| While US domestic airfare is a lot more volatile (i.e. | | | | Players in this category are Travelocity, Orbitz, |
| prices change a lot more frequently) the price | | | | Cheaptickets, Expedia, Priceline, Hotwire and so on. |
| difference between major travel sites such as Orbitz, | | | | They sell published and unpublished airfare. They |
| Travelocity, Expedia, and the airlines sites is often no | | | | charge a service fee. They also habitually try to sell |
| more than 10-20%. There are exceptions where | | | | you other travel components such as hotel |
| going with a lesser known carrier such as Allegiant Air | | | | accommodation, car rentals, attraction tickets and/or |
| or US3000 Airlines can save you substantially more | | | | travel insurance. If you are going overseas for a |
| but by and large for most of US domestic travel this | | | | vacation buying a package (where the seller will |
| remains the case. Sellers of domestic airfare pretty | | | | bundle an air component with one or more land |
| much fall into 2 categories: (1) the airlines and (2) | | | | components) can be an option and may save you |
| online travel agencies. There are a few niche players | | | | money. In a future article I will cover the advantages |
| but they service a very small market. Therefore, | | | | and disadvantages of packages. |
| when shopping for domestic airfare deals the "when | | | | Offline Travel Agencies |
| to buy" is commonly more important than the "where | | | | Also referred to as brick and mortar travel agencies, |
| to buy." | | | | these are the traditional agencies that you would |
| The opposite is true when securing an international | | | | walk into, sit down and book your travel. Depending |
| airfare bargain. The "when to buy" is still important | | | | on size and target market they may also double as |
| (as in don't wait until the last minute) but the "where | | | | an ethnic consolidator or destination specialist. They |
| to buy" is a lot more important. This is because | | | | also have access to consolidator fares not offered |
| airfare to Europe, Asia, Africa, and South & | | | | directly to the general public. Brick and mortar |
| Central America are somewhat less volatile (may not | | | | agencies almost always charge a service fee. |
| change as frequently) but the price difference | | | | Global Consolidators that Sell Directly to the Public |
| between different vendors can sometimes be as | | | | Many times these are travel agencies that have |
| much as 50% or more. There are several reasons | | | | decided to "cut out the middleman" and go directly to |
| why that is but the two major reasons are (1) the | | | | the airlines to negotiate their own private fares. This |
| type of fares that are offered and (2) the number | | | | allows them to then re-sell them at a lower price |
| of players in the field. | | | | without loosing their margin. In order to get decent |
| The Type of Fares | | | | private fares a global consolidator would have to |
| Without getting very technical there are basically 2 | | | | offer $100 Million+ in annual agency sales. Most of the |
| types of international airfare; published and | | | | negotiated tickets are sold without a service fee. If a |
| unpublished. In the domestic market 97% of leisure | | | | consolidator sells a published fare they regularly add a |
| fares are published (give or take). A published fare | | | | service fee. |
| you can refer to as a retail fare. The airline creates | | | | Global Consolidators that do not Sell Directly to the |
| the fare and the rules associated with that fare and | | | | Public |
| then publishes the information through a clearing | | | | In the days prior to online internet travel very few |
| house called ATPCo (Airline Tariff Publishing | | | | agencies would act as their own consolidator. Instead |
| Company). ATPCo then distributes the fare to the | | | | they worked through middlemen (consolidators) that |
| global distribution systems. Online and offline travel | | | | negotiated deals with the airlines. A consolidator |
| agencies in turn retrieve these published fares via | | | | would negotiate that same $300 deal mentioned |
| one or more of these systems. Everybody has | | | | above, add his margin and then sell it to a retail |
| access to the fare. An unpublished fare (also referred | | | | agency. The retail agent would then add her margin |
| to as a negotiated fare) is still being released via | | | | and sell it to the public. As the Internet took shape, |
| ATPCo but part of the "fare rules" is an indicator of | | | | agencies could reach a much larger audience and |
| what seller is allowed to access and sell the fare. It is | | | | therefore gained the clout to negotiate directly with |
| essentially a private fare. One other difference is that | | | | the airlines. Nevertheless, there are still many |
| published fares have to be sold at the price | | | | agencies, offline and online that offer middlemen |
| determined by the airline (no mark-ups or mark | | | | consolidator airfares. Due to the sheer volume |
| downs) while a private fare can be marked up. That | | | | consolidators can offer to an airline these fares could |
| is why you see online and offline agencies add a | | | | still be a bargain even after several mark-ups. |
| service charge of anywhere between $5 and $50 to | | | | Ethnic Consolidators or Destination Specialists |
| a published fare ticket. With a negotiated fare the | | | | These are probably one of the least known (by the |
| airline will receive a set amount and the seller is | | | | general public that is) sources for inexpensive airline |
