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Summary:

In late August, a PR person we know pitched a company called cFares and its “Travel 3.0 vision.” For one reason or another, we didn’t write back right away, and she sent a follow-up note: “[W]e are trying to figure out why cFares isn’t resonating with […]

In late August, a PR person we know pitched a company called cFares and its “Travel 3.0 vision.” For one reason or another, we didn’t write back right away, and she sent a follow-up note: “[W]e are trying to figure out why cFares isn’t resonating with press. They have a great business model, patented technology that’s completely different and online travel is hot.” Maybe it was her request for “the brutal truth,” maybe planning a vacation was on our mind…we arranged a call with the company.

What we found out is cFares actually does have a good angle; it’s not just another travel vertical search engine. The Redwood Shores, California-based company, founded in February of 2005, makes two services available to consumers that, to our knowledge, previously came only via corporate travel agents and inhouse travel departments.

1) cFares gives you access to the 20 percent of airfares, especially international flights, offered at a significant discount by wholesalers.
2) The company will set up a persistent search on a particular flight (international only, for now) and put a 24-hour hold on it if it meets your price.


The first service comes due to cFares CEO Vajid Jafri’s connections built up through 25 years in the travel industry. The second service seems replicable enough, though cFares says it has patented it.

With the 24-hour hold option (called “cAgent”), cFares gives members access to unsold seats that often blip briefly to a lower price in the middle of the night, when prospective buyers are unavailable and unready to purchase. This differs from the Priceline, explains Jafri, because it’s not a “blind buy,” where “only after they charge your credit card do you know you’ve got a midnight flight with three stops.”

The problem with cFares is it follows the Costco model by charging a $50 subscription fee to get access to the wholesaler discounts (cAgent is free, though it requires giving some personal information). This way, the company cozies up to distributors by not taking a chunk of sales like Orbitz and Travelocity do. In our testing, wholesale fares tended to be usually about $30 to $50 below publicly available fares, so this would pay itself back in one or two purchases.

However, with the overwhelming surplus of travel sites out there right now offering zero signup cost, it will be hard to catch people’s eye.

cFares aggregates airlines and discount sites’ listings just like SideStep, Kayak, and Mobissimo, mostly for the purpose of showing that its wholesale fares are a better deal. However, it doesn’t even give that information away for free; to get to the source of a ticket, users have to formally sign up. It also doesn’t help that the company’s site is much uglier and harder to navigate than any of its competitors.

cFares does seem to be doing OK without press mentions. Since going live four months ago, it has signed up 10,000 members, 1,500 of them paying members, attests Jafri. Traffic is apparently growing 40 percent per month. The company has raised $1.5 million from Garage Technology Ventures and is working on a second round.

So, the “brutal truth”? Like price predictor Farecast, cFares doesn’t fit into today’s class of lightweight online travel companies, but that’s a good thing — it has an edge. However, if the company wants to get people’s attention, it needs to give a little more away for free.

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  1. yeah, this strikes me as a feature, not a stand alone site…perhaps they should consider rolling into another well established firm…

  2. Stuart MacDonald Monday, September 11, 2006

    Liz, the auto-hold thing is neat, but beyond that, aggregating consolidator fares is no big news. Most of the big third party sites do it in some manner or other already (although it might not be apparent to the casual observer for several reasons including that they mark them up on-the-fly), and many of them are big enough to be consolidators themselves.

    This is a feature, and one that’s already incorporated into most other big players’ sites to boot.

    • Stuart
      (Fmr CMO Expedia.com)
  3. More importantly, do you get miles with these fares?

  4. Hi Stuart,

    Thanks for commenting, and adding the backstory on these consolidator fares. If you don’t mind speaking up again, I’d love some clarification. cFares seems to aggregate Expedia and its competitors and consistently undercut them with the wholesale prices, so aren’t registered members getting a discount that’s not available elsewhere? If not, where else can I get that discount?

