Consolidator fares cost less but come with restrictions aplenty

By Betty Stark

Toss the phrase “air consolidator fares” into a discussion with travel industry people and knowledgeable frequent travelers and you’ll find yourself juggling the proverbial hot potato.

“Hate ’em,” said one veteran travel agent who admitted she occasionally gets these specialized fare requests from business travelers, but after she conducts long and frustrating searches, the traveler rarely books them because they are too restrictive.

“What’s not to love?” asked a pharmaceutical company road warrior who makes frequent trips to Munich and other major European cities, almost exclusively on consolidator fares.

“They save my company money. Period.”

Both are valid observations, and in a nutshell, they sum up the perplexities of this lesser-known arena of airfare sales. Consolidator fares have been around since shortly after deregulation in the late 1970s, and they had a somewhat murky past. Thus the process of determining whether they’re good or not so good, and who they’re good for, can be obscured by fuzzy dust.

Let’s first consider the murky past. Early on, air consolidators typically were small companies, primarily on the East and West coasts, that acted as discount fare wholesalers, buying blocks of unsold airline seats at deep discounts — sometimes as much as 20 percent to 70 percent — from major airlines for regularly scheduled flights. They resold them, through newspaper ads — surely you’ve seen those tiny “Paris - $406 round trip” ads in the Sunday travel section — and hand-painted signs taped to store front windows, to retail travel agencies and their clients across the country, and to the general public.

Those buying the tickets hammered out trip details over the phone or in person at the store-front location or through a local travel agent. Payment was made by check, sometimes cash. An airline ticket was hand delivered or sent by return mail, with any luck in time for the traveler to make the flight. Often, the name of the carrier was not known until the ticket arrived. Scams, while not rampant, were a problem, and buying a consolidator fare was viewed by some as akin to jumping off a roof with no assurance that someone was waiting below with a safety net.

Clearly, this all took place well before the advent of online booking programs and secure Web sites. The process has become more sophisticated, with online booking sites like Priceline, Travelocity and others that sell consolidator fares. But travel agents still account for a large percentage of consolidator fare sales, and some consolidators will sell only through travel agencies.

You might wonder why airlines would devise a plan to sell unclaimed seat inventory this way rather than offering their own deeply discounted fares through normal distribution channels. There are a few reasons: Most consolidator fares are for international, not domestic, flights. International fares are controlled by the International Air Transport Association (IATA), an organization of all major international airlines.

Because of strict tariff rules, member airlines are not allowed to sell unpublished fares themselves. But if they were to publish — for example on their Web site or through the usual GDS (travel agency) channels — and publicly sell their own deeply discounted fares, they would immediately alert their competitors to their pricing strategies and run the risk of being undercut by the opposition.

While it’s true that IATA regulations prohibit direct published discounting of airfares to travelers, IATA members manage to offer sizeable “commissions” to consolidators, who then pass the savings, minus a modest mark-up, to retailers and eventually passengers. Under the right circumstances, a consolidator fare can be a boon for a traveler looking to score a healthy discount.

But here’s the big question: Are consolidator fares right for business travelers, especially in this era of budget-tightening and travel policy changes that mandate “the lowest applicable fare?” Or will booking a discounted bulk fare ultimately create more problems than it solves?

It’s no secret that business travelers — especially frequent fliers who make and change air reservations several times before the flight finally departs — often do not have the luxury of knowing without a doubt that the trip is a go. That’s why it’s important to understand the mechanics — and potential pitfalls — of a consolidator ticket before setting out to book one.

Here are a few things to be aware of:

• The fare agreement between the consolidator and the airline can be a tricky one. Changing a booked fare to another time or date can be difficult or impossible if the airline no longer has availability in the originally blocked class of service. The consolidator’s window of opportunity with the airline must still be open, because if the airline has closed out that particular block of seats, you’re stuck with the original ticket.

• If you do succeed in changing the original terms of your ticket, expect to be hit with a hefty fee, typically more (to considerably more) than you would have to pay to change a “normal” airline ticket. Passenger name changes are rarely permitted, and medical waivers are rarely granted.

• Refunds are difficult if not impossible to obtain. Remember, you are buying a heavily restricted fare. If you plan to fly on a discounted consolidator ticket, you should be certain that the trip is a go.

• While you likely will know which carrier you’ll travel on, you might not be given an advance seat assignment. This means you’ll have to contact the airline or face an earlier-than-usual arrival at the airport to ensure that you’ll have an assigned seat when you proceed to the gate. If the flight is especially full (and many are these days, thanks to drastic fleet reductions), you could find yourself in a middle seat on a long, long flight at the back of a long, long aircraft.

• If your flight is canceled on departure day and your booked airline doesn’t have another flight to your destination leaving that day, the airline may resist endorsing your ticket over to another carrier because they’d have to pay their rival a hefty price for your seat.

• You may or may not earn frequent flyer miles for your consolidator flights. Again, it depends on the terms of the deal negotiated between the consolidator and the airline. You cannot use frequent flier miles to upgrade to a better class of service, nor can you pay for an upgrade.

• Timing is important. Your window of opportunity to book a consolidator flight will generally begin six to eight weeks before departure. Wait until the last minute and you might get lucky, score a great fare as the airline sells out its remaining inventory — or you could find the consolidator seats long gone.

By now you are probably asking yourself why anyone would even consider a consolidator fare. Yes, they can be complicated, and because of this, the common wisdom is that, to gain added protection, you should buy the ticket through a travel agent versed in the intricacies of consolidator fares.

Many travel agencies work with consolidators who are members of the U.S. Air Consolidators Association, a national trade association that has set high standards for membership, including a two-year uninterrupted period of consolidator sales to travel agencies prior to admission, and at least $20 million annually in consolidated air sales.

Obviously, the biggest advantage of consolidator fares is the lower cost. If that’s most important to you and your company, and if you can live with the restrictions, consolidator fares may be just the ticket.
 

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