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FAQ: Air Traveler's Handbook 2/4 [Monthly posting]
Section - [2-3] Consolidators

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Ticket consolidators (wholesalers, ``bucket shops'') are often 30-40%
cheaper than buying direct from the airline. They buy blocks of unsold
seats from the airlines and resell them at a slim margin. Such tickets
are usually heavily restricted and are for a standard profile (e.g.,
no special meals, no changes, no transfers, no refunds).  It used to
be the case that you couldn't get frequent flyer miles for travel on
consolidator tickets, but that seems to be changing.  Cancellation
penalties are often much more severe than on regular tickets.  The
greater the distance traveled, the greater the chances of saving money
through a consolidator ticket. This is especially true for
international flights. If you're planning a round-the-world trip,
definitely use a consolidator to buy your tickets. Consolidators don't
buy their tickets until a month or two before the flight, so you
probably won't be able to buy your tickets very far in advance.

The Sunday NY Times travel section has a list of such wholesalers, as
do many other major newspapers. You can also find some in your local
yellow pages, under the same listing as regular travel agents.

Although "consolidator" and "bucket shop" are often used
interchangeably, they refer to different kinds of wholesalers.
Consolidators buy large blocks of tickets at discounted rates direct
from the airlines. When an airline can't sell their tickets at regular
prices, they sell them to consolidators at lower prices. The
restrictions on these tickets are governed by the consolidator's
contract with the airline, and not by the rules for published fares.
Such contracts usually preclude consolidators from naming airlines in
advertisements, but do allow them to specify prices. Sometimes they
are restricted to promoting the fares only to a particular geographic
or ethnic market.  Usually they sell only through retail agencies and
not directly to the public. Some consolidators sell tickets only to
travel agencies.  Others sell both wholesale and retail.  Bucket shops
are retail agencies that specialize in getting discounted prices on
tickets. They are familiar with the full range of consolidators for
all the carriers (every airline sells to many consolidators) and in
other techniques of fare construction, importing tickets, etc. Many
bucket shops don't have any direct contact with the airline, in
contrast with consolidators.

International airfares are set by international agreement and
regulated by the airline cartel, IATA.   Most interantional airlines
are closely related to, if not directly owned by, their national
governments. Thus most governments have an interest in protecting the
profits of their national airline, with the result that the IATA fares
are artificially high. IATA rules prohibit discounting, and in some
countries these rules are actually enforced. Bucket shops work around
the rules by buying discounted tickets direct from the airlines or
through consolidators. These tickets are discounted with restrictions
that attempt to ensure that the airlines fill otherwise empty seats
instead of diverting full-fare passengers to cheaper tickets. Some
restrictions include limitations on the advertising of such tickets,
forbidding mention of the name of the airline, or restricting the
promotion of such tickets to a particular geographic or ethnic market.
Another method of discounting tickets is through rebating a portion of
the consolidator commission to the public.

AirHitch (212-864-2000; 2790 Broadway, Suite 100, New York, NY 10025)
is a consolidator which buys unsold seats very close to the wire.  You
provide a window of times (or destinations), and AirHitch lets you
know about available flights within your window on extremely short
notice. Tickets are one-way and there may not necessarily be a perfect
match with the destination you had in mind. Since this is a form of
standby travel, it is possible that there will be no seats left when
the you arrive at the airport. If that happens you'll have to try a
different destination in the same window, maybe the same day, maybe a
day or two later. If you want to travel to "somewhere" in Europe and
then return to "somewhere" in the US, AirHitch can be a very
inexpensive method of traveling.  A similar outfit is AirTech
(800-575-TECH) <airtech@netcom.com>. There have been reports of
complaints by consumers about both outfits. Be sure you understand the
risks and uncertainties involved in flying this particular kind of
cut-rate standby travel before buying their flight vouchers. Not for
the faint of heart.

When buying tickets from a consolidator, it is best to use a reputable
one that has been around for a while. Many are small companies and
tend to go out of business frequently. Check the out with the Better
Business Bureau. Caveat emptor. The best advice we can offer is to
purchase tickets through a travel agent who regularly deals with
consolidators.

Some tips:
 
   +  Shop around. Unlike regular tickets, different consolidators may
      offer different prices for the same destination.

