Are Big Discounts on Business Class Seats Legit?

VIDEO: Matt Gutman discovers extra fees can cost more than airline ticket itself.

"Business Class -- up to 75 percent off!"

Certainly, that offer is tempting to anyone looking to escape from the cramped seating and non-service you get on most long-haul overseas flights. But are those claims just a come-on or are they for real?

A reader who recently came across a claim like that asked:

"I saw a website offering big discounts on business class, but it looks like some kind of coupon travel broker that buys unused frequent flyer miles then somehow sells business class award tickets to customers. I never heard of this agency, and it sounds fishy to me. Is it OK or not?"

The short answer to this reader is, "It's fishy."

The site in question displays the tell-tale sign for a coupon broker: a "we buy miles" notice. But not all agencies that claim big business class discounts are fishy. Instead, probably most of them are outlets for consolidator tickets. If you're interested in cheap business and first class travel -- or even in economy -- you need to know the difference.

Brokers -- Still Around

What, exactly, is a "coupon broker?" Basically, it's an agency that buys and sells frequent flyer travel awards. And, because of market prices and mileage award schedules, almost all of the coupon action is in first or business class on intercontinental trips.

Contrary to some reports I've seen, coupon brokers do not buy and sell frequent flyer credit as miles. Nobody can do that without paying transfer fees that often cost more than the credit is worth. Instead, a coupon broker buys and sells frequent flyer awards in a three-step process:

  • A person interested in selling excess miles contacts a broker, specifies the amount of available credit for sale, and negotiates a price. Typically, sellers receive 1 to 1½ cents a mile, depending on the number of miles involved and the airline. The seller then waits for the broker to make a deal for some or all of the miles available.

  • A person looking for a cheap trip contacts a broker in search of a specific award, the broker gives a price, and they strike a deal. Typically, buyers pay 2 to 3 cents a mile for the credit required for the award.

  • Once a deal is agreed upon, the broker pays the seller and asks the seller to have the requested award issued in the buyer's name. Sometimes, the buyer makes reservations. Sometimes the seller or the broker does. In any event, the buyer travels under his or her own name.

Just about every legitimate travel writer I know warns that traveling on brokered awards is "risky." All major airlines expressly prohibit "sale, barter, or trade" of their frequent flyer awards.

Over the years, airlines have been able to shut down a lot of coupon brokers, apparently using fraud laws. Others have hindered the process by limiting award transfer to family members and possibly requiring that both the mileage holder and the person flying show up at an airport ticket counter together. Despite concerted airline opposition, a few hardy brokers seem to remain in business.

Usually Not a Good Idea

Overall, I recommend against buying a brokered award, for three compelling reasons:

  • Airlines do enforce anti-broker rules, at least some of the time, and if you're caught using a purchased award, the airline can cancel your reservation, void your award, require you to buy a replacement ticket at full fare, confiscate your own frequent flyer miles, or some combination of those.

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