Archive-name: travel/air/consolidators
Posting-Frequency: monthly
Last-modified: 2001/04/01
Version: 11.3
URL: http://hasbrouck.org/faq
Copyright: (c) 1991-2001 Edward Hasbrouck
Maintainer: Edward Hasbrouck
Airline Ticket Consolidators and Bucket Shops FAQ
1. About this FAQ
2. Disclaimer
3. Domestic vs. international airfares
4. Airfares within North America
5. International airfares
6. Finding international ticket discounters
7. Last-minute discounts?
8. Dealing with international ticket discounters
9. Making reservations
10. Contacting the FAQ-maintainer
-----------------
1. ABOUT THIS FAQ
This is a monthly posting to the Usenet newsgroups
rec.travel.air and rec.travel.marketplace, answering
Frequently-Asked Questions (FAQ's) about consolidators,
bucket shops, and discounted international airline tickets.
Since its first posting in 1991, this FAQ has benefited
greatly from suggestions from readers of the FAQ and of my
book, and of participants in my travel planning seminars. I
welcome your suggestions for future versions.
I've had to choose between making this FAQ too long and
leaving too many common questions unanswered. If you have
further questions after reading this FAQ, there's a good
chance you'll find them answered in my books: "The Practical
Nomad Guide to the Online Travel Marketplace" (March 2001;
now shipping) and "The Practical Nomad: How To Travel Around
The World" (2nd edition, September 2000). I also give
travel planning seminars and talks at hostels, bookstores,
travel stores, and other travel events. For more information
on my books and talks, see .
The latest version of this FAQ is available at:
You can get the latest version of this FAQ by e-mail
by sending any message to
Other mirrors of this FAQ (not always the most recent) are at:
2. DISCLAIMER
Neither this nor any of my posting is, or is intended to be,
a solicitation for business. I'm a travel agent and travel
writer because I love travel, and I want to encourage and
empower people to learn about and explore the world. I
maintain this FAQ at my own expense on my own time, not my
publisher's or my employer's, for the pleasure and
satisfaction it gives me, not in any hope of remuneration.
Most of those on rec.travel.air are, it appears, traveling
mainly within North America, or on one-way or round-trip
tickets to single destinations. I am not seeking this
business, and would decline it if offered. The agency where
I work, AirTreks.com, specializes
exclusively in around-the-world, circle-Pacific, and other
multi-stop international tickets. One of the most important
pieces of advice I would give anyone selecting a travel
agent is to find a specialist in your sort of travel. There
is no one best travel agent for everyone or everything, and
I am happy to remain in my small niche.
3. DOMESTIC VS. INTERNATIONAL AIRFARES
Much of the confusion about airfares comes from the fact
that there are *completely* different systems of airfares for
domestic flights within any given country and for
international flights.
The USA is the world's largest air travel market, and people
from the USA travel within the USA much more than they
travel abroad. As a result, many people from the USA --
including many USA travel writers unfamiliar with the inner
workings of the air travel industry -- make the mistake of
applying their experience or knowledge of domestic USA
airfares to international airfares, where they don't
necessarily apply at all.
Domestic and international airfares, and the optimum
consumer strategies for dealing with them, have *nothing* in
common. Any advice about airfares, from any source (no
matter how seemingly authoritative) that isn't explicitly
identified as to whether it pertains to domestic or
international airfares, is useless (at best) and misleading
(at worst), and should in either case be completely
disregarded.
4. AIRFARES WITHIN NORTH AMERICA
Until recently, there were almost no "bucket shops",
consolidators, or similar discounts on travel on scheduled
airlines (i.e. other than on charter flights) within North
America (within and between the USA, Canada, and the
Caribbean).
Domestic USA airfares were deregulated in 1978. For domestic
USA fares, since deregulation, airlines can publish pretty
much any fares they want, and change them at whim. If they
want to lower the fare, they publish a lower fare. Once
published and filed with the government, a fare is available
directly from the airline as well as from all its
"appointed" agents, including brick-and-mortar travel
agencies, online agencies, and those that sell both online
and offline.