| allowed to mark up (add his/her margin) to that fare. | | | | tickets. They are also some of the hardest to find. |
| So, a seller may negotiate a $300 fare from New | | | | The US is a nation of immigrants and ethnic |
| York to London with airline X and then mark it up | | | | consolidators have traditionally serviced their |
| and sell it for $345. Another visible difference | | | | ex-patriot or immigrant community. They were and |
| between a negotiated and a published fare is the | | | | still are the cheap sources for airfare back to the |
| fact that on many (almost all) negotiated airline | | | | home country. Unlike global consolidators that can |
| tickets you will not see the actual price you paid for | | | | turn over $250 Million+ in sales a year these ethnic |
| the ticket. Instead you will either see a much higher | | | | outlets may only turn over $2-5 Million a year but |
| fare or only tax information. A published fare tickets | | | | most of that can go to 1 or 2 carriers. They are |
| will show exactly what you paid for the ticket | | | | highly specialized and have long-standing relationships |
| (excluding any service charges). As a general rule, | | | | to their preferred carriers. These long-term, reliable |
| negotiated fare tickets are frequently cheaper than | | | | relationships are the reason why some ethnic mom |
| published fare tickets (There are instances when an | | | | and pop operations are able to secure airfare rates |
| airline may have a "fire sale" that undercuts the fare | | | | that are 20-30% lower than any of the online mega |
| levels of negotiated fares) and that is why "the | | | | agencies. Destination specialists are similar to ethnic |
| where" is more important than "the when" when it | | | | consolidators in terms of size and style. They have |
| comes to buying international airfare. | | | | become true experts in a country or region and have |
| Sellers of Travel | | | | built relationships. The difference is that often they |
| Sellers of international airfare fall into the following | | | | are targeting the foreign independent traveler (FIT). |
| major categories: | | | | Like I mentioned, the airfare bargains some of these |
| (1) Major Airlines | | | | outlets can offer are often hard to beat but the |
| (2) Charter Airlines | | | | challenge is finding them. Google and Yahoo and any |
| (3) Online Travel Agencies | | | | of the other search engines often do not find them. |
| (4) Offline Travel Agencies | | | | Student Travel Consolidators |
| (5) Global Consolidators that sell to the Public | | | | As the name suggests these are agencies that |
| (6) Global Consolidators that do not sell to Public | | | | target students (and in some cases faculty). Just like |
| (7) Ethnic Consolidators or Destination Specialists | | | | a global consolidator, they approach the airlines and |
| (8) Student Travel Consolidators | | | | negotiate special discounts or private fares. The |
| (9) Tour Operators | | | | difference is that according to the agreement with |
| Major Airlines | | | | the airlines they are only allowed to sell to bona fide |
| These are the carriers we are all familiar with such as | | | | students (and faculty) only. Frequently, the students |
| American Airlines, United Airlines, Delta Airlines, | | | | have to be enrolled in an accredited college or |
| Northwest Airlines, Lufthansa, British Airways, KLM | | | | university and high school students are not eligible. |
| and many more. They offer airfare via their own | | | | The same is true for faculty. Some agencies are |
| website and many of the other sellers listed above. | | | | better than others in ensuring that the person buying |
| They may offer web specials on their own site. They | | | | the ticket actually is a student. |
| do not charge a service fee. | | | | Tour Operators |
| Charter Airlines | | | | Tour Operators are entities that sell vacation |
| In Europe this type of airline is a lot more common | | | | packages such as all-inclusive, etc. They negotiate |
| than in the US. A charter is basically when a tour | | | | deals with airlines, hotels, ground operators and so |
| operator "rents" or "charters" an airplane to fly | | | | forth, package them together, mark them up and |
| vacationers from their departure gateway airport to | | | | then sell them as one product to the public. On |
| the destination airport. There are a few airline | | | | occasion they will sell just the airfare (at rock bottom |
| companies that offer service from/to the US that | | | | prices) in order to fill empty seats on the plane. Since |
| have their roots in the charter business. They | | | | they have a fixed price that they have to pay the |
| regularly offer year round or seasonal service to | | | | aircraft operator, any empty seat is a missed |
| from a few select US airports to a single country. | | | | opportunity. The best chance to get one of these |
| They are FAA approved and must meet all airline | | | | cheap seats is usually to the Caribbean or Mexico. |
| safety rules & regulations. What sets them | | | | Sources for international airfare bargains are plentiful. |
| apart is their business model that allows them to | | | | Finding the right one at the right time may make all |
| commonly sell seats cheaper than the majors. Some | | | | the difference in whether you get a good fare or a |
| of these alternative airlines are LTU, Condor, | | | | great deal. While getting a domestic airfare deal is |
| FlyGlobespan, or Martinair to name a few. They | | | | often the result of (lucky) timing getting a great |
| usually also do not charge a service fee. | | | | international deal is frequently the result of knowing |
| Online Travel Agencies | | | | where to look. |