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Attention, Airline Ticket Shoppers ...

July 7, 1995

When it comes to taking business trips, David Seeherman is a cheapskate. So when the airlines made it harder to buy the cheapest seats, he stopped buying retail. Instead, he turned to ``consolidators,″ the outlet stores of the airline industry. His most recent coup: Two round-trip tickets from JFK to Milan at $700 each. Buying from the airlines at the last minute would have cost him $1,400 apiece.

``A lot of times it just doesn’t pay to fly the airline directly,″ says Mr. Seeherman, 32 years old and president of Cejon Accessories Inc., a wholesaler in New York City.

Once only students and freelance photographers on shoestring budgets bought consolidator tickets. Now everybody’s using them. Fans of the bargain-basement prices range from owners of small businesses, like Mr. Seeherman, to venture capitalists with business in North Africa, to couples honeymooning in Europe, to Korean-Americans visiting family in Seoul. All are lured by international air tickets at 5 percent to 50 percent less than the standard rates, with the average discount at about 20 percent.

It’s hard to track the increase in consolidator sales exactly, but to hear travel industry insiders tell it, the surge is of epic proportions _ 30 percent to 50 percent over last year. And experts say these seats are particularly popular this summer, with cheap air fares so hard to get and the weak dollar creating an influx of bargain-seeking foreigners. Agents are pushing consolidator tickets too, because the airlines have capped commissions on standard tickets.

Indeed, travel agents who never dealt in these tickets before say they now book 10 percent to 20 percent of their international travel through consolidators. Managers of corporate travel departments say they now regularly price-shop and purchase through consolidators if the discount is more than 20 percent. ``These days we’re surprised when we buy an international ticket from the airlines,″ says Peggy McCumber, who works in the travel department of American Family Insurance, of Madison, Wis.

Here’s how consolidators work. Consolidator companies have contracts with the airlines to buy tickets in volume at very deep discounts. These seats are essentially leftover stock _ what the airlines can’t sell at retail prices. Like most discount merchandise, consolidator tickets come as is: no cancellations, no last-minute changes.

Consolidators have long suffered from a sleazy reputation, mostly because they resell their seats to a network of travel agents and other entrepreneurial types. From there, tickets can trickle down from legitimate to unscrupulous dealers.

``You’ll find guys dealing in consolidator tickets that are barbers, walking around with ticket stock stuffed in their pockets,″ says Steve Danishek, of TMA Inc., a travel agency in Seattle.

For this reason, travel industry insiders recommend buying consolidator tickets from a reputable travel agent _ not by answering the tiny ads in Sunday newspaper travel sections. In fact, the top-tier consolidators, such as Jetset Tours in Los Angeles and Travac in New York City, hardly advertise at all.

Airline executives don’t like to discuss their agreements with consolidators because they don’t like to admit that they undercut their own advertised ``lowest″ prices. They will say, however, that consolidators are a necessary evil, the only way to unload empty seats.

``I can tell you that there seem to be more consolidators than there were five years ago,″ says Howard Goldberg, director of passenger sales for the Americas at Qantas Airways. ``And I don’t know of many airlines that don’t use them.″

The huge volume of tickets trickling down to illegitimate dealers explains why business travelers have shied away from consolidators. But Lois Eida, a Manhattan travel agent, insists that looks can be deceiving. She buys 60 percent of her international tickets through consolidators; half of those, she estimates, are for business trips. Ms. Eida price shops for consolidator tickets at tiny, cramped offices on Canal Street and the Lower East Side of New York.

``I go to these cockamamie places,″ says Ms. Eida. ``But they’re good. They’re really good.″

Diane Berlin, a travel agent from Redwood City, Calif., is somewhat less enthusiastic about consolidators and won’t promote them. ``It’s too difficult,″ she says, given that holders of these tickets sometimes don’t get seat assignments or frequent-flier miles. Indeed, just 10 percent of consolidator tickets come with frequent-flier miles, estimates Gary Schmidt, of Travel Publishing Inc., in St. Paul, Minn. Seventy-five percent come with seat assignments, however.

But some corporate travel managers say consolidator tickets actually give their travelers flexibility by allowing them to book at the last minute without having to pay hefty full-coach fares. Dana Pair, travel manager at Bernstein-Rein Advertising Inc., in Kansas City, Mo., recently sent a Swedish employee back to Stockholm in an emergency for $250 one way, when the airlines were citing prices of $700.

Mr. Seeherman, for one, denies any major inconvenience associated with the discount tickets. ``It’s just like a regular ticket,″ he says. ``Except it costs less money.″

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