Friday, January 14, 2011

How does group airfare work?

Yesterday we received a group inquiry for airfare from Boston to Nuremberg, Germany. This is for a school group of 15 students going for a quick exchange and to see Germany! The group leader requested the best price and I started looking up fares and getting bids from airlines. This morning the group leader calls me back and gives me rates he has found through other agencies and by himself. What he didn't know, was that by doing this, he is bringing up the rate for his requested itinerary.

Here are some tips about group airfare requests and procedures as well as the pros and cons of group airfare verses published airfare:

  • When requesting group airfare, have alternative dates available
  • Do not request airfare with several different agencies, as this will increase you quote (see below)
  • Request group airfare with an agency which has a good connection and high sales volume with the desired airline

Group Airfare advantage:

  • Guaranteed price for all travelers (except taxes & fuel)
  • One Free seat (taxes need to be paid) for large groups (30+), depending on the airline
  • Low deposit required, final payment due generally 3 months before departure
  • Name changes are possible until ticketing (3 months before departure)
  • Group check in at the airport (most airlines)
  • Group seat assignment

Individual airfare advantage vs group airfare:

  • Individual ticket price generally lower than group price
  • More flexibility for departure and return flights as well as deviations

Here is the correspondence I had with a client about this:

Dear XXX:

We have great contacts to several airlines. However, I noticed that you or a different agency already inquired for the same dates with some of the airlines. The airlines do not ‘double quote’ airfare for several different agencies.

While I do understand that you like to get bids from different airlines, it is really just getting you higher quotes when having several agencies compete. The more group space is requested, the higher the fare will go, as the airline assumes that there is higher demand.

I am waiting to hear back from a different airline, but I assume that their rates might be around the same.
As mentioned on the phone and in my email, it will be less expensive to purchase contracted airfare. However, this would require full payment at time of booking, which you mentioned is a hardship for the group at this point.

The reason group airfare is generally more expensive is that airlines do not want to sell out their flights and loose the flexibility in terms of yield management. Once they sold out, they can’t change the price (and with that their profit) anymore. Plus they are going back to historical data and see how booked these particular flights were in the past. Group rates come in generally a bit higher, to ensure that the airline does not lose money on that flight, even though there might be a special on the market at the time of inquiry which is cheaper.

Hope this gives you a bit more understanding on how things are working.

Bottom line - if you are looking for the cheapest, most flexible airfare for your group, individual ticketing makes sense, especially as our contracted airfares are lower than the published airfare you will find online.

Please email us at for a group quote and to discuss the best possible way to get your group from A to B.

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