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12 Dec, 2022

Airline Consolidators Reviews: Definitions, Nuances and Comparison

Home Blog Airline Consolidators Reviews: Definitions, Nuances and Comparison

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The airline consolidation business has quite a specific monetization model. It aims at plane tickets bought wholesale and then resold to travel agencies by retail. Nowadays, these are alive pre-digital era dinosaurs, which are still operable, competing with contemporary internet companies, and even profitable.

In this article, we’ll investigate this phenomenon and find out:

the reasons why this business niche is still around;
what kind of issues the consolidators can handle the most efficiently;
whether it is profitable to buy from flight consolidators or it’s better to use online services;
a list of typical features the reputable consolidator has;
a comparison of the most noteworthy market players;
a prognosis about the future of this business niche based on recent trends.

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Today’s airline consolidators: a secret of survival

How the airline consolidation business model works

Almost all of the consolidation businesses worth mentioning today were established dozens of years ago.

The circumstances in which airlines worked those days were significantly different from today’s one. With much lower air flight popularity and higher average ticket costs, it was tough to sell all or almost all seats for each flight, except the most popular directions.

As a result, air carriers implemented a brand-new sales model:

For such flights, the airlines determined specific seats which potentially would hardly be sold.
They offered these tickets to consolidators with a discount varying from 30% to 60% and even higher. These discounted prices are called net fares (consolidator fares, bulk fares, or private fares).
Consolidators, in turn, sell these tickets to travel agencies, charging net fares plus certain premiums based on a current demand level.
These prices are still much lower than the regular ones, especially in peak season. This makes it possible for travel agencies to get significant margins, keeping the final prices more attractive than those of carriers offer.
For risk mitigation, the consolidators usually buy tickets to certain flights only after a certain number of seats are presold by the agencies to their customers.

Since this sales model emerged, a lot has happened. Currently, the demand for airline consolidator services has dropped significantly but hasn’t disappeared. Even though the share of tickets sold directly to travelers has massively increased, there is still no chance for the carriers to sell off all the tickets without assistance.

Benefits for airlines

Despite the fact that airlines do business with consolidators on a much smaller scale than in the 1970s and 1980s, this collaboration is still a good way for carriers to sell off their stockpiles of tickets. Both the number of tickets for bulk sale and the size of the discount became more flexible and varied based on a ticket class and destination type (domestic or international).

Eco or Business

Consolidators usually offer the best options for the most expensive seats from first or business class. This explains easily: carriers are highly interested in keeping their retail prices for premium services as high. To do so, they offer their potentially poorly selling premium tickets to the consolidators with a high wholesale discount.

As a result, passengers finally get their discounts, yet the carrier keeps its official prices unchanged. This approach is applicable for regular airlines but not for charter operators, where the premium seats could easily be turned out into economy ones when it is necessary.

Domestic or International

There is a big difference in the regulatory aspects of these two routes.

All international flights are regulated by the International Air Transport Association (IATA). This institution acts on behalf of the carriers, doing its best to keep airlines’ profits higher. One of these measures is to ban any discounts for published fares (offers that are available for all the air vendors selling tickets).

Aiming at the same goal, carriers use a kind of backdoor, selling their international excess inventory to the consolidators with a bulk discount, which is legal. What’s to travelers, they can save up to half of the official price by buying their business class tickets from consolidators.

What’s to the local routes, each country has its own rules for regulating them. Let’s talk about the largest plane ticket market in the world — the USA. Thanks to the Airline Deregulation Act issued in 1978, American carriers can set their fares for local flights and change them easily at any moment, including lowering without any third-party participation. As you can see, the consolidators aren’t in favor here, so an average bulk discount size for local flights is much lower than for international ones.

Benefits for travel agencies

Until the mid-1990s, the air ticket market was quite established. The average retailer commission for this time was about 10%, which is approximately 40% higher than it was before the commissions’ deregulation. Within this period, they were allowed to exclude commission from the price before informing IATA. And the icing on the cake: the best-performing travel agencies also received special rewards from airlines in order to achieve certain KPIs.

The year 1995 marked the beginning of the end of the ticket retailers world in the form it used to be. Since that, the premiums for retailers were cut step by step until they became 0%. This happened as the answer to significant changes — an emerging and widespread distribution of the internet, low-cost airlines’ popularity growth, as well as steadily increasing demand for economy tickets over the business and first-class ones.

These made consolidators the best friends of travel agencies. The difference between consolidator offers and official carrier prices became their main profit source on tickets. But there are other less evident pros travel agencies receive from partnering with the consolidators:

GDSs access

Global Distribution System (GDS) is a software platform that aggregates different aspects of travel activities, allowing travel agencies to combine different kinds of services (for example, air flights, hotels, transfer services, etc.) and form travel packages.

