Consolidators Can Give Travelers Cheap Thrills

I counted the number of Los Angeles-to-London air fares advertised in a recent Times Travel Section, and came up with 27 different offerings. Only a few ads were by airlines. The rest were by a variety of travel companies. Round-trip rates ranged from $399 to $638, one way from $229 to $368.

There aren’t 27 airlines serving London from Los Angeles, so how can all these fares exist?

Welcome to the sometimes complex buy-and-sell world of low-price air tickets.

Airlines, trying to fill as many seats as possible, regularly make deals with discount companies known as consolidators to sell tickets to destinations around the world.

Consolidators advertise seats at discounts that may be even lower than an airline’s lowest rate. In effect, then, airlines are undercutting their own published rates--with the hope of filling empty seats on various flights.

While the discounting of international airline tickets is technically illegal, the U.S. Department of Transportation has publicly stated on many occasions that it doesn’t intend to enforce the rule since the practice is seen as a benefit to the traveling public.

“Using consolidators is another marketing tool by airlines to develop incremental traffic that we wouldn’t otherwise get, especially during slow periods,” said Randall Tom, an international sales manager based in Los Angeles for American Airlines.

Buying airline tickets from a consolidator today no longer carries the element of uncertainty that it did when the practice first began about a decade ago. A representative of a large national consolidator talked recently of “the trend toward the legitimization of the consolidator industry.”

Another consolidator, David Scott of Euram Tours of Washington, D.C., estimates that consolidators are doing a billion-dollar business nationwide each year.

Since airlines may indeed be selling seats through a consolidator at prices that are lower than even their own discount rates, consolidators are not allowed--per agreement with the airlines--to actually name the airlines in their ads. Thus, newspaper ads typically would announce that discount fares are available on “scheduled airlines,” without identifying them.

There are advantages to buying a consolidator’s ticket instead of an airline’s lowest-priced fare. With a consolidator’s ticket, you don’t face an advance-purchase obligation, and the price is generally lower. However, the ticket may be nonrefundable, or only partially refundable, depending on how close to flight time it is before you cancel your flight. Always ask consolidators about their cancellation penalties. They may not be much different than those imposed by most airlines for discount flights. Consumers should also consider buying trip-cancellation and operator-default insurance, just to be safe.

Minimum- or maximum-stay conditions, if any, are more flexible than the airline’s restrictions on their advance-purchase fares. But as part of your condition when buying a ticket from a consolidator, consumers probably won’t be able to use their tickets on any other airline; you have to fly on the carrier you’re ticketed on.

Here’s an example of how consolidators work:

“This past summer we had a contract with a scheduled airline for nonstop round-trip flights from Los Angeles to London that cost us $570 per seat,” said Brian Clewer, head of Continental Travel Shop, a Santa Monica consolidator. “We sold these seats to travel agents for $600 and to the public at $649. The agents could mark the price up as they wanted. During the same period, the lowest scheduled airline fare, involving a 21-day advance-purchase condition, was $858.”

Some consolidators sell directly to the public, while others only sell through travel agencies. Using a travel agent can be advantageous since an agent is likely to know who the reputable consolidators are, including their business record. Another advantage is that the agency is legally liable if it selects the consolidator and the consumer doesn’t receive a paid-for ticket.

“We buy tickets through consolidators, but we only work with companies that we know we can send our client’s money to without worrying about getting tickets,” said Martha Scott, manager of Glendale Travel. “People will cite some of these ads in the paper with low prices, and in some cases we say we’re not familiar with that particular company and we won’t deal with them.”

Not every newspaper ad placed by a consolidator necessarily means that the firm has a contract with an airline to provide a certain number of seats on a certain number of flights. Some consolidators--and some entrepreneurs operating with just a toll-free number--will advertise low fares, then take orders from consumers before buying the seats themselves from other consolidators.

“Some of these entrepreneurs, called the ‘briefcase brigade,’ will hold on to the consumer’s money close to a departure, seeking the lowest rate from an airline with empty seats,” said Clewer. “This can be a chancy way to travel.”

With all the wheeling and dealing between travel companies, who writes and provides the actual tickets?

“In most cases, the airlines write and issue their own tickets for consolidators,” said Clewer. “We pick up tickets daily from airlines we work with. A consumer could buy one of our tickets through a travel agency, but we wouldn’t provide the ticket until we were fully paid.”

Agencies can then mark the cost up before selling seats to the public at whatever price they choose. However, these rates are still likely to be less than the carrier’s lowest fare. Regardless of who you buy the tickets from--a consolidator or an agency--any price listed on the ticket itself will be the regular fare, not the discounted amount that you actually paid. That, too, is part of the airline-consolidator agreement.

Then there’s the issue of frequent-flier mileage. Airlines working with consolidators handle frequent-flier benefits differently, though benefits will usually apply when tickets are purchased from a consolidator. But consumers should always inquire at the time of purchase, to be sure.

In addition, by buying seats through a consolidator, consumers may not be able to take advantage of some of the car rental deals and hotel discounts offered by airlines.

If you buy airline tickets directly from a consolidator, or through a travel agency that buys tickets from a consolidator, you might have to pay an extra charge--usually 3% to 4%--to use your credit card. However, the advantage of paying by credit card is that you can contest the charge with the credit card company if a problem arises. By using cash, it could be more difficult to get your money back.

Here’s a checklist of important points for consumers to consider when buying airline tickets from a consolidator:

--Which airline will you fly on, and is the flight nonstop or one-stop?

--Can you pay by credit card, and, if so, is there a charge?

--Can you get a full or partial refund if you cancel?

--Can you change your return date without a penalty, or do you have to buy a new one-way ticket (this point should also be checked with the airline’s nonrefundable fares)?

Another safeguard: If you’re handling matters yourself, and feel uncertain about the company, check with the airline involved and see if a reservation has been made on the flight you want before you make your full payment for a ticket.