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Copyright: (c) 1991-2016 Edward Hasbrouck
Maintainer: Edward Hasbrouck <firstname.lastname@example.org>
1. About this FAQ
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
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 articles.
This FAQ is no longer maintained, but is preserved here for reference. If you have questions after reading this FAQ, there's a good chance you'll find them answered in my blog or in my books: "The Practical Nomad Guide to the Online Travel Marketplace" (2001) and "The Practical Nomad: How To Travel Around The World" (5th edition 2011). 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 <http://hasbrouck.org>.
The latest version of this FAQ is available at: <http://hasbrouck.org/faq>
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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 travel agencies where I have worked have all specialized 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.
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.
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.
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".
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.
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:
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.
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.
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.
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 import these tickets for you from overseas. (This is why, if you must leave right away, you may have to pick up some of your tickets from your agent's overseas affiliates as you travel, an arrangement few people prefer and which can usually be avoided by advance planning.)
Airlines wait until they have a good idea how full their planes will be (based on advance booking levels) before they decide how deeply they need to discount their tickets to consolidators to fill their planes. So consolidator contracts with the airlines are subject to change, usually several times a year, and generally forbid sales of tickets for travel commencing more than a few months after the sale. Verifying prices with vendors around the world, and then importing tickets, can take a couple of weeks (unless you want to pay extra for air courier service).
So you can't expect to get the best price, or to get your tickets, many months ahead (except for times like Christmas, when prices are set and planes fill up many months in advance).
On the other hand, it shouldn't take more than a month to get your tickets from a reputable, efficient agency -- barring unusual complications. (The most justifiable complication, especially with a complex ticket, is that one of the rates has changed and a different source or fare construction has to be found. Customers find this hard to understand, but it isn't always possible to call or fax an overseas -- or even a domestic -- supplier to verify every fare in their tariff, which is always subject to change, before quoting a price to the customer.)
Should you buy from a discounter? I wouldn't think of buying an international ticket from a neighborhood travel agent, even if I told them to try to find a consolidator fare. Depending on your itinerary, try either an agency specializing in that destination and/or a bucket shop. You'd be surprised how often local agents, when they have a customer for a weird destination or routing (especially around the world) simply buy the tickets from a bucket shop and mark them up to the customer.
You'll get the best price if you shop around, but remember that rating an around the world itinerary can take an hour of work (for which the agent is paid nothing if you end up getting the ticket elsewhere). So don't be surprised that the fare isn't in the computer and can't be given off the top of the agent's head; the agent will give only a very rough estimate of the fare unless you make clear that you are really serious about getting the ticket from that agency if the price is right.
Bucket shops serve a limited and specialized subset of the air ticket market, and are mostly concentrated in a few world cities.
The best places to find them are London and San Francisco; other places with many are Penang and Kuala Lumpur (Malaysia), Bangkok, and Athens. It's worth looking far afield to find a good bucket shop -- the overwhelming majority of travel agents don't even try to compete with bucket shop fares. For that matter, most agents couldn't construct the sorts of routings the better bucket shops specialize in (especially customized around-the-world itineraries) at any price. In the USA, most bucket-shop advertising is concentrated in the Sunday travel sections of the San Francisco Chronicle and Examiner, Miami Herald, New York Times, and Los Angeles Times. There are ads for discounted international tickets in newspapers in many other regional and local USA cities, but one can often get better deals from the agencies that advertise in the largest gateway cities. This is especially true for travel to less common destinations (i.e. outside North America or Europe), and most of all for any trip involving destinations on multiple continents that can't be ticketed as a round trip.
That doesn't mean you have to, or that you should, actually travel to one place for the purpose of buying tickets there to somewhere else. Travel agents anywhere in the world can issue tickets originating anywhere in the world. An elaborate network of international agreements has been established to ensure that a customer in any country W can buy a ticket from a travel agent located in country X for a flight from country Y to country Z. If a local airline office or travel agent tries to tell you that you can't import tickets from an agent abroad, ignore them.
Not all agents are set up to deal with overseas customers, but some are. Anywhere you would think of going to buy cheap onward tickets, a good bucket shop can buy them for you at wholesale, from reliable wholesalers with whom they have established relationships, and send them to you so you have them before you start your trip. And to the extent you know where you are going, it is generally cheaper to get one set of tickets to your complete set of destinations in advance than to buy tickets in several stages en route or from different agencies.
