The Internet is bringing new order to the wild and wooly world of consolidator airfares.
These are private fares, fares not available in the GDS that are the source of the published airfares that are available to everyone.
Not so with consolidator fares, which have many different names: private, net, non-published fares, negotiated fares, etc. These fares often can be far less than published fares. Such a fare could be any of a number of things—it could be fares corporations negotiate with airlines in return for shifting a sizable amount of their business travel to that airline. It could be a special fare for a meeting or event. It could be a fare available to travel agencies in a certain part of the country or to customers in a certain area.
But locating these fares have long been a time-consuming task. Typically, these fares were sold to the public through travel agencies—whose agents found these fares either by spending hours on the telephone or by pawing through piles of curling, fading faxes in their back rooms. Even after finding such a fare, agents had to hope that they had correctly interpreted the fares, because if they failed to, their agency could be hit by airline debit memos that could easily total hundreds of dollars. At the same time, airline commission cuts and caps made such fares attractive to agencies—because they could mark them up to fatten up their profit margins.
Now, the travel industry has new tools that can help maximize the potential of these fares and make such consolidator or non-published fares fare more common. That is already happening, according to Mike Ferrier, president and CEO of the Airline Tariff Publishing Company (ATPCO), the airline-owned airfare clearing house through which all fares must pass.
Last year (2000) more than half of ATPCO’s fare changes were for non-published fares. That is, more than half of the changes to the database of airfares that ATPCO started out with at the beginning of the year 2000, were for private, non-published fares. And that is thanks to changes made by ATPCO in concert with the airlines over the past few years. The result is a system that allows these private, negotiated fares to be managed far more closely and in a far more orderly fashion than they had been in the past.
The beneficiaries of these advances are the airlines themselves, consolidators, corporations that negotiate their own private airfares and, last, but not least, travel agencies, which now have a choice of mechanisms for finding and selling these fares fast and accurately—and beef up their profit margins in the process. There are a half dozen companies offering these tools; they include two technology companies and all four GDS.
The best of these programs integrate both non-published fares and published fares on the same screen, enabling agents to pick the fare that best fits their clients` schedules and budgets and making it easy to add in an agency mark-up. Development in this arena is rapid. The two technology companies are fare1 and Farelogix. Fare1 is a New York based company that offers agencies a one-stop travel pricing research and booking service for air, car, hotel, tour and cruise and includes consolidator pricing. The site has been up in beta mode since the beginning of December.
Fare1 aggregates information about published and non-published fares and displays both on the same screen, displaying published fares in one color, non-published in another. Agencies can then add in their own mark-ups. Fare1’s service is also available through the GDS. Worldspan is its preferred GDS Vendor but it is in the process of setting up connectivity with all four GDS.
Its consolidator air booking tool is part of a broader menu of services that fare1 offers agencies to help them manage their business more profitably—such as using data mining techniques to help them determine that they have heavy traffic to certain destinations. They can then take that information and negotiate with hoteliers in that destination for blocks for rooms to sell the next year. “These are the things that I call the promise of fare1,” says Ron Andruff, fare1`s CEO.
Farelogix is a Toronto-based company provides both B2B and B2C solutions; that is, its applications will work for traditional agencies and for online travel sites. Essentially, it takes a request for the price and availability of a ticket on a specific route and goes through a database of fare contracts. It is an intelligent booking engine that reads and understands contracts that can be quite complicated, according to Jay Tanner, the company’s CTO.
It takes that information and interacts, for example, with the host system of the airline offering a particular fare, gets the availability that fits exactly with that contract language and then tells the agent if the request qualifies for the fare the system has found. It checks net and published fares, charter fares, fares of airlines like private airlines not on a GDS and connects to all the car and hotel vendors and will match such bookings up with the air itinerary. It has agreements with several major companies, including Sabre, American Express and Jetset Tours and lowestfare.com.
Amadeus is phasing in its consolidator fare booking program. Consolidator Link, introduced in October, is a portal that connects agents using Amadeus` E-business @ Amadeus portal to consolidator Web sites, where agents can make their bookings online. Its second phase, scheduled for second quarter of 2001, will provide consolidator fares and booking through the Amadeus system itself, rather than merely linking up with the consolidator site. A third phase, the launch of which has yet to be scheduled, will offer integrated displays of these private consolidator fares with published fares using a GUI interface at the E-business @ Amadeus portal. Amadeus is working towards migrating all of its customers to this portal. Galileo’s PrivateFare automates the processes for quoting, storing and ticketing non-published airfares and automatically integrates both non-published and published fares.
PrivateFares II improves upon those functionalities for both airlines and travel agencies. Airlines can file their private fares directly through and have them automatically distributed to Galileo agencies on the same schedule as published fare data. It enables an airline to file a non-published or private fare through ATPCO for automatic distribution—just as they file their published fares for automatic distribution. The two private fare products work hand in hand. The airlines can file a non-published fare and agencies can then add in their own markup.
Sabre, which has been able to display non-published fares for the past three or four years as well as to auto price and auto-ticket agency negotiated fares for three or four years, has upgraded its Sabre Snap! Negotiated Pricing functionality. The new feature, introduced in January 2001, allows agencies to mark up and redistribute net fares for auto-pricing and ticketing through Sabre. This feature also enables airlines to file negotiated net fares directly through ATPCO for distribution in the Sabre GDS. Worldspan has two new consolidator fare applications. SecureRate Air Net via ATPCO, released in December 2000, allows Worldspan subscribers to display, update, price, ticket and redistribute non-published fares that airlines have filed through ATPCO.
It integrates these fares with published fares, so that published fares and SecuRate Air Net via ATPCO fares are displayed together on a single screen. Worldspan also offers Web AirFare, a marketing tool introduced in the middle of November 2000 for consolidators to distribute their fares in a more comprehensive way. It is a searching program that sits on Worldspan’s Go! home page. Go! is Worldspan’s Web based platform. Users enter the criteria by which they want to search—origin, destination, date, etc. They hit submit and robots search the Web sites of participating vendors and bring back fares. Another robot goes out to Power Shopper and brings back published fares, so the agents have a comprehensive list of all fares. That search also includes airline dot.com fares as well, and hits the Web sites of Worldspan’s participating consolidators.