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 The Brancatelli File

joe CONSOLIDATORS:
THE TRAVEL MAGICIANS


BY JOE BRANCATELLI

December 9, 1996 -- Stressed out after one too many all-nighters, investment banker Richard Sansone found himself playing stick-the-pin-in-the-globe to find a suitable vacation spot. After one well-advised do-over--he landed on St. Louis--Sansone lucked out: His pin struck Mauritius, the pristine little holiday island in the Indian Ocean. Then came the bad news: His firm's corporate travel agent quoted a staggering $6,698 for a last-minute, roundtrip coach flight from New York to Mauritius via London.

Sansone made it to Mauritius, though, and he paid just $2,495 for his ticket to paradise. The miraculous $4,200 discount materialized when his personal travel agent secured the Mauritius itinerary from a ticket wholesaler called an "airline consolidator," a peculiar back channel where many of the world's airlines quietly dump their excess inventory of international seats.

Acting like the outlet malls of commercial aviation, consolidators can save you anywhere from a few dollars on deeply-discounted, advance-purchase tickets to a few thousand on last-minute, long-haul business trip. The discounts vary by route and by time of season, the restrictions are sometimes convoluted and consolidators can't always get the seats you want when you need to fly, but a recent check of the market yielded last-minute savings of as much as 77 percent.

SAVINGS IN THE SKY

I compared the airlines' published fares for an unrestricted, one-way coach seat on ten routes to the prices quoted by consolidators to Gulfstream Travel (800-844-6939), an Alabama travel agency. Fares apply to flights on December 12.

Route

Airlines

Consolidators

Savings

Dallas-Paris

$1366

$312

77%

Detroit-Amsterdam

$1221

$335

72%

Washington, DC-Rome

$1098

$312

71%

Boston-London

$633

$190

70%

New York-Abidjan

$1199

$816

32%

Chicago-Hong Kong

$1146

$785

31%

Miami-Rio De Janeiro

$816

$626

23%

San Francisco-Tokyo

$1019

$865

15%

Los Angeles-Sydney

$1727

not available

0%

Houston-Bogota

$768

not available

0%


"Consolidators deal in distressed merchandise," explains Jill Donaldson, a vice president of British Airways. "They buy tickets the airlines can't sell, they buy lots of them and we give them the kind of prices that allow them to turn around and offer huge discounts to certain travelers."

So how can you cash in on this bargain bonanza? Only with great caution and only with the guidance of a smart travel agent. (The rules are different for hotel consolidators. See the chart below.)

For starters, finding a consolidator ain't easy. A few advertise in the classified sections of The Wall Street Journal, USA Today and major dailies like the Los Angeles Times and The New York Times, but most work only by word of mouth. Still others concentrate on what is euphemistically called "ethnic markets." In other words, their sales base is almost exclusively immigrants who return home frequently and prefer flying the national carrier of their home country.

The consolidator industry is so shadowy that no one even knows how many consolidators are in business at any one time. One of the few published guides, The Airline Consolidators Quick Reference Chart, lists about 100 companies. Airlines say there are at least twice that many. And consolidators themselves put the number at 300 or more.

Even assuming you find a consolidator, however, there's no guarantee he'll agree to sell you a ticket. The biggest and most reputable ticket consolidators--companies with names like Jetset North America, C.L. Thompson, and C&H--refuse to sell direct to consumers. Instead, they essentially act as wholesalers, buying huge lots of tickets direct from the airlines, then distributing them in smaller lots to travel agents. "Besides," says one consolidator who refused to let her name be used, "we're not full-service travel companies. We move volume. We don't have the time to deal with every browser looking to price a ticket to Hong Kong."

But using a travel agent to find a consolidator ticket isn't just a matter of convenience. Even savvy travelers need a guide through the maze of restrictions the airlines slap on seats sold through consolidators. Just ask decorator Susan Flynn: she bought a $450 roundtrip ticket to Paris direct from a consolidator. She thought the "open" return on her ticket entitled her to fly home whenever she chose. What it really meant was that she had no confirmed seat on a return flight and she waited five extra days in Paris before the airline found her a ride home.