Access to GDS is usually too expensive, especially for the smallest agencies. Thanks to the partnership with consolidators, even a small travel agency can access the best GDSs using their partner’s credentials for logging in.

Sabre: an Entry Guide to Top-Tier GDS

Read our article about Sabre – the world’s #1 GDS system. It contains practical insights and advise from our team regarding various aspects of interaction with this company, including the licensing process, pricing structure, integration issues, etc.

Booking engine included

Most consolidators have their own booking engines, which they offer to their partners. These engines are usually much more user-friendly than the corporate-oriented GDSs, saving significant working time on routine actions every day.

IATA and ARC accredited

Smaller travel agencies often aren’t licensed by IATA/IATAN or ARC. Despite this, partnering with airline consolidators usually allows these agencies to issue new tickets on behalf of airlines.

Creating complex travel products

Just a single consolidator offers airfares from many different airlines. A partnering travel agent can create itineraries of any complexity, combining these vendors at their discretion.

Incredible support quality

Not always, but often, consolidators have high-quality support that is active 24/7. Being in close partnerships with the airlines whose tickets they sell, these consolidators can provide their clients instant help in case of delays, cancellations, or any other unexpected issues.

Airline-grade expertness

Consolidators are mostly mature market players who are very much aware of the industry. This makes them no less valuable airline domain advisors than the airlines’ top managers themselves. Their consultations can be beneficial in terms of routes, regulations, aircraft, best ticket deals, and any other related topics.

Published vs. private tickets

At the first glance, the airline consolidators’ business is beneficial for all the parties involved. Airlines sell more tickets and fill their planes, agencies get a source of revenue, and travelers fly cheaper than the official costs. But let’s compare private (those bought from a travel agent) and published (tickets officially issued by a carrier) airfares to find some limitations private tickets have.

1 Private tickets are always hidden

You can’t find these deals anywhere on the internet, including the official sites of both the consolidator and the carrier. Even advertisements of such a deal will contain something like “THE BEST FLIGHT PRICE EVER” with no mention of this price amount. The only way to know the details of a certain private offer is to receive it right from the agent.

2 There could be a lack of award miles

Quite often, private tickets earn no bonus miles for frequent flyers. Sometimes consolidators have a corresponding agreement with the airline, but it’s not as common as with the published tickets.

3 Cancellation penalties are severe

Within the flight industry, a common rule exists: if you want to save some money, act in advance and be deadly sure in your decisions. For the private tickets, three different parties will charge you in case of cancellation.

4 Use it or lose it

Some private tickets (quite often, to be honest) are burdened by additional conditions and restrictions. A common situation is when you cannot return, exchange, or transfer it to someone else.

A comparison of the most noteworthy airline consolidators

Incredible pricing options make all the existing limitations of private tickets unnecessary. This is the main reason for this business model to remain operable. Now, let’s delve deeper into the existing airline consolidators and compare them.

Comparison of the most noteworthy airline consolidators
	Details	Aimed at	Partners	Technical assistance offered
Mondee	Established: 2011 HQ: Austin, Texas Offices: 17 across the U.S. and Canada	Leisure travel Business travel	500+ airlines 100+ hotel aggregators 900k+ properties	TripPro Rocketrip Tripplanet Unpub
Picasso Travel	Established: 1979 HQ: Los Angeles, California Offices: 6 across the U.S.	Transatlantic flights Long-haul flights Package tours	72 airlines	A website with a personal account Booking engine
Centrav	Established: 1988 HQ: Burnsville, Minnesota	International flights Complex itineraries	50 airlines	Booking engine Trip builder
GTT	Established: 1984 HQ: Plano, Texas Offices: 36 across the U.S.	International flights Hotels	70+ airlines	GTT booking portal
Downtown Travel	Established: 1988 HQ: New York, New York Offices: 4 across the U.S.	International flights Package tours	125 airlines	TheBestAgent.pro Booking engine
Sky Bird	Established: 1976 HQ: Detroit, Michigan Offices: 11 across the U.S., Canada, Philippines, and India	Flights to/from Asia Package tours River cruises	90+ airlines 1.5M hotels	WINGS booking engine

Mondee

Aimed at: leisure travel, business travel

This is the biggest airline consolidator in North America, which acquired 14 travel businesses, including six other consolidators, operating in different regions all over the globe:

SkyLink (India)
C&H International (Asia)
TransamTravel (South America, South Pacific)
HariWorld (Middle East, South-East Asia)
CTS Fares (North America)
Leto Travel (Canada)

Thanks to quite an active position, the company has established relationships with more than 500 carriers. Despite the fact that there are also connections with more than 100 hotel aggregators, covering about 900,000 property units, the rental business accounts for just 10% of the company’s revenue.