So getting the best domestic USA fare meant learning how to
search whatever computerized reservation system (CRS) the
travel agent or Web site uses (the major ones are pretty
comparable on completeness of listings of published USA
domestic fares), figuring out which seats on which flight
itineraries it applies to, booking seats accordingly, and
issuing the ticket at the price determined by the CRS
pricing robot.
It's natural to assume that by going directly to the airline
and "cutting out the person in the middle" you would pay
less than if you went through a travel agent or an
independent Web site. But airlines have no reason, and
certainly no obligation, to offer you the lowest price.
Their goal, whether on the phone or on the Internet, is to
convince you to pay as much as possible. Asking an airline
how much they want you to pay for a ticket is like asking
the IRS how much tax they want you to pay: they'll give you
an answer, but there's no reason to expect it to be the one
that's in *your* best interest.
You may be better off buying your tickets (or preparing your
tax return) with the assistance of an independent consultant
-- a travel agent -- not beholden to any particular
airline(s), even if you have to pay for their services. The
worst place to buy your ticket, if you care about price, is
directly from an airline. If you buy tickets from a web-
based ticket sales robot, look closely at whether it is
owned by an airline (as Travelocity.com was until recently
owned and controlled primarily by AMR, the corporate parent
of American Airlines, and as Trip.com is owned primarily
by airline-owned reservation system Galileo/Apollo).
In an effort to deprive the public of the independent advice
of travel agents who might recommend their competitors, USA
airlines have so reduced the commissions they pay travel
agents for issuing USA and Canada tickets that most agencies
have found it necessary to charge fees for this service.
Are travel agents' services worth paying for? Surveys by
journalists and consumer organizations have consistently
found that good travel agents can use their expertise in
finding the best fares to save most travelers enough money
to cover the agents' fees. This shouldn't be surprising
when one considers that the CRS's on which all airlines,
travel agents, and robotic Web-based ticket sales sites rely
for their data are owned by one or more of the airlines, and
are optimized for their purposes: getting you to pay more,
not less. The last thing CRS's are optimized for is getting
travelers the lowest prices. It takes considerable skill and
practice to use these tools to achieve a purpose directly
contrary to the developers' intent.
But in theory, the best published fare for any domestic USA
flight should be available directly from some airline, if
you knew exactly what to ask for. If you fly often enough,
and value your time cheaply enough, to make it worth
investing your time in learning to make your own
reservations, you can eventually learn to do almost as well
for yourself on domestic USA tickets, in many cases, as all
but the best travel agents.
Don't waste your time, or that of a travel agent, by calling
international ticket discounters for discounts on flights
within North America.
The best deals on airline tickets for travel within North
America are special "Visit USA" and "Visit North America"
fares for foreign visitors that are sold only outside North
America. So foreign visitors should buy their tickets for
travel within the USA in their home countries, and should
not expect to be able to get cheaper prices once they get to
the USA. Tickets within North America are invariably at
least as expensive at the last minute as if you plan ahead,
and usually much more expensive. Drastic "last-minute"
discounts are, for the most part, a myth.
From time to time, some agencies are able to offer discounts
on certain airlines for short-notice travel within North
America, but in all but a few cases their prices are
comparable to, rarely lower than, the lowest advance-
purchase fares. So they are worth seeking out for last-
minute travel, but less likely to offer significant
advantages over published fares if you can plan ahead.
These domestic USA consolidator deals -- amounting basically
to waivers of advance-purchase requirements -- change often,
and are structured and marketed to make sure that these
tickets are not usable by last-minute business travelers.
Most travel agencies -- including most brick-and-mortar
travel agencies *and* most online agencies -- are useless in
finding consolidator tickets. Going to three different
published-fare Web sites and asking for prices on the same
flights is like going to car dealers and asking each of
them, "What's the manufacturer's suggested retail price of
this car?" One of them may point out a model you hadn't
known about, but all else being equal they'll all tell you
the same list price, and looking at multiple sites that only
list the same published fares is largely a waste of time.
Don't be misled by claims to "guarantee the lowest fare".
All that means is that the lowest applicable *published*
fare. So what? You want an agency that charges less than
the published fare. (The new airline- owned online travel
agency Orbitz.com uses the even more misleading term,
"publicly-available fare", as though consolidator prices
weren't publicly available.) Unless an agency specifically
advertises "consolidator" prices or "prices lower than the
airlines", you can assume that their offerings are limited
to published (list) prices. If you want discounts, you have
to go to a discounter. How do you find one?
