Have you Heard of cFares?

25 Comments

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.

25 Comments

HS

I agree with BJO. No rebate arrived, and I only heard from customer service after contacting the Better Business Bureau. They told me that to get the $30 rebate I deserved they wanted to charge me another $49! What kind of deal is a $1 promotion that to use it costs another $49 and then you don’t get the rebates they promised anyway?

BJO

DO NOT USE CFARES***
The prices sound good, but they don’t actually give the discount to your credit card. Essentially, when you open up their window, every search is in a new window and you have to provide confirmation or reservation numbers from the actual website that you are bying the tickets from. Not to sound confusing, but not all 3rd-party sites provide reservation numbers and c-fares wil not connect the dots, further, no phone cusotmer care and no resposne to email, CUSTOMER SERVICE IS NON-EXISTENT*** BUYER ABSOLUTELY BEWARE!!!

JG

Thought Cfares was a decent idea, but they turned out to be a third-rate ticket consolidator. Their site posted a “non-stop” that indeed had a layover, and their response was all too typical: “not my problem”.
I would suggest Kayak, Expedia, CheapTickets, etc. over these guys.

Mario

When will you start accepting international credit cards?, because your site only supports USA issued ones. Travelling is global phenomenum, isn’t it?

Vajid Jafri

As the CEO of cFares and someone with more than 20 years in the travel space working with airlines as an owner of several travel companies, and having negotiated and implemented consolidator contracts, I would like to set the record straight on wholesale/consolidator fares.

I respect that Stuart, as the ex-CMO of Expedia, has substantial knowledge of the airline industry. However, I have to respectfully disagree with his conclusions about wholesale/consolidator airfares. Stuart – I would be happy to speak with you directly to understand why we have such divergent views.

Consolidator contracts are mostly paper-based contracts that are negotiated between the consolidator and the airline company at the beginning of the year. In exchange for committing to a large block of inventory purchase, the airline company gives a deeply discounted price to the consolidator. Only the consolidator is allowed to issue tickets under that contract.

Typically a consolidator will support only one or two carriers on a route so they can deliver on their volume commitments. In other words, consolidators are like specialists who support certain airlines on specific routes. For that reason, consolidators do not service the general public as their offering is limited; in fact outside the travel industry very few, if any individuals even know who these wholesalers are.

The wholesale model is vastly different than the travel agency model, where the travel agent has to give unbiased information to the consumer and does not support one supplier over the other, which is precisely what the wholesaler does. Small travel agencies will buy from wholesalers and then markup the tickets before selling them to their customers. These transactions with the wholesaler are usually done over the phone.

The reason OTAs cannot be wholesalers is that they are expected to provide unbiased information on the whole market — not just their preferred carrier. Also, except for a small number of US carriers that can file some of the wholesale fares in the GDS, the bulk of the market is still off GDS and dreadfully paper-based.

Even the airlines that file some of their wholesale fares in the GDS still issue net fares contracts that are paper-based as the GDSs are incapable of handling all the 150+ variables that exist in a net fare contract. Also, since the tickets have to be issued by the wholesaler/consolidator, the OTAs would rather die before turning their client to one of the unknown wholesalers for ticketing.

I hope this information has helped clarify the facts about consolidator airfares.

john

Yes, Stuart above is correct in his evaluation of the post above his.

And to correct the post prior to that from Astrid (and to make it ABSOLUTELY CLEAR to anyone else who happens to read all the comments above):
cFare DOES MARK IT’S FARES UP !!!!!!!!!
and, that’s not saying anything bad about cFares! just don’t get mislead into believing that in exchange for paying your $50 fee to enter their “select club” you get something at cost. In fact, like i mentioned above, cFares is making a substantial profit off the markup.

Stuart MacDonald

aho, your comment above is patently untrue.

Yes, the big third party travel resellers do pull from GDSs, but not only from GDSs, and regardless it is child’s play to file consolidator fares in a GDSs and search those if that’s what you want to do. The third party guys are pulling fares from countless sources and applying smart math to mark them up and display them on the fly.

Not to mention that they typically represent such enormous volume to any international carrier from whatever gateway they are dealing with (e.g. ExpediOrbiLocity in the US are very important to, say, Air Canada because they can’t get that reach on their own, as would be the case for, say, United on the .co.uk versions of the same sites) that they can get great “consolidaotr” pricing.

Before you make a statement like that above, get your facts right.

  • Stuart (fmr Expedia.com CMO)
aho

Am a loyal cFares custome who has cumulatively saved hundreds of dollars using the site. Admittedly, the site still needs some work, but its new and what new site doesn’t need improvement! But I’m happy to tolerate its weirdnesses for the savings.

As someone familiar with the travel industry, wholesaler airfares are not usually offered by the large on-line travel agencies – for a number of reasons, including the fact that this inventory is not tied to availability data in real-time, which is in the GDS (and fyi, is the system that Orbitz, Travelocity, and Expedia are plugged into, NOT the wholesaler systems). You need two “screens” – one GDS, one local to the wholesaler, to do this. It would take some significant technical wizardzy to match wholesale inventory with real-time availability information across the whole spectrum of wholesalers.

If cFares has centralized these fares into a single presentation offered directly to consumers with real availability, then that is a big plus to consumers as those fares can save them hundred of dollars over typical fares on other sites.

Astrid Leftwich

I am a now an avid cFares user. They don’t need to give me any more for free. Who cares about the minor $50 fee when you travel even more than a few times each year? I’d much rather pay a fee and be able to trust that the fares are not being marked up. It is very useful to be able to browse through all the fares available in one place and know that these are the best prices. If I don’t like the times, itinerary or airlines at the rock bottom prices, I simply click on the button to list more choices, and I control how much I spend for added convenience. I have complete control and complete choice. And of course, I still earn my frequent flyer points with whichever airline I choose to fly!

At first, I checked many other sites as well. Now, I don’t bother. cFares is a huge time saver!

sameer

yes Andrew, I think farecast is the service that’s redefining the way people might shop for airline tickets, not cFares (just my opinion though).

Farecast just recently expanded to most US cities (they only had Boston and Seattle at first). I don’t see myself using any other service at all anymore.

pwb

I just looked up three flights, SFO-NYC and SFO-CHI for Sep 15-18 and SFO-LON 9/26-10/3 and cFares was at least 10% cheaper than Orbitz. And I even had to do several Orbitz searches to pin down the low fare that cFares was quoting.

What’s wrong with that?

Nick Hawkins

Ok. I spent 20 minutes jackin’ around with this site and seeing what cfares offers me that I don’t already do.

For example, I pulled Nov 26-Dec 4 out of my ass from ORD-PVG. ITN’s booking engine says $914 on Asiana. Cfares says $905. Same itinerary. Expedia says $919 (with their $5 booking fee).

I fly around 125k miles a year. I don’t like using fare consolidators or anything along those lines. Generally, it’s not worth it. The prices are generally about the same (