"You've got to be a bit rational when you're buying a consolidator seat. You've got to understand the restrictions," says Gary Topping, president of Gulfstream Travel, the agency that wrote Sansone's Mauritius ticket. "It's only logical to expect that tickets you can buy for 70 percent off the full-coach price involve some conditions. The restrictions are not insurmountable, but you've got to know what you're doing."

Although they vary by ticket and destination, most consolidator seats have a fairly standard set of conditions, according to Topping and Rochelle Lieberman, president of Gateway Travel. Here are some of the most common drawbacks:

+ Not all tickets purchased through a consolidator are eligible for frequent-flyer miles and you probably can't use frequent-flyer miles or upgrade coupons to move up to the business or first-class cabin.

+ Most consolidator tickets are non-refundable and changing your itinerary or date or time of departure carries a $150 fee.

+ Some consolidators cannot arrange for advance-seat assignments, which means you've got to queue up with the tourists and the backpackers at the ticket counter and hope you'll escape the dreaded middle seats.

+ Virtually all consolidator seats are "nonendorsable." That bit of airline speak is vitally important. It means that you must fly the airline whose name is on the ticket because no other carrier will honor it. If your flight is delayed or canceled, you must wait until your airline has another flight--and an empty seat--to that destination.

Another fly in the consolidator ointment: It's been months since consolidators had first- or business-class seats to sell. The airlines are doing such a booming business in the premium classes there's literally no excess capacity to dump on consolidators. "Buying a business-class seat through a consolidator is impossible these days," says Lieberman. "Even six months out, there are no seats. And you can never get a first-class seat anymore." So prepare to pay full freight if you insist on flying up front.

All those restrictions and hurdles once deterred corporate travelers and corporate travel departments from using consolidators. In fact, many big corporations still don't buy consolidator seats for their executives. But as more and more business travel is generated by entrepreneurs and small business people--travelers who can draw a direct line from the cost of their ticket to their bottom line--consolidators are capturing a larger slice of the business-travel pie. "Entrepreneurs love us," says Barry Rush, president of Jetset North America. "Consolidator tickets may not be perfect for the corporate traveler, but individuals understand the value" of saving $1,000 or more on a single flight.

And make no mistake about it: the dramatic savings are what make consolidator tickets so overwhelmingly attractive. Consolidators may not have first class seats to sell, but they are awash in cheap coach seats that can be purchased with little or no risk and little or no advance planning. It's hard to argue with the logic of paying just $312 for a last-minute flight to Paris from Dallas rather than forking over $1,366 for a seat on the same flight.

"If you're working up a vacation for six months from now, don't waste your time with a consolidator. They won't beat airline prices," says Topping. "But the longer the haul and the shorter the window for purchasing your ticket before departure, the better the deal the consolidators offer."

SAVINGS ON LAND

Hotel consolidators take excess capacity off the hands of hotels and resell the rooms at deeply discounted prices. Unlike airline consolidators, however, hotel brokers generally work directly with consumers. And since hotels are more willing to deal on their so-called "published" or "rack" rates, hotel consolidators cannot boast savings as dramatic as those offered by airline consolidators. Nevertheless, consolidators can often secure you a room for as much as one-third less than a hotel's best nightly rate. I called hotels in five cities and compared their lowest rates for a standard room on December 12 to the prices quoted by Quikbook, a leading hotel consolidator.

City

Hotel

Best Rate
from Hotel

Quikbook
Rate

Savings

Chicago

Ambassador East

$129

$85

34%

San Francisco

Mark Hopkins

$180

$133

26%

Atlanta

Hotel Nikko

$195

$155

20%

New York

Loews New York

$159

$149

6%

Boston

Colonnade

$155

$145

6%


This column originally appeared in Fortune magazine.

Copyright © 1993-2005 by Joe Brancatelli. All rights reserved.