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For the past few months, I've been checking online rates and comparing them to the rates of one travel agent.

Of course, there are some travel agents who charge much higher than when you'll just book the flights yourself, but there's this one case where they always seem to offer a slightly cheaper flight.

How is this possible? Do they have some kind of partnership with the airlines?

How do they make profit when they always offer cheaper flights?

  • 1
    Although your question is distinct the answers here: travel.stackexchange.com/questions/31409/… and here: travel.stackexchange.com/questions/7943/… touch on the subject. In general it's about receiving discounts, buying in bulk in advance, and various other tricks. I know we have some people on here with direct experience so I'll leave it for them to provide a concrete answer. – SpaceDog Aug 26 '14 at 2:55
  • Do you mean an online site or do you mean "the travel agent on the corner" ? – Fattie Aug 26 '14 at 10:30
  • @JoeBlow, I meant "the travel agent on the corner". ;) – Mark Gabriel Aug 26 '14 at 14:40
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Having consulted for a few travel agencies, here is some insight:

  1. The bigger the agency, the more discounts they get on tickets. This means that the more the agency is popular, the more the airlines are willing to give them a rate because they sell out their allocation.

  2. Some agencies reserve (block) slots in advance which gives them a discounted price. This is usually done during the busy summer travel season. Then it is upon the agency to sell of their allocation. Note that if they don't sell off their allocation, they are stuck with the seats - they can't be used on other dates (the block is for a date range).

Agents partner with travel networks (Galileo, Sabre, etc.) to which airlines feed their availability.

Agents then have partnerships with particular airlines to be able to issue tickets on their behalf. Agents can have partnerships with multiple airlines and cruise/hotel networks.

If you are looking for a cheap fare, here is what you need to watch out for:

  1. Timing (how quickly do you want to fly).
  2. Route (a city pair will have multiple flights).
  3. Season (during travel seasons, seats fill up quick so prices shoot up).
  4. The agent. In this respect, the cheapest option is the airline direct (either through their website, or their own offices), then you can look at online travel aggregator websites like Expedia and Travelocity, and then finally a travel agent.
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    +1 for the beginning of the answer but most of it seems irrelevant to the question at hand. Incidentally, the “travel networks” in question are called “Global distribution systems” or GDS. – Relaxed Aug 26 '14 at 8:15
  • Yes I know, but I didn't want to turn this into too technical thing. Most travelers won't know what GDS is. The second half was in case the OP also wanted to know about fares in general. – Burhan Khalid Aug 26 '14 at 8:17
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    Yes, but that would be an occasion to learn. If you want to get into the details, proper terminology seems best. If you want to keep things non-technical, there is no reason to bother people with GDS. Either way, why mention them without actually explaining how they work and which fares can or cannot be found there? Furthermore, “fares in general” is awfully broad and not what this question is about. It's your answer obviously but I still think that editing out the last three paragraphs would make it better. – Relaxed Aug 26 '14 at 8:26
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Some travel agents have negotiated fares with airlines, which means that they get specific prices at which they sell the tickets, these prices can be much lower than the prices online. As for your questions as to how flight agents make profit - there are two common ways. Firstly the airline gives flight agents commission on the tickets you sell, which is usually very low (0.1%) if anything at all, however some airlines do give more (5%). These percentages are calculated on the base fare of the ticket, thus excluding the vat. The other way that flight agent make profit is they add an amount of money on to the negotiated fare from the airline, which is then the commission they make on the sale. Usually flight agents will check online to see what flight prices are and adjust their commission accordingly, so that they are not more expensive than online prices.

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