  5. Stuart MacDonald Monday, September 11, 2006

    Well, the pricing of airfares is in many ways a “black art” as much as a science ;-)

    In fairness, I have only done a rudimentary tire kick of cFares, but the only suggestion I have as to why they are undercutting anybody or price is because they are choosing to. Typically, large third-party sites would take whatever “special” fare they have and mark it up on the fly, comparing it to the best of what is available elsewhere at the time and applying rules to set the margin. This can often result in substantial revenue – and, often, a better-than-otherwise-available price for the buyer. They could choose to apply different business rules and make less – as it seems cFares is doing while also attempting to subsidize/make it palatable to the suppliers by charging a fee – but they just don’t. It is highly doubtful that cFares is getting any better deals…they are likely just marking them up less in an effort to build volume, and hoping that they can continue to make money by charging a fee.

    • Stuart
  6. The “agregating consolidator fares” is huge news if they are actually passing the savings on to customers!! Sheesh.

    What is a yawner is the patenting of something patently obvious.

  7. hi there,

    I tried a ticket from portland, or (PDX) to Bangalore, India (BLR) and found a fairly decent fare. Although it did NOT give me the timing information (like, say Orbitz) for the different flights, so far there were no online site that I knew which was INTERNATIONAL.

    I will consider their site next time I’m shopping for an INTL ticket.

    BR,
    ~A

  8. Upon getting an unsolicited email forwarded to me from Guy over at Garage who i guess seeded them and was now trying to provide PR for them, I decided to give cFares a fair shake with a current international airfare need.

    I compared cFares with several other retail “travel search engines” that usually result in “fare jumping” (immediate price increase)that is due to the “availability caching” that they all use. And then once they got your IP address, then the real business model (cash extraction) begins like someone mentioned above. cFares had only slightly lower prices (less than $20-30 on a $1600 retail ticket).

    Being in the travel industry, I also have access to wholesale “net fares” that use the same technology that the retail sites above use, but also have the same limitations and cash extraction strategies.

    I actually spent 8-10 hours on this on a sunday, and the bottomline with cFares is that they have no better fares that any other retail search engine. They undercut by approximately $25 of that $50 annual fee on tickets valued at over $1400, so that you will sign up. But will the average american consumer really use cFares for more than 3 international flights in the same year? (just to effectively save $25) I don’t think so.

    A $1,600 retail fare available to any travel agent, let alone an online “travel search engine” to resell to a customer has approximately $250-350 profit built into it. That means cFares is making at the low end 10 times what it is saving the unlucky person who follows the all the technology hype surrounding this industry.

    My question to cFares is what exact technology value are you providing to retail customers because you are not providing any “travel” value to them whatsoever. I’d really like that question to be answered, then re-asked, and answered again without the spin. If they don’t care to read this comment and reply, maybe you could ask them directly Om and report back here to your readership.

    The air travel industry is one of the most cut throat industries still alive these days. And to think that a slight spin on a “technological advantage” is going to create any ROI for any future investors of cFares, is like thinking southwest airlines is going to start serving dinners on their flights any time soon.

    PS. Actually, just before submitting this comment, I decided to check the US PTO site real quick … Here is the Abstract from cFares May 11, 2006 Patent Application:

    “Legacy transactions, and their costs, meeting specified parameters may be provided through a wide area network to a processing station (e.g. a travel agency). These parameters may be airline flights leaving on a particular day from a specified originating location to a specified destination and specifying established and published fares of primary airlines. Individual transactions (e.g., airline flights and fares) may be provided to a database at the travel agency through the internet from (a) airlines other than the primary airlines in the legacy servers, (b) the primary airlines with discounted fares, (c) consolidators offering wholesale fares and (d) an Orbitz web server. A display screen at the processing station respectively displays the legacy transactions and the other transactions on first and second portions of a display screen. The database selects one of the transactions and provides for the printing of a ticket for the selected transaction at a printer at the travel agency or a printer at the legacy server and for an accounting at the travel agency or the legacy server.”

    OK, so they are finally getting the travel industry’s “legacy servers” into the internet age. hmmmmm, that sounds kinda like 1997-98 to me, Guy!

  9. Travel Trends & News Blog Tuesday, September 12, 2006

    Have you Heard of cFares?…

    cFares is not just another travel
    vertical search engine. It makes two services available to consumers
    that, to our knowledge, previously came only via corporate travel
    agents and inhouse travel dep…

  10. Travel Trends & News Blog Tuesday, September 12, 2006

    Have you Heard of cFares?…

    cFares is not just another travel
    vertical search engine. It makes two services available to consumers
    that, to our knowledge, previously came only via corporate travel
    agents and inhouse travel dep…

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