There is no single source of information or comparisons of
prices from different consolidators. Each lists only their
own prices. At present, there are only a few major
consolidators for domestic USA flights and flights within
North America (the USA, Canada, and the Caribbean), as
discussed below. These are listed merely as a convenience,
*not* an endorsement. Caveat emptor.
To avoid surprises, be sure to ask about all taxes, service
fees, and charges for ticket delivery or other incidentals.
Get a total ("What is the total amount that will be charged
to my credit card for airfare and *all* other fees and
services?") before you agree to pay anything.
* Cheap Tickets (cheaptickets.com) sells mostly by phone,
but does an increasingly large part of its business through
its Web site. Prior to Priceline, Cheap Tickets was
probably the single largest consolidator of domestic USA
tickets. The Cheap Tickets Web site lists *only* their
consolidator prices; it's up to you to check a published-
fare site to see if a published sale fare might be lower.
* 1Travel.com / Onetravel.com is the least-known of the
major online domestic USA consolidators, but offers the
widest array of choices and, as of now, the only integrated
display of comparative display of published and consolidator
prices. Of course, they list only their own consolidator
prices, so some other consolidator might have a lower price.
But at least you don't have to check a separate published-
fare site to see how their consolidator prices compare to
current published sales. They also offer (in the same
integrated comparison), so-called "white-label fares" that
offer many of the advantages of tickets from Priceline
without the drawbacks of hidden prices or unforseeable
schedules. These "white-label" prices are listed with the
number of connections, approximate time of day, and price --
everything except the airline name, which is provided only
after you have paid. (The most efficient interface to the
white-label fares is at , after
you first select flights and then click on "Farebeater
Ultra" to get cheaper options.)
* Hotwire.com's entire concept is an imitation of
1Travel.com's "white label" fares. The differences are that
(1) Hotwire sells *only* these tickets on unspecified
airlines, so you have to do your own comparisons of
published and consolidator fares through some other source,
and (2) in exchange for giving them shares of ownership in
Hotwire, Hotwire has gotten more, larger airlines to offer
tickets through it than through 1travel.com. It appears
that Hotwire has agreements with most of the airlines that
participate in Priceline, and that Hotwire's prices are
similar to the lowest offers Priceline is willing to accept.
So Hotwire seems to have eliminated any reason to bother
with Priceline, even as a last resort. Hotwire initially
sold only domestic tickets within the USA. In February 2001
Hotwire announced that they had started selling
international tickets as well. But their international
offerings still appear to be limited, and it's still too
soon to tell how their international prices will compare
with other (online and offline) consolidators.
* Priceline.com is a consolidator with the huge disadvantage
that they don't reveal their prices. Don't confuse
Priceline with an auction. Priceline says themselves that
they are not an auction. Priceline has contract prices with
airlines just like any other consolidator. "Name your own
price" is just a pricing mechanism. It ensures that you pay
as much as you are willing, and no less. If you offer $50
more than Priceline's contracted cost, or $500 more, the
airline (in most cases) gets the same amount. Priceline
pockets the difference. Individual offers to Priceline are
not sent to the airlines, not are they individually
evaluated by the airlines -- they are evaluated only by
Priceline to see if you have offered enough more than
Priceline's contracted cost to make it worth their while. In
most cases airlines don't even know how much you have paid,
or how much Priceline has made on your tickets. It's
throwing money away to make an offer to Priceline unless
it's lower than the price from Hotwire or 1Travel.com, and
it's unlikely that such a lowball offer will be high enough
for Priceline to accept. So why bother?
* Microsoft Expedia's "Flight Price Matcher" is an imitation
of Priceline's hidden-price system. (Microsoft recently
paid Priceline to settle a patent infringement lawsuit.)
I've seen no evidence that Microsoft has set their minimum
acceptable profit margins any lower than Priceline, or that
Microsoft has negotiated lower costs from the airlines than
Priceline. You can't make offers to two such services at
once without risking having both accepted, nonrefundably.