But buying your ticket from an agent in another country doesn't have to mean going to the place where that agent is, or waiting until you get there, to buy your tickets. The Internet has made it far easier than ever before to deal directly, from home, with an agent in another country.
When, where, and for what types of tickets is it most likely to be worth dealing with an agent in another country?
There are transaction costs (in money, time, and convenience) associated with importing tickets from an agent in another country, rather than dealing with one where you are. (This remains true even if most of your dealings with them are via the Internet.) For this reason, it is most likely to be worth the extra effort and extra cost of shipping tickets, etc. to get tickets from an agent in another country if some or all of the following apply:
There is no comprehensive list of discount agencies on the Internet, and not all agents are set up to deal with customers in other countries. Consolidators of one-way and round-trip international tickets in most countries limit their sales to customers in their own countries, and are only beginning to implement the complex software required to offer tickets online. (Most reservations software has been developed by airlines who want you to pay more, and don't want to make it easier to find consolidator tickets. Online consolidator pricing and ticketing has proven much more difficult that anyone who has attempted it has expected.)
There is no single site -- not even a bad one -- for comparing prices from different consolidators in the USA. Each online consolidator has a completely separate system for their own prices only. (In the UK, Farebase, <http://www.farebase.co.uk>, is an independent information aggragator who offers online access to prices from several dozen major UK consolidators. But the site doesn't enable you to check availability -- i.e., the prices you are shown may be sold out -- and it refers you to local UK agents of varying competence, not the consolidators themselves. All prices are in British Pounds, and most agents listed in Farebase won't sell to customers outside the UK.)
What can you do if you aren't in a country like the USA, UK, or Australia where there are plenty of local consolidators? One source of listings for multi-destination specialists willing to deal with customers in other countries, neither comprehensive nor a guarantee of price, service, or reliability (despite its efforts to ensure that its members meet its standards), is the Association of Special Fares Agents (ASFA), an international trade association of discount agencies, <http://www.asfa.net>. But keep in mind what I said earlier: for round-trip tickets to a single destination, the lowest prices are usually from specialists in that particular destination, not from multi- destination specialists like most of the ASFA members. And for any tickets from the USA, UK, or Australia, the best deals will usually be from discount retail agencies in those countries.
How do bucket shops offer better prices for complex international trips? For one thing, simple specialization. Almost all air tickets sold in the USA are domestic round trips (the majority) or the simplest international round trips (mostly to resorts in the Caribbean, Mexico, or perhaps Europe). I haven't the faintest idea what the price of a package to Disney World is, and the agency I work for does not handle domestic USA tickets or simple international round trips. On the other hand, most agents have never booked a ticket to Moscow in their life, and might get one around-the-world customer a year. I get round-the-world enquiries every day. "You need to go to Manila, Moscow, and Paris? No problem. Of course, no airline flies directly from Manila to Moscow, so the cheapest route would be as follows..."
How do they get their fares? That's an extremely complex question, which I can't answer fully both because (1) it would take too long and (2) I can't divulge all my trade secrets. I've tried to give an introduction in the section above on "international airfares".
Bucket shops subvert the airline cartel conspiracy against discounting in various ways. Airlines can contract with wholesalers ("consolidators") to sell tickets at less than published fares. The rules on routes, stopovers, seasonality, etc. for these tickets are governed by the contract, not by the rules for any published fare. Sometimes bucket shops contract directly with airlines and sometimes they buy and resell tickets from consolidators. Since the goal of the airlines is to get each passenger to pay the most they are willing to pay, airlines try to discount tickets in such a way as to fill otherwise empty seats rather than divert full-fare passengers to cheaper tickets.
Frequently, they restrict how consolidator tickets can be advertised, such as forbidding mention of the name of the airline or allowing the discount fare to be promoted only to a particular geographic or ethnic market. It's common for tickets to be most heavily discounted in a place far (even on a different continent) from where the ticket either begins or ends, so as not to depress the primary market. If a consolidator fare is too successful, the airline will raise the fare or terminate the contract. Many consolidators won't deal directly with the public, and net fare tariffs are confidential. One of the most important skills for a bucket shop agent is having a feel for the wholesale ticket market. It's one thing to ask your local agent to try to buy you a consolidator ticket. It's quite another for the agent to know who, and where, has the best price for what you want.