One more strong point of Mondee is its software solutions. Currently, the portfolio of the company consists of four tools:

1 TripPro

TripPro is aimed at independent travel agents and travel agencies (сс). The tool allows searching, booking, as well as buying and selling both business and recreational tours. The user interface is adjustable to the agent’s needs. The feature set contains automated ticketing, reports and notifications, as well as a highly sophisticated dynamic pricing option.

2 Rocketrip

Rocketrip is a suite for Enterprise-sized companies. This software takes advantage of their size and enormous resources, saving 20%—30% of corporate travel costs. Such significant savings become available thanks to reward-based encouraging employees to choose the most beneficial trips.

3 TripPlanet

For small- and medium-sized businesses, Mondee offers TripPlanet — a tool for organizing corporate trips on a small scale. According to Mondee, here you can find the exact profitable offers found in Rocketrip for larger clients. The service is paid monthly, but registration is available for invited users only.

4 Unpub

Unpub is the newest software service by Mondee, launched in 2021. This is the solution for end users, who can privately access a significant part of the services previously available for corporate clients.

Picasso Travel

Aimed at: transatlantic flights, long-haul flights, and package tours

This consolidator has worked for more than 40 years, specializing primarily in long-haul routes, especially transatlantic ones. The second company focus is on package tour distribution.

Picasso Travel earned a reputation as a reliable service provider and one of the leaders within the North American market. Thanks to a strategic partnership with AERTiCKET — the strongest European market player in Berlin — they expand their business presence beyond America.

Like the other airline consolidators, Picasso Travel also offers a particular set of online tools. Among them is a personal account and dashboard named Cockpit. Integrated with a proprietary booking engine, the personal account provides access to a string of the main GDS systems.

Centrav

Aimed at: international flights and complex itineraries

Centrav has been in business since 1988. The company was among the first consolidators that offered their clients the ability to book net fares online. In the early 2000s, the company launched its own branded booking engine. In 2011, they released their first mobile website for travel agents, providing them access to 700 airlines and advantageous offers. A tool named Trip Builder helps customers to create and manage complex itineraries from across the globe.

A ‘2020 and ‘2021 Travvy Award winner, Centrav was recognized as the best air consolidator. Their partnering airlines offer flights from North America to almost everywhere: Latin America, Europe, South Pacific, Africa, the Middle East, Asia, and India. The consolidator agrees with partnering carriers on the number of seats to be sold as an alternative to buying them in bulk. This scenario is only applicable to international flights, which is similar to the majority of wholesalers.

GTT Global

Aimed at: international flights, hotels

Gateway Travel & Tours (GTT) Global is recognized as one of the nationwide most effective aviation consolidation companies. With 40 offices across the country, it assists tour companies with finding the best prices on a variety of routes, creating complex itineraries, and fixing scheduling changes. The company has proven most useful during emergencies since its call centers are open outside regular office hours.

Customer service is provided in English, Chinese, and Vietnamese. The choice of languages indicates the consolidation company is mainly focused on the South East Asian and China routes. Travel agencies are available via their flight booking portal to negotiate domestic and international flights with over 70 carriers, as well as book hotels.

Downtown Travel

Aimed at: international flights and package tours

Downtown Travel, founded more than 30 years ago in New York City, retains partnerships with 125 airlines flying to and from Europe, Asia, Africa, the Middle East, and India.

The consolidator offers the opportunity for travel agencies to book bargain rates through its B2B OTA-like platform called TheBestAgent.pro. It even has a unit dedicated to leisure travel. Holidays With Downtown offers luxurious festivals and religious, cultural, and other thematic travel packages to more than 75 countries.

Sky Bird Travel & Tours

Aimed at: flights to/from Asia, package tours, and river cruises

Skybird Travel & Tours is one of the oldest and most highly-recommended global aviation conglomerates. Starting in 1976 in Detroit as a tiny travel company, it has 11 offices across the United States, with sister branches in Canada, India, and the Philippines.

The company ensures smooth operations with its WINGS Booking Engine. It is connected with all the leading GDS, features comparing published and private fare prices side-by-side, as well as automatic ticketing, allowing travel agents to cancel or modify directions easily. In addition to flights, WINGS allows you to book hotels and cars, as well as purchase insurance. Consolidator clients also benefit from the company’s separate Sky Vacations unit, which arranges solo and small-group tours as well as river cruises.

Skybird Travel & Tours recently started offering more flexible payment options with a “Pay Now, Book Later” feature.

Along with the B2B sector, the company also serves end customers. Its Student Fare branch provides cheap plane tickets to students, while Nova Travel specializes in affordable trips for everyone.

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How to assess consolidators’ reliability

Retaining both the airlines’ and the travel agencies’ confidence affects heavily on the financial success of airline consolidators. Let’s decompose this confidence into parts and analyze them.

