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SPECIAL REPORT: Air Travel Consolidators Offer Deep Discounts on Flights

Air Travel Consolidators Offer Deep Discounts on Flights

With Excess Seats Up for Grabs, Airlines Try to Fill Them

BY TANYA RODRIGUES

Staff Writer

Trying to explain the various deals and complex workings of air ticket consolidators can be like comparing apples and oranges.

According to local travel agency owner Tim Smith, the premise is not too different from that.

The practice has airlines offering deeply discounted tickets to consolidators, who in turn offer them to travel agents.

The idea stems from the fact that airlines need to unload seats that aren’t likely to be sold at the regular prices.

Back to the apples and oranges. According to Smith, the airlines’ excess inventory quickly becomes a perishable product.

“The ‘fruit and vegetables’ go bad after a period of time, so when you close that airplane’s door, any price would be a great price,” he said. “Once that door is closed, if you could squeeze somebody through there for a dollar, that’s incremental money.”

– Discounts Started With

International Air Travel

Consolidators, once the inhabitants of a more isolated niche market, continue to head into mainstream use.

More than ever, the companies that negotiate larger deals in lower-priced fares are becoming prevalent in all types of airline travel, particularly involving long distances, and are emerging as another tool for travel agents.

The first time Max McCormack encountered the consolidator concept, he was a sales manager for United Airlines, and United had taken over Pan Am Airlines’ Pacific routes.

Pan Am had dealt more with consolidation, which had been used for international flights in the beginning, recalled McCormack, now the president of his own agency, Travel Headquarters.

From there, he said, tour companies were first offered discounted rates on a particular destination.

Peter Murao, vice president of Los Angeles-based C & H; International, traces consolidator deals back slightly further.

Murao said the discounted fares were first available for people flying to Asia at less popular times of the year.

Many customers were visiting relatives and didn’t care that the tickets required less-convenient travel times and other details, he said.

The market turned out to be strong, and quickly expanded to other countries and eventually to domestic flights, Murao said.

– Travelers Hesitant

To Travel Overseas

After the terrorist attacks, September’s near-halt in air travel was rough for consolidators of international tickets, said Judi Gillum, reservations and ticketing manager for J & O; Air, a tour company’s consolidator division that specializes in Asian destinations and international travel.

“While domestic travel has increased, people are a little hesitant to travel internationally,” Gillum said. “It is picking up again now, and it’s somewhat back to normal.”

September is a strong month for international travel, Gillum said.

“When summer’s over, there’s a lot of travel deals out there, and September is one of the more popular times of the year for older people to travel to Europe, with less crowds and for less money,” she said.

“So September is one of the busiest times of the year for us, and this year of course, it was extremely poor,” Gillum continued.

Richard Meyerson, president of North County-based agency TravelTrust Corp., has been using consolidator tickets for a couple of years.

Meyerson said that they can be significantly less expensive, but often require a lot of work and time for the agents and clients.

Not all of the deals are easily accessible, he said. Although many consolidators list their holdings on the Internet on a computer system, other companies , and, potentially, the better deals , are only found through phone calls and other research.

Also, customers can be turned off by some tickets’ restrictions, he said.

“By and large, they have worked pretty well for us at least, and our clients, so whenever we can find them available, we certainly give it a try to do it so we can help the clients save money,” Meyerson said.

He generally expects the consolidator prices to be 30-40 percent less than a regularly listed ticket.

The inventory is always different, Meyerson said. “In just one day it will change so that it will be something in the morning and something different in the afternoon,” he said.

According to Smith, who owns San Diego Travel Group, consolidator deals are becoming more consumer-friendly.

The tickets aren’t necessarily restrictive and many of them are targeted for the business traveler, who needs convenience and flexibility, he said.

Smith’s own company has dipped into the consolidator market recently. Last year, San Diego Travel Group bought Travel Connoisseur, a locally based agency that had its own ticket consolidator division.

Since then, Smith has tried to build up the division’s various contracts and hopes to sell tickets to both the public and other travel agencies, he said.

With the economy the way it is, the best deals aren’t necessarily coming from consolidators, Meyerson noted.

With travel volume significantly lower, often attributed to the slumping economy and the Sept. 11 terrorist attacks, the airlines have began matching the fares they’ve negotiated with consolidators.

According to Gillum, consolidator fares are often $400 less than airlines’ regular fares. Now, the prices can be within $40 and $50, she said.

Murao said the matched fares have hurt his company’s sales margins, but the solution is for consolidators to remain a more efficient option for travel agents.

The carriers have sometimes offered similar deals on the Internet as well, McCormack noted.

“I think, honestly, they don’t want the consolidators to get too big a foothold,” he said.

The only way that prices change is if the demand for the flights changes, McCormack noted. “As demand for international air travel goes up, the need for discounting goes down,” he said.

But will that happen?

“That’s the $64,000 question right now that everybody has in their mind,” McCormack said. “I don’t think anybody knows where it’s going to go from here.

“We’re all wondering, although I will say that with every day that passes, we’re seeing more and more confidence in people beginning to plan vacations for next year.”

Murao is not concerned about his business’ future. He feels there will always be a need for niche consolidators.

The airlines , trying to keep distribution costs low , would likely prefer not to use consolidators or travel agents, he said.

“If they could distribute all their tickets and do everything without anyone else, they would and they should,” Murao said. “But what I think is that they’re finding it’s not possible.”

However, he doesn’t think it’s near feasible for the carriers. “It’s still much cheaper and more efficient to use travel agencies and, in certain markets, consolidators.”

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