Other consolidators, and some retail agencies (especially those with a large volume on one airline to one destination, such as those serving specialized ethnic markets) receive more than the standard commission on some or all of the published fares of a certain airline to certain destinations. This is permitted by IATA rules. The "incentive," "override," or "bonus" commission is officially forbidden to be rebated to the customer, but of course is. (In fact, bucket shops often end up with a smaller commission, as a percentage of the selling price, than normal agencies.) Figuring the actual price to the passenger with such commission deals is particularly complex, since one must satisfy all the conditions of both the published fare and the commission deal. Net fare contracts usually have much simpler rules. (For example, the cheapest ticket may be issued at a higher fare that also has a higher commission. For this reason, and because net fare tickets usually carry the "full" fare as their official price, the "face value" of a ticket need bear no relation to the price paid. All else being equal, the higher the face value of the ticket the better, since in general high-value tickets are more readily changed, rerouted, etc.)
Finally, the bucket shop business is global. Your local travel agent might buy from a domestic consolidator, but they WON'T import your ticket from overseas (and probably have no idea that it is even possible), even if that would be much cheaper. The major bucket shops around the world regularly buy from and sell to each other. Costs of DHL and international faxes are less than the wide international variations in ticket prices.
There's a lot more to it (especially in constructing routes and connections, which no CRS does well for complex international routes), but much of the role of a bucket shop is that of a ticket broker, buying for its retail customers on the world wholesale ticket market. Most bucket shop tickets, if you inspect the validation, are not issued by the bucket shop itself.
If you already knew exactly where to buy them, you could often get a slightly better price directly. But the odds are you couldn't find the best deal for yourself -- the whole system is deliberately stacked against just that.
Round-the-world tickets are the epitome of the bucket shop agent's art. Don't be fooled by published around-the-world fares. They restrict you to the extremely limited routes of just one or two airlines. Only rarely are they the best deal; to put it another way, only the rare itinerary can be shoehorned into such a fare without mangling it. Most around-the-world itineraries can be best and most cheaply ticketed as a series of one way tickets from point to point. Constructing a round-the-world fare requires both deciding at what points to break the circle into segments and getting the best price for each segment (where each ticket may actually, with stopovers, cover several legs of the journey). On top of that, most people aren't sure when they start planning a round-the-world trip exactly what stops they want, or in what order. Good round-the-world agents are rare, even in bucket shops -- but your average travel agent doesn't even know where to begin.
Bucket shop reliability varies. Caveat emptor. They tend to be wheeler-dealers, and of necessity they cut their margins thin. Find out how long they've been around. Check them out with the Better Business Bureau. Go to their office in person, if you can. If it's worth it to your peace of mind, pay by credit card so you can refuse the charge if you don't get your tickets. You'll probably be surcharged 2-5% for using a credit card, but it's simple, cheap, and effective insurance.
One thing not to believe is favorable references. Except for complete frauds, even rip-off agencies have satisfied customers.
The test is what they do when things go wrong. For what it's worth, I have yet to encounter a completely fraudulent bucket shop, and most are pretty reliable. But you have to recognize that you can't expect the best service at the lowest price. It's especially important to remember that fares change constantly and that no estimate is certain until the tickets are actually issued. (Amazingly, airlines claim the right to increase fares even after tickets are issued, but I've never seen them do so.)
Be especially cautious about buying tickets from a "sub-agent" or an agency which is not accredited by the International Airline Travel Agents' Network (IATAN) and, in the USA, the Airline Reporting Corporation (ARC). Sub-agents and non-ARC/IATAN agents cannot issue any of their own tickets, but must purchase them all from other agencies, wholesalers, or the airlines. Since the basic qualifications for ARC and IATAN appointment are proof of financial means and ticketing experience, non-ARC/IATAN agents are, by definition, inexperienced, under-financed, or both.
