#Flight #travel #agency
Flight travel agency
How do travel agencies sell cheaper flights than an airline?
Sorry if this is a dumb question or if it has been asked before (I couldn’t find anything using the search function).
Do travel agents/agencies have some sort of “contract” with airlines? I’m just wondering how a travel agency is able to provide flights at a cheaper price than the airline itself. How do they make any money or stay in business if that’s the case?
Mind you, I always book direct with the airline because I find that they usually are the cheapest option (the few times I’ve considered using a travel agent they couldn’t provide me with a better deal). but I have friends who book solely through travel agents and are convinced that this is always the best price for flights.
They **sometimes** can by combining flights from multiple airlines on a ticket. If airlines have interline agreements with each other (including fierce rivals) you can get multi-carrier or interline tickets that airlines won’t sell on their own websites, or they can’t match multi-carrier fares with their own code shares.
But remember that those interline tickets/fares can, and should, be booked through a reputable full service travel agent. They are not only available from online bookers and with a few exceptions online third parties should be avoided.
A number of travel agencies search for the lowest fare and that is the one they advertise. That’s why they usually state something like JFK/CDG FROM $500.00. It’s the FROM that gets you. That fare is usually available someplace, but normally not on a viable itinerary. It might involve odd flight times, numerous or very long layovers, etc..
The advertised fares are not live fares and when you book the flights you prefer, they usually come back with a fare that is equal to or higher than what you would get if you booked directly with the airline.
Are you sure it’s cheaper? Often they show outdated pricing, you need to be careful.
I think also, looking at a couple of the very small specialist agencies on the Maldives forum that sometimes they manipulate pricing ie how it’s displayed to the customer, to make it look like flight is cheaper and just build the buffer into the other costs.
Some of the big ones, like Expedia, can sometimes offer it cheaper, maybe through an agreement with the airline, I’m not sure, but that’s few and far between,
As with most industries, there are brokers and wholesalers who buy bulk from airlines and sell to travel agents, they then can sell at cheaper prices. They can also make own judgments to make less profit by selling tickets even cheaper than competitions. The very basic of free enterprise competition.
No different than why exact same products are cheaper in some stores or much cheaper online.
Thanks everyone for the responses. I know that most third party websites frequently advertise out of date prices. My question was specifically about travel agencies (i.e., Flight Centre, etc.).
I have a friend who travels to Serbia a lot and says he always books with a travel agent because they have a contract with the Serbian airlines and are therefore able to provide him with a better price. In regards to this, what kind of contract could a travel agency have with an airline to allow them to sell cheaper flights? The only way I could see this working is if an airline sold the agency their flights in bulk for a reduced price, and the agency in turn sold the flights for a “reduced” price to the customer. But what part doesn’t make sense to me is WHY an airline would want to do this when they could just make a higher profit selling directly to their customers. Again, this is me just speculating – I was doubting whether agencies even do have contracts with the airlines, so I could be way off.
MacJourney, we were typing at the same time 🙂
So it’s not that an airline has a bonafide “contract” with an agency, but rather that an agency will purchase flights in bulk and then decide what price to sell them for?
For example, Flight Centre could buy 10 tickets from Air Canada for $1,000 each. They may then choose to sell 8/10 of these tickets at $1,200 each, and then be able to provide a “deal” to a customer by selling two tickets at $800 each. Is that about right?
You could be right. But wholesalers are not travel agents, they don’t deal with the public at all. They don’t buy 10, they buy 100 times more, they then wholesale tickets to travel agencies. Agents call wholesalers when they want to buy and sell that ticket.
Wholesalers also sell packaged tours, same with cruises.
I’m not sure about that macjourney, that’s what used to happen,
Flight centre will purchase via the GDS, I doubt they are buying from a consolidator. I would guess the ops friend is simply mistaken that it’s cheaper or not comparing apples with apples.
Makes sense, thank you! I was just trying to simplify it with my example 🙂
So, it is of course possible to find a cheaper ticket through a travel agent, but it’s not because the agency has some special relationship with the airline. Rather, they purchased the tickets from a wholesaler and are now making their own decisions on what price to sell the ticket for. Sometimes it’s more than what they purchased it for, and sometimes it’s less, which is when the customer gets a better deal.
USBT’s answer makes sense too, in terms of the sale of interline tickets.
froggy, you may be right. My friend didn’t give me any specific examples of flights he purchased. For all I know, he didn’t compare apples to apples. This actually all started as a conversation about why you should always book direct with the airlines (my stance) and him saying that he “always” books through a third party or an agency and gets a better deal than the airlines could provide.
To be fair, he did acknowledge the risks of booking through a third party and said he was totally willing to accept any issues or loss of money as a result of booking through them (he’s a big fan of Cheapoair lol). To him, it’s worth it to save a couple hundred dollars by booking with a shoddy third party, even though the chances of something going wrong are higher. To me, I’d rather pay a bit more for my peace of mind. He also mentioned that agencies have contracts with airlines, thus allowing them to sell cheaper tickets. This part I can’t get on board with. If this was the case, why would anyone book with airlines?
How do travel agencies sell cheaper flights than an airline? – Air Travel Forum