All About Consolidator Airfares

Posted by Andrea on Monday, October 06, 2008

By Andrea Bennett

Part one of a two part article

They're elusive. The airlines don't like to talk about them (we asked). And determining their legitimacy from among the myriad websites that claim to specialize in them is a Herculean task. We're talking about consolidator fares, those secret airfares the airlines release in limited "buckets" to companies that re-sell them for big. Yes, they do still exist and you can get them, but as with any purchase (such as “grey market” electronics), you'll always trade something for the price break. There are reliable ways to get them, just as there are ways to get burned. And just because they're specially negotiated deals doesn't mean you might not be able to find a better published fare on your own.

The Backstory

To understand what consolidator fares mean today, you'll need a little history. Decades ago, it became clear to airlines that only selling highly visible, published airfares to travel agents and consumers made it easy for competing airlines to beat their fares and make off with their customers. To ensure they could fill up less popular flights, airlines began quietly selling discounted seats through consolidators. They reasoned that a little revenue per seat was better than none, and because the discounted prices weren’t published, other airlines wouldn’t be able to swoop in and drive down overall prices. You’d often find these fire sale fares in ethnic storefront travel agencies or even bodegas, which offered them only sporadically. According to Bob Harrell of New York airline consultancy Harrell Associates, the airlines employed plenty of tactics to get around pre-deregulation rules about tariffs, which required large numbers of seats sold this way to be part of a tourism promotion. “They’d print up five brochures, pass them around, and call it a tour,” he says.


Consolidators Today

Consolidators have come a long way since those early, often risky times. Airlines now see consolidators as a reliable distribution channel, negotiating annual contracts with them, establishing revenue targets, and tightly controlling ticket sales through a specific kind of booking class, or “bucket.” If you were wondering, consolidators and bucket shops are essentially the same thing, though the name, like the practice, has been refined over time. The fares are also known as “private” and “bulk” fares. But for the record, not every unpublished fare is a consolidator fare; military discounts, corporate discounts, and other specially negotiated fares – such as cruise and package fares – are also considered “unpublished” and are almost never consolidator fares.

We talked to Greg Rholl, Vice President of Pricing and Distribution for Minnesota consolidator Centrav, one of the largest consolidators, with contracts with more than 30 airlines, who ran us through the process: A consolidator will have a contract to sell private fares at a lower price than the published fare. If there’s a printed ticket, only “bulk” generally appears on the receipt. They generally can’t – or won’t - sell the ticket straight to you, but will offer it through a travel agent (including an online travel agent such as Travelocity or Expedia), or agencies such as the ones that advertise in Sunday newspaper travel sections. The agent adds their markup – keeping the margin slim so they’re not out-priced by published fares – and passes the remaining savings on to you. True consolidators don’t buy in quantity or ahead of time. Rather, they pull availability from their assigned class until the airline decides to close the window. It can be a great way to find a fluke fare, and consolidators now keep each other honest. Centrav, for instance, is a charter member of the United States Air Consolidators Association, which requires that its members sell at least $20 million in consolidator fares and have uninterrupted sales of at least two years. This may not mean much to you, since you can’t buy tickets from the USACA, but it should: If your trusted travel agent chooses a dicey consolidator that reneges on the deal or goes under, you’ll be relying on your credit card or your agent’s integrity to buffer you from the loss.

In the second half of this article, the best ways to shop for consolidator tickets
 

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