Years on the market

Once the consolidators market is mature and well-developed, it’s obvious that the oldest companies are the most reliable, thanks to their higher expertise and better-established relationships with carriers and agencies. Typically, established consolidators have been serving as intermediaries between carriers and travel agencies for decades.

Accreditations

Memberships in industry-wide associations are also a sign of credibility. During the decades of regulation, these associations became pushing powers that led their members to follow trusted industrial standards. And certificates issued by these institutions act as proof of trust. Below are the most trusted and famous industry-wide associations:

The International Air Transport Association (IATA) registration acts to demonstrate industry standards’ compliance and ability to issue tickets within the industrial rules. The association is a mediator of commercial relationships among the certified market players.
The U.S. branch of the IATA is called the International Airlines Travel Agent Network (IATAN). The IATAN certification can be obtained by U.S. companies older than two years. It serves as a stamp of professionalization for travel companies.
Established and still owned by American Airlines, Alaska Airlines, Delta, Southwest Airlines, and United Airlines, the Airline Reporting Corporation (ARC) is quite close to IATAN in terms of its functions. The corporation also allows US airline consolidators and travel agencies to issue airline tickets. There is no obligation to the certification in both IATAN and ARC simultaneously, but companies often do it voluntarily.
The primary purpose of the United States Tour Operators Association (USTOA) is to make the travel industry as integer and trustful as it is possible. One of the conditions for USTOA membership is keeping $1 million reserved as a bail fund to cover possible customer issues.
The most famous artifact of the American Society of Travel Advisors (ASTA) is its Code of Ethics which must adhere to by each accredited society member. This set of rules, among other things, prohibits its members from providing inaccurate information to their clients, obliges responding to any issues promptly, protects personal data, etc.

Air Consolidator Accreditations

Well-established and mature relationships with airlines and agencies

Each reliable consolidator usually has steady partnerships with at least two main GDSs — Apollo, Amadeus, Galileo, Sabre, or Worldspan). The number of carriers covered is usually far higher. But not always: some consolidators are focused on specific destinations, where there can be not so many airlines.

Technologies on hand

Larger consolidators typically offer their proprietary booking engines for better operation with GDSs. The list of typical features that are today a must for a trusted business includes building complex flights, Passenger Name Records (PNR) generation, and ticketing automation. Based on the focus of a consolidator, the feature set can also include hotel booking, car rents, package tours, cruises, and other close services.

Real offices and customer service

You should become suspicious if you spend a fully-online consolidator. Reliable companies started in the pre-internet era must have physical offices that customers can visit or phone into. Global conglomerates also ensure around-the-clock multi-language customer service.

Complex Online Booking Upgrade for Flagship European Airline

Discover how GP Solutions helped to increase sales volume and customer loyalty by providing development of a brand-new cross-selling module to one of the best-known European airlines.

A future of airline ticket consolidators

Airlines frequently behave as though they no longer want the assistance of travel agents, cutting agents’ commissions and trying to use their websites as the main sources of lead generation. But the reality is still harsh for them, forcing carriers to rely on third-party companies more than they want to. As a result, they support a reputation of independence using the hidden aid of consolidators, however, in lower amounts than before.

Although the situation looks stagnating at best for the consolidation business niche, the market players show some signs of adaption to the new reality. Below are four trends that will influence the industry the most.

1 Switching the focus to passengers

Increased competition and rising issues within the B2B sector force airline consolidators to switch their focus to serving end passengers. This is a kind of vertical integration for the business helping to increase revenues and get an additional sales channel.

2 Becoming a “Swiss Army Knife” for travel agencies

Providing additional services for their existing clients seems like another smart way to increase revenue. It’s time for the consolidators to sell not only tickets but also corresponding travel services like car rentals, hotels, package trips, etc.

3 Offering a more customer-faced service

At the dawn of the market, consolidators offered minimal or no customer service. Now, credible companies show an eagerness to assist customers around the clock – through a call center, travel platform, or chatbot.

The next story is quite illustrative here. The flagship European carrier sought assistance in rebuilding its outdated booking system. The GP Solutions team has implemented this crucial update, and we have a story about that.

4 Expanding into online

Growth limitations become the main motivation for such a conservative market, like consolidators to go online. Large wholesalers invest heavily in new tech, developing their own intelligent reservation engines and CRM tools.

Consolidators primarily dependent on brick-and-mortar offices and phone-based help are destined for extinction — as is Thomas Cook. The very first and, at the time, biggest global tour operator suddenly finished its history after 187 years on the market in 2019. Along with Brexit, the number one reason for this crash was the refusal to go online and adapt to a digital world.

Alex

Senior Travel Tech Advisor at GP Solutions

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