Overview of Airline Consolidators: Their Business model, Role and Advantage Flight consolidators are brokers that book discounted airline tickets in bulk and then resold them back to travel agencies. These pre-Internet survivors are still active and vital in the distribution of air tickets. This article will explain why airfare wholesalers are still in demand, the problems they solve and how their air offers differ from standard fares that you can find online.
How the airline consolidator model works: The 1970s and 1980s were when large consolidators first appeared. This was when airlines had more seats that they could sell through travel retailers. The following distribution model was created to achieve full occupancy or near full occupancy on less-popular routes. 1. Consolidators and airlines negotiate net airfare for large blocks of seats that are difficult to fill. The discounts on the risky inventory range from 30 to over 60 per cent. 2. Consolidators transfer net fares to travel agents and charge a premium for each seat. Premiums rise in peak season when it is more difficult to obtain tickets. Travel agents have a significant margin to make money in any case. 3. Although travel agencies charge a markup, they still offer lower prices than the market rate offered by airlines. Consolidators usually purchase all allocated seats after a contract number of travelers has paid for them.
Benefits of partnership with air consolidators for airlines: Carriers often use consolidators to help them offload excess inventory. The number of bulk tickets available and the discount percentage will vary depending on whether the flight is domestically or internationally. International flights vs Domestic flights: International airfares are heavily regulated by IATA(the International Association of Travel Agents), which tries to maintain high ticket prices and, consequently, airline profits. IATA bans discounting by airline published fares or airfares available to all vendors. Carriers understand that while they share the same goal of selling tickets at the highest possible price, they also know that they won’t be able to load their planes full-size at official rates. What's the solution? Consolidators can help you sell a portion of your inventory at a discounted price. IATA and international treaties do not prohibit this practice. Local regulations govern domestic airfares. In the USA, the world's largest travel market, carriers are allowed to set their fares and change them at short notice owing to the 1978 Airline Deregulation Act. This allows local carriers to offer lower prices without the need for mediation.