So I can't see much reason to bother with this also-ran
unless you just feel better about giving your money to Mr.
Bill than to Priceline's rival billionaire Jay Walker.
In April 2001 the largest online travel agency,
Travelocity.com, which from its founding had limited its
offerings to published fares, finally bowed to competitive
pressure and began adding consolidator prices for air
tickets. Microsoft Expedia has also begun offering some
regular consolidator prices, not just its "Flight Price
Matcher" scheme. But Travelocity.com and Expedia.com are
still newcomers and minor players in the consolidator game,
and it's too early to tell how succesful their imitations of
1travel.com, Hotwire.com, and priceline.com will be.
Lowestfare.com used to have an exclusive deal with TWA
giving them discounts on all TWA fares, but TWA was able to
get the deal terminated as part of its bankruptcy, and it
won't be transferred to TWA's new owner, American Airlines.
(Lowestfare.com remains one of the larger online
consolidators for international tickets, however.)
Further discussion of online sources for *domestic* USA
tickets is beyond he scope of this FAQ. I dealing with
these issues in much more detail in my latest book, "The
Practical Nomad Guide to the Online Travel Marketplace".
5. INTERNATIONAL AIRFARES
Unlike domestic fares in the USA, international airfares
remain regulated, and the official fares published by the
airlines give little indication of the actual prices at
which agents sell tickets on those airlines. It's as much a
waste of time to consult Travelocity or any other Web site
for international airfares (especially for more complex,
long-haul, or multi-stop itineraries) as it is to call a
travel agent (rather than checking airline fares yourself on
the Web) for travel within North America.
The differences between domestic and international airfares
are largely due to the differences in how they are, or are
not, regulated. Unlike deregulated domestic USA airfares,
international airfares are regulated both by international
treaties and by an international airline price-fixing
cartel, the International Air Transportation Association
(IATA).
It's worth noting that *every* USA-based airline operating
scheduled international passenger flights has *voluntarily*
joined IATA. USA airlines' invocations of "open markets",
"free trade", and "open skies" can be dismissed as
completely hypocritical and self-serving drivel until such
time as they exercise their right to withdraw from IATA, as
any of them could at any time. USA airlines are allowed to
participate in IATA "traffic conferences" only because of a
special exemption granted them from USA anti-trust laws which
normally forbid such industry-wide collusion on prices.
Why do airlines join IATA? What is the reason for any
cartel? It exists to keep prices, and airlines' profits,
artificially high.
International airfares are set by international agreement
and regulated by the airline cartel, IATA. Most
international airlines are closely related to, if not
directly owned by, their national governments. Most
governments in turn have an interest in protecting the
profits of their national airline, and the IATA fares are
therefore set artificially high.
As a condition of membership in IATA, airlines agree
(voluntarily, remember) to sell tickets only at
IATA-approved prices. IATA rules officially prohibit
discounting, and in some countries these rules are actually
enforced -- one reason some countries have no local ticket
discounters (although tickets originating in those countries
can often be bought in other countries, if you know where to
look).
Airlines like the cartel because it raises the prices paid
by price-insensitive business travelers. But it's not the
whole story. If airlines sold tickets only at IATA fares,
they would have too many empty seats that might be salable
at less-than-official prices.
The revenue-maximization problem for the airlines is how to
get some money for seats that can't be filled at official
fares, without destroying the benefits of the cartel by
allowing people who would be willing to pay full fare to get
away with paying any less.
The system the airlines have developed for preserving the
cartel while actually selling discounted tickets at less
than official fares relies on the intermediary of the travel
agency, and the loophole that neither IATA nor international
airfare treaties restricts how much commission an airline
can pay an agent for selling a ticket. So the airline can
pay a large commission to a travel agent, then turn its back
and avert its eyes while the travel agent rebates some
portion of the commission to the traveler.
All sales of international tickets on scheduled airlines at
less than official fares are made through travel agencies,
not directly by the airlines, and ultimately depend on
rebating of commissions by travel agents to customers. This
is how travel agencies can and do, quite legally, offer
lower prices for international tickets than the airlines
themselves.
