How can budget OTAs offer prices that are 25% of what the airline charges?

Upvote:3

It's showing as $1905 for me now.

I run an OTA (Beat That Flight) and play with dates/prices a lot. Sometimes you get error fares where an OTA or provider genuinely has the wrong price (They've often forgotten fuel costs or tax or conversions). There are whole sites dedicated to finding these as they tend to not last long.

In that case, it was either an error fare, or a timing issue. Often you have to click through to the actual sales page and it'll say 'oops, that price has expired, it's now X'.

Interestingly, Beat That Flight is showing me $2141 for that route (USD) with Lufthansa. Every route varies!

For your other parts, my data provider also takes a cut. Somewhere along the line, either someone is taking a loss, maybe to get themselves out there, or to promote a deal (Eg $1 seats, but only 2-3 of them on a flight). In Australia, for example, my site almost always has 1-5 dollars off Jetstar flights, and always used to show cheaper prices than TigerAir, finding them on other providers. It's an insanely complex industry, price wise. From this page:

"Each day an airline is constantly making changes to their fares and rules. There are millions of fare and rule changes made each day. Approximately 90% of worldwide commercial airfare is distributed through a clearinghouse in Washington, D.C. called ATPCO (Airline Tariff Publishing Company). ATPCO is owned by over 20 airlines and holds and distributes (to a select few subscribers) airfares for over 500 airlines worldwide. "Airlines participate in ATPCO to have a common format and distribution point for their airfares. οƒ˜Tickets are sold for a given airline through a variety of distribution channels including airline websites and call centers, travel agencies (leisure/business/online/offline), packaging and tour operators, airline partners, affinity group agencies (students, missionaries, alliances),and consolidators. Tickets for a given airline may be sold by thousands of different travel companies worldwide. Millions of fare and rule changes are made each day. Hundreds of thousands of fare price and rule changes flow continuously into ATPCO each day.In turn,fares are distributed at specified times later the same day to a handful of subscribers worldwide that then provide the data to reservation systems,including the airlines themselves. Once distributed, each vendor updates databases at different intervals:2-4 hours for domestic fares, and 4-8 hours for international fares.The domestic 8 PM airfare feed is not loaded until after midnight on reservation systems. This explains why fares may vary by website and are not always consistent across the board."

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