3 reasons why business class airline consolidator discounts may not be as good as they seem

Business class airline consolidators once ruled the skies. Today, they’re getting farther and farther away in the rearview mirror, which may be a good thing for passengers faced with numerous complex airfare “deal” options when they fly. Back when many major airlines competed for passengers, airlines would sell large quantities of seats to companies in exchange for big discounts. Today, with fewer major carriers competing for customers, there is a much lesser need for airlines to sell their tickets wholesale to consolidators.

3 reasons why not to use airline consolidators

While many companies call themselves consolidators, in reality, most major airlines stopped their consolidation agreements nearly 10 years ago. So, what do these so-called consolidators consolidate today? In truth, not much. The Internet is filled with misinformation about consolidators and how they should be used for international business class cabin travel.

Here are 3 reasons why you might not want to consider using a consolidator on your next flight:

1. A “50% savings!” might not be a savings at all

Many so-called travel experts claim that consolidators can save a traveler 50 percent or more. In reality, there’s no magic wand to slash fares by this amount.

Airlines have three layers of pricing; published fares, contract fares and blowout fares. Published fares are the prices you’ll find on carriers’ websites and tend to be the highest fares. Contract fares are given to agents and are discounted a certain percentage off the already inflated contract fare. Blowout fares are used as promotional ploys to entice travelers to fill up seats during off-peak seasons or historically low capacity flights.

The way these consolidators are able to make this claim is because their 50 percent discount is taken from the highest possible published fare price, which most reasonable passengers wouldn’t consider paying unless their need was dire.

2. “Consolidated” deals are not ideal for flights booked far in advance

Business class fares for travel tomorrow between San Diego and London could start at $8,000 or more. If you must fly to London without any planning, a consolidator may help by slashing a last-minute fare in half from $8,000 to $4,000.

But how many international travelers fly business and really wait to the last minute to purchase? According to studies, fewer than 15 percent of people purchase flights fewer than seven days from their travel date. Since most people plan and purchase airfare months in advance, consolidators will likely cost them more money rather than less.

Advance purchase typically has little impact on international fares purchased through consolidators. Whether the San Diego to London example was purchased six months or six hours in advance, pricing through a consolidator will likely be unchanged. According to flight data reports, the 12-month low for business class fares between San Diego and London is $1,180 + taxes, based on a 28 day advance purchase. A leisure traveler planning a trip to London 6 months in advance could call 100 different “consolidators” but will never find the $1,180 fare. Why? At these low fare levels, an agent/consolidator has no margin for profit.

3. Consolidators may pressure you to jump the gun on a flight price too early

In a perfect world for the airlines, they would sell all their business seats for $8,000 or more. The reality is there are too few travelers willing to pay $8,000 or even $4,000 to fill all seats over all departure dates. So, just like any asset, airlines start the bidding for their business class seats high. A few anxious travelers may turn to a consolidator too early and overpay, but not enough to fill all departure dates. When carriers believe they’ve run out of price insensitive travelers, the real fun begins as fares can plummet up to 90 percent in a matter of minutes. Carriers make these fares available via their own website or any mainstream travel website (such as Orbitz or Expedia). Carriers don’t promote or advertise these steep discounts. They just slash fares up to 90 percent, sell as many seats as they deem necessary, and then restore fares higher than they were before the fare cuts began.

Remember that agents, wholesalers and consolidators are all salespeople. They don’t get paid until you buy. The name of their game is about creating pressure and a sense of urgency for you to part with your money before hanging up the phone. Unless you are traveling on short notice, there’s rarely a need to call a consolidators.

Lars Condor is the Managing Director of Passport Premiere.

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Comments (6)

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  1. Bob Merrick says:

    Thanks for some good tips. I will stay away from the so called consolidator discounts. I think the real solution is to spend some time researching business class seats and waiting for the right opportunity. It is not easy, but your advice here will at least keep me from going in the wrong direction towards consolidators.

  2. Deborah Elliott says:

    I disagree with the above. A consolidator can offer fares that permit a longer option time, no Saturday night rule, more flexibility with fares that permit amendments and fares which, with accommodation included, can definitely help reduce costs. The rule is not to rely totally on consolidated fares, but to check all options.
    As for business travellers, they do often book last minute and so miss out on the cheaper advance purchase deals.
    A good travel agent will check out all options!

  3. Lars Condor says:

    Don’t mean to rub it in and say ‘TOLD YOU SO,,,BUT WE DID!!!’ Yesterday, business class fares with One World and Skyteam carriers between the U.S. and Europe started at $3000 on most routes. Today, a massive devaluation has taken place. The most extreme examples have caused business fares to London to plummet to just $362!!! Think you will ever find $362 business class + taxes with a consolidator on BA to London from a U.S. city? NEVER. Why, there’s no margin for humans to make money when fares fall this low. If you want to walk through life with blinders on believing that business class is filled with $5,000 + buyers then go ahead. The truth is that as oil and commodity prices fall, deflation continues to plague premium cabin travel. Most of the industry and retailers are in denial, but its happening

    DON’T BE A FOOL AND DON’T OVERPAY! Wait for opportunities to happen like what’s happening today and don’t let them pass when they do

  4. Flexible travelers and those traveling solo do have the luxury of gambling by booking late. Group travel is a whole different story and often fares are refundable thru a consolidator. Prices are usually lower when I’ve used one. I think there still is a use for them.

  5. Nick says:

    I work for one of these consolidators. I think this is a great article. I disagree with a few technical parts, but it’s well written and covers the broad strokes. What I agree with is the point of the article is that airline prices move. People ask me all the time, “is this fare going to drop later?” I tell them honestly that I don’t know. The truth is that you cannot time airline prices well. You would have to check them every day. But then you also run the risk of losing the lowest fare inventory. Fares go up, as a trend line, right up to departure, because there are less seats to buy. So waiting is not the best option. I tell my clients, book when you are ready, when you are comfortable. It’s not worth the energy to try to time it. On a final note, at our company we can discount almost anything. My average discount, year to date, is just above 16%. What that means is that most of the time, I only knock off 5-10%, and every once in awhile, I hit it out of the park with a 30-40-50% discount. I think that it really matters who you deal with, and I don’t mean my company necessarily. You have to find an honorable, dedicated agent, who will look after your best interests, not their commission check. That’s the hard part.

  6. Nick says:

    On another note, the cheapest season for business class is summer. The most expensive is fall. Just FYI

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