If you have any doubt, you should try to check directly with the airlines, immediately before paying for your tickets, to make sure that you are holding confirmed reservations. This is not always possible, as some of your flights may be on airlines that have no representation in the country in which you are buying your tickets. (Don't try to request seat assignments or other special services, or enter frequent flyer numbers, until after you have your tickets in hand. Just verify that you have reservations on the flights you want. Some special prices forbid or restrict things like advance seat assignments or frequent flyer mileage credit, and by requesting such things prior to ticketing you could cause your reservations to be canceled or render your reservations ineligible for the special fare.)
If a travel agent has placed you on a waiting list, you may be able to improve your chances of getting confirmed by calling the airline yourself to ask them to confirm you from the waiting list. Do not be surprised, and do not argue, if the airline mentions that the reservation was made by an agency other than the one you dealt with. It may have been necessary or required for your agent to make the booking through a wholesaler either as a condition of the fare or to use "block" space held by another agent or wholesaler on an otherwise sold-out flight.
Contrary to some ill-advised recommendations that have been widely distributed on the Net, you should not make reservations directly with the airline and then try to shop around for the best price at which to have them ticketed. Nor should you make reservations with more than one travel agency.
Doing this reduces your chances of getting the best price, or of getting confirmed on the flights you want, and may result in all your reservations being entirely canceled without prior warning. More and more airlines have implemented auto-cancellation software for duplicate bookings.
There are many booking classes, and there is no way you can tell in which class to make reservations for the cheapest fare. The cheapest published fare may be booked in one class, the cheapest discounted fare in another. Different discounters may have different contracts requiring bookings in different classes.
Even some airlines that have only one coach booking class require reservations for special fares to be made only by agents either directly with the airline, through designated consolidators, or in special booking classes which are not listed in the OAG and whose existence the airlines won't even admit to retail callers.
Travel agents can more easily prioritize you on the waiting list if they make the reservations for you. Most airlines have at least two, usually three, levels of waiting lists. Names on the regular waiting list -- the only one on which you can place yourself directly -- are considered for confirmation only after all names on the priority list -- on which travel agents can place you -- and the highest priority list, on which you can be placed only by special request by the airline itself. Waitlist clearance requests are more likely to be acted on if they come from the travel agent than the passenger, especially as different airlines have different procedures and the travel agent knows best from whom at the airline to request prioritization.
If a travel agent makes reservations for you, they may be able to use "block" space held by them, by the airline, or by a consolidator for all or part of your itinerary. This may be difficult or impossible if you have already made reservations for all or part of your itinerary, since many airlines prohibit or restrict the combining of reservation records ("split PNR's).
Finally, some airlines refuse even to consider for confirmation passengers holding more than one reservation; some airlines will automatically cancel all reservations, whether or not confirmed, of anyone found to be holding multiple bookings. It is thus imperative that, if you have already made reservations, you advise your travel agent(s) of this immediately. If you don't, the agent may make another booking for you, and both may be canceled. Give the agent the airline with which you made the reservations, the record locator, the exact name(s), airline(s), date(s), flight number(s), and booking class(es). Do not assume that all coach reservations are made (or should be made for the cheapest price) in "Y" class, even if "Y" is the only coach class shown in the OAG, Travelocity, or the airline's own timetable.
Most CRS's do not permit an agent to retrieve, by record locator, a record booked by you directly with an airline, so don't expect them to be able to do so. For this reason it will be more difficult for an agent to assist you with special meals, seat assignments, boarding passes, or in the event of schedule changes or changes in your plans, if you did not make the reservations through that agent. In short, it only makes work for both you and your agent not to make your reservations through your agent.
Airfares are an intrinsically complex system, and much of that system is deliberately obscure. There are so simple, easy answers to some of the most frequently-asked questions. I've tried to strike a balance in this FAQ between simplicity and completeness. If you still have questions, especially questions not answered in my books, please let me know. I can't answer requests for referrals to specific travel agencies for specific destinations (lest I be held liable for the performance of other agencies over which I have no control), nor will I provide lists of wholesale consolidators (they already get harassed by enough retail customers pretending to be travel agents in order to try to get wholesale prices, and supplier networks are valuable trade secrets in any industry). I and the agency I work for only handle around-the-world and other multi-stop international ticketing, but I welcome other questions and suggestions for future versions of this FAQ.
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