Airlines know what is happening, of course, but they have to
pretend they don't. In order to maintain plausible
deniability and keep their hands clean with IATA, airlines
must maintain the fiction that all tickets are sold at
official fares. Since airlines cannot admit that they are
even aware of discounting, airlines cannot admit to any
knowledge of agents' actual discounted selling prices.
Strange but true: by the nature of the system of
discounting, airlines do not usually know themselves, and
couldn't admit to knowing if they did, by which agents or at
what prices their tickets are most cheaply sold.
All official fares are "published" either in hardcopy in the
Official Airline Guides (OAG) or the Air Tariff, or
electronically in the computerized reservation systems
(CRS's) such as Sabre, Apollo, Amadeus, Worldspan, and
Gabriel. By the very nature of the IATA price-fixing
system, airlines cannot admit any knowledge of the fact that
agents are selling tickets for less than the official fares.
So only published fares are shown in any CRS. Since all the
major CRS's are owned by the airlines, no CRS contains any
publicly accessible information on agents' actual discounted
selling prices.
The glut of *official* international fare information
available through gateways to CRS's such as GetThere.com,
Travelocity, Microsoft Expedia, etc. is deceptively
comprehensive-seeming and impressive but fundamentally
useless in finding discounted prices. If you want to pay
less than the official international fare, you have to buy
your ticket from an agent who gives discounts, not from an
airline directly or from a source (such as a CRS Web site)
that is limited to published fares.
6. FINDING INTERNATIONAL TICKET DISCOUNTERS
I'm often asked for a list of good discounters, but there is
no such comprehensive list. The closest things to it are
the lists of wholesale suppliers maintained by the best
retail discounters. But those are lists of wholesalers, and
wouldn't do you any good even if any agency were willing to
reveal its list of suppliers, which none with a list worth
anything would do. (Discount retail agents compete at
negotiating deals and tracking down wholesale suppliers, and
guard their information about prices, commissions, and
suppliers zealously.) Any list of retail discounters would
become obsolete too quickly to be useful. Instead, I'll try
to give an outline of the types of international airline
ticket discounters and how to find them.
Many people have heard that they can get cheaper deals from
"consolidators" or "bucket shops" than from the airlines.
I'll try to explain what these terms mean, but their
meanings aren't universally agreed upon even within the
industry. If you want a discounted ticket from point A to
point B, the best way to start your enquiry to a travel
agency is *not*, "Are you a consolidator" (they may say,
No", because they are a retail agency and consider the term
"consolidator" to apply only to wholesale-only agencies)
nor, "Are you a bucket shop?" (they may say, "No", because
they consider "bucket shop" to be an insulting, pejorative
term). Ask, "Do you have discounts from point A to point B."
"Consolidator" and "bucket shop" are sometimes used
interchangeably, but aren't exactly the same.
Consolidators are agencies that have discount agreements
with the airlines. In most cases, especially with the USA
and other big airlines, consolidators are wholesalers who
sell only through retail agencies, not directly to the
public. In any case, wholesale consolidators do NOT offer
retail service. If you want a straightforward round-trip
ticket, know what airline you want to go on, and exactly
what dates, and that airline has the best route and price,
fine. But of course many itineraries aren't like that, and
most people need a retail agent's help to figure out what's
the best ticket for them.
Most publicly-available lists of "consolidators"
indiscriminately mix wholesale consolidators who also sell
directly to the public with retail bucket shops. But retail
customers are charged more than wholesale customers by the
same consolidators, so you can often get the same price --
and better service, and advice -- by going through a retail
agency even if the wholesaler is (minimally) willing to deal
with you directly.
Any retail travel agent can buy tickets from consolidators,
and most USA agents who do significant international
ticketing are familiar with some of the biggest
consolidators for major carriers. Bucket shops are retail
agencies that specialize in knowing the full range of
consolidators (every airline has many consolidators) and in
knowing other techniques of fare construction, importing
tickets, etc. for discount prices.