   +  Buy your tickets with a credit card, so you can get a refund
      from your credit card company if you never get the tickets. Many
      consolidators, however, do not accept credit cards, or add a 2-5%
      surcharge for non-cash purchases (possibly phrasing the
      difference in price between credit card and non credit card
      purchases as a cash discount). 

      The reason for credit card surcharges has to do with the economics of
      selling tickets for air travel. When a regular travel agent sells a
      ticket for travel on an airline, the credit card is in effect being
      charged by the airline, not the agent. Normally a merchant pays a fee
      from 1% to 5% of the purchase price to the credit card company. Due to
      their high volume, airlines are able to negotiate very low fees with
      the credit card companies. When a consolidator accepts credit cards,
      they are doing it as an individual merchant, and hence aren't able to
      get the low fees available to airlines. Given how little money they
      earn from each ticket, they just cannot afford to accept credit cards
      without adding a surcharge. For example, if a consolidator earns
      a commission of 8% of the selling price, and then has to pay 2%
      to the credit card company, they've cut their income by 25%.
      Most consolidators can't afford to do this and stay in business.
      Credit cards also pose a risk of chargebacks, which can affect
      the consolidators bottom line. 

   +  Deal with a local consolidator, since you can check them out
      yourself (e.g., verify that they aren't just a mail drop for a scam).

   +  Don't put much stock in favorable references from satisfied
      customers, unless you personally know the customers. Even the
      worst consolidator has some happy clients.

   +  If possible, pick up the tickets in person. If you don't get the
      tickets within a day or two by mail, something is wrong.

   +  When you get the tickets, call the airline immediately to verify
      that the tickets are legitimate.

   +  Airlines reserve the right to change the fares on consolidator
      tickets at any time, so the fares are not guaranteed until you
      actually receive the ticket. If the airline increases the fare
      after you purchase the tickets but before you receive the
      tickets, some consolidators will charge you the difference.

Example Consolidators:
   + Airbrokers 		800-883-3273
                                415-397-4767 fax
   + Best Travel Service 	800-800-4788 (713-777-4888)
	                        713-777-4886 fax
   + Cheap Tickets		800-377-1000
   + Council Charter            800-800-8222
   + Dixieland Tours            800-256-8747
     Baton Rouge, Louisiana
   + Euram Tours                800-848-6789
   + Global Access 		800-283-5333
   + IntraTours 		800-334-8069 (713-952-0662)
                                713-952-2631 fax
   + Nippon Travel 		800-662-6236
   + Overseas Tours 		800-878-8718 / 800-227-5988
   + Sunline Express Holidays 	800-786-5463
   + STA Travel			800-777-0112
     Specializes in student/youth travel.
   + TFI Tours International    800-745-8000
   + Travac Tours and Charters  800-872-8800
                                407-896-0046 fax
   + UniTravel, St. Louis 	800-325-2222
                                314-569-2503 fax
   + Worldwide Travel Center    800-886-4988
                                703-379-6363
                                703-379-6283 fax

AUSTRAVEL is a consolidator for travel to Australia. They have offices
at 360 Post Street, Suite 606, in San Francisco, phone 800-633-3404
(415-781-4329), fax 415-781-4358. They have other offices
in New York, Chicago, Houston, Sydney, and the UK.

PASSENGER'S CHOICE 1-800-666-1026 advertises business class for up to
40% off in the San Francisco paper. They aren't really a consolidator.
They get the low fares by buying excess frequent flyer miles from high
volume frequent flyers, and then redeeming the certificates for a ticket
in your name. The selling of frequent flyer miles in this manner is a
violation of airline rules (the original certificate holder can issue
a ticket in your name, but isn't supposed to accept compensation for
doing it). This is a gray area.

Other bargain travel agencies:
   + Travel Bargains 		800-872-8385
   + Airfares for Less 		800-AIR-FARE

Consolidators are now also buying up blocks of hotel rooms and selling
them at steep discounts. For example, Hotel Reservation Network (HRN)
1-800-964-6835 offers rooms at 10 to 40 percent off AAA rates,
especially in New York and San Francisco.

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Top Document: FAQ: Air Traveler's Handbook 2/4 [Monthly posting]
Previous Document: [2-2] Unusual Travel Agents: Commission Rebaters
Next Document: [2-4] Couriers

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Last Update March 27 2014 @ 02:12 PM