best fares are available for travel far in the future, it's sometimes possible to get cheap tickets on short notice.
There are also downsides. Other airlines often won't honor consolidator-issued tickets, so if you get caught in a situation where you need to switch your ticket to another airline, you may be out of luck. Kelly Monaghan, author of "Air Travel's Bargain Basement: The International Directory of Consolidators, Bucket Shops and Other Sources of Discount Travel," noted in an interview that many consolidator tickets are nonrefundable and nonexchangeable, and that consumers must often pay up to get frequent-flier miles and to have the option to change flight times or dates. "Your willingness to live with restrictions will tend to lower your fare," Monaghan said.
Priscilla Myers, owner of Executive Travel & Tours in McLean, books about 35 consolidator tickets a year. She said she counsels her clients to make sure the savings are worth the restrictions. "If you're going to Beijing and you get sick and have to go home early, you don't want to have to buy a new ticket," she said. "If it's a $40 price difference, I usually say, 'Let's do a regular ticket.' "
Myers and several other local travel agents said they work only with well-known, reputable consolidators that have been in business for many years. "You have to be careful about who you are dealing with," said Lynda Maxwell, owner of Destinations Inc., a travel agency in Ellicott City that books about $300,000 a year in consolidator tickets. "For example, I won't deal with consolidators that don't take credit cards."
Most of the top consolidators have been in business for 10 years or longer. In the past decade, only one well-known consolidator, D.C.-based Euram Flight Centre, has gone suddenly bankrupt, stranding hundreds of travelers, many of them area residents. But consumers who deal with discounters -- basically travel agents who take a smaller cut of the commission than a traditional travel agent -- may be taking a bigger risk for a bigger payoff. Many small discounters, or ethnic travel agencies, exist on a razor-thin profit margin. If demand dips, it's easy for them to get into trouble.