Consolidators basically fall into three categories:
(A) Wholesale-only consolidators
These generally have no retail sales or advertising, and
don't want to be known to the general public. (You may have
seen the names of some of these consolidators, however, in
the validation box of tickets bought through a retail
agency.) These are the consolidators most local travel
agents know about. They generally deal only with round trips
originating in the country where they are based, and are
common in the USA, UK, and Australia, among other countries
They advertise only in the travel agency trade press, not in
consumer publications. Often they forbid retail agents who
buy tickets from them from giving out their direct contact
information, since their thin wholesale margins include no
allowance for retail customer service. They will not sell
directly to the public; if you aren't really a professional
travel agent, they will figure it out.
(B) Destination specialists
Agencies that specialize in a particular destination or
region often have negotiated discounts on tickets to that
region which they offer both to their own (retail)
customers and to other agencies as a wholesaler. frequently
an agency operating and retailing tours to a particular
country will have a discount agreement with the airline it
uses for its tours (generally the national carrier of the
destination) and will also sell wholesale tickets on that
airline. One reason they do the wholesale business, even if
their markup on wholesale tickets is very low, is to boost
their volume of production (sales) with the airline, as many
discount contracts are contingent on a specified sales
volume, and/or have year-end bonuses or additional
commission rebates based on sales thresholds. Sometimes they
are "general sales agents," that is, official
representatives of an airline (usually a small one) that
doesn't have service or its own office in a country.
You can often find agencies like this through publications
targeted at immigrants from the country you want to go to.
Even in foreign-language ethnic publications the travel ads
are generally recognizable, with at least the phone number,
the destination cities, and the round-trip prices in Latin
letters and numbers! Even more than general bucket-shop ads
in the Sunday newspaper travel supplements, a quick glance
at the ethnic press will give you the best idea of the
absolute lower limit of possible prices for tickets bought
long in advance for travel in the most unpopular season on
the worst airlines with the worst connections in the most
undesirable or expensive stopover points.
But if you want the cheapest possible round-trip from the
USA home to India, Ireland, Nigeria, or wherever, no
general-purpose agency, even a general discount agency, is
likely to be able to beat the lowest prices of a no-service,
bare-bones, specialist agency within that particular ethnic
community that sells nothing else but a massive volume of
round-trip tickets to a single destination.
Realize that the lowest advertised price is usually either a
loss leader and/or a bait-and-switch gambit to attract
callers. The lowest advertised prices for transoceanic
tickets from the USA, for example, generally range from
wholesale cost for the cheapest ticket to about $20 below
cost. It is unlikely that you will actually get a ticket for
your itinerary at these prices.
Most advertised prices are exclusive of taxes and perhaps
other fees; even in the most expensive season the lowest
advertised prices are usually for travel in low season,
whenever that is.
On the other hand, shopping solely on price is a good way to
ensure that the agency from which you eventually buy your
ticket has cut its margin so thin that they can't afford to
provide an acceptable standard of service. And even
price-sensitive travelers, especially those who aren't
intimately familiar with their destination, may find that
it's worth paying a bit more for reliability, service, and a
modicum of advice.
(C) "Bucket shops" and other multi-stop specialists
These are discount retail agencies that specialize in trips
more complicated than simple round trips, often to a wider
range of destinations or to multiple destinations. Many
bucket shops negotiate their own deals directly with the
airlines for routes where they can't get good (or any)
discounts from (A) or (B). They use these deals for their
own retail customers, and frequently also to sell to other
bucket shops. (Sometimes they negotiate these deals
specifically to be able to export the tickets to bucket
shops in other countries, as when a Singapore bucket shop
gets permission to discount tickets originating in the USA)
Bucket shops' own deals tend to emphasize one-way tickets,
which are essential for constructing around-the-world
tickets and which often aren't available from other
general-purpose consolidators.
7. LAST-MINUTE DISCOUNTS?
Many people have heard that they can get a cheaper ticket if
they wait until the last minute, when "airlines sell off
blocks of unsold seats cheaply to consolidators, who sell
them for whatever they can get". *This is not true.*
Airlines and agencies don't really work that way. It is
sometimes possible to get a cheap ticket on very short
notice, but you rarely get a cheaper ticket than if you had
planned ahead, and it may be impossible to get a reasonable
price, or even to find any available space at all, at the
last minute. Getting the best price on most around-the-world
itineraries requires having tickets issued in several
different places, often on several different continents; it
takes a minimum of a couple of weeks for your agent to
