Written By: Stephanie Knight, Copywriter – Sky Bird Travel & Tours
If you’re unsatisfied with how much (or how little) your current commissions are, you should consider working with an airline consolidator. The great deals they provide on airfare gives travel agents the power to mark up commissions. Imagine being handed a blank check on which to write your desired amount of commissions! If you’re ready to give your business a boost, tune in to this monthly series on airline consolidation throughout 2018.
What is an airline consolidator?
Think of airline consolidators as the bulk food store of the travel industry. Through special relationships with airlines, they are able to buy seats in bulk and resell these tickets to travel agents at a reduced rate. This creates a symbiotic relationship between the airlines and the travel agents. On one hand, the airline is able to spread word of their routes and ticketing options. On the other hand, agents get low airfare. Agents can then pass the savings on to clients while still earning a nice commission for themselves.
A Brief History of Airline Consolidation
Airline consolidation started decades ago as a way for airlines to reach the VFR market (visiting friends and relatives.) However, it is now the only way for professional travel agents to make money on airline tickets.
This system was highly restrictive. However, this is no longer the case. Younger members of the travel industry may be warned against using airline consolidators by their more experienced peers who have memories of dealing with a difficult system. Working with airfare consolidators is much simpler now. In fact, most airline consolidators have the same rules for making purchases as airline websites, except agents get the added bonus of making their own mark ups.
Airline Consolidators Get Agents More Money
When you work with an airline consolidator, you’ll often find fares that are 40-65% lower than published fares. These “clearance” fares can be marked up by the agents to whatever amount they wish while still getting their clients the best deal. For example: the best published fare from New York City to London is listed as $1,300. An airline consolidator may be offering that same route for only $600. A travel agent can mark up the fare to $1,000 which earns them a $400 profit, and it still beats the lowest fare that a client might find on their own.
Airline Consolidators Give Agents More Freedom
Not only do travel agents have the power to choose how much they will mark up their fares, they also have the power to decide when to do so. For instance, maybe a travel agent is approached by a customer who has booked with her for many years. They have a good rapport and the agent wants to thank them for their loyalty. They have the power to set a lower markup for this particular customer as a means of thanking them for their business and ensuring it will continue in the future.
Maybe an agent is dealing with a difficult customer. The agent wants to smooth things over as much as possible, so the customer doesn’t leave bad reviews. The agent has the ability to offer a low enough discount that the customer feels compensated.
Keep Commissions in the Agents’ Pockets
Many agents, especially niche agents, do not have air contracts. This forces the agent to send clients out into the world to find their own air fare. This situation has the potential to create a variety of problems.
First, and perhaps the most obvious problem for travel agents, there is no commission to be made on airfare if you’re not selling it. You may feel like booking airfare is out of your realm of expertise. Maybe you’re a bit intimidated by the idea of booking airfare. An airline consolidator can remedy this.
Another problem that arises from sending clients to find their own airfare: they may not find the best deal. When it comes down to it, most people are not as savvy as travel agents when it comes to trip planning. They may not find the cheapest route, the most direct route, or a highly-rated route. They may be unfamiliar with airport layouts and think a one hour layover is plenty of time to catch that connecting flight, where a travel agent would know it takes one hour just to get through security. The last thing you want is a client making errors that conflict with the tour you’ve already planned for them. When booking a client’s trip, you want them to feel confident they’ve made a good choice, not lost and confused.
Additionally, having to do their own research may leave a bad taste in the client’s mouth. Think about it: they’ve chosen to book their trip through a travel agent because they either don’t have the knowledge to do so on their own, or they don’t have the time. And now the person they’ve entrusted to plan their dream trip is telling them to find their own airfare. It might cause the client to seek out a different travel agent that does sell airfare. Imagine buying a car only to be told you have to buy and install the breaks on your own. It’s a much safer bet to work with an airline consolidator.
The Takeaway
Airline consolidators allow agents to take control of their earnings by giving them the ability to mark up fares when and how they see fit. It avoids the problem of sending clients to look for their own airfare, and therefore more money stays in the pockets of agents. Before you book your next client, put an airline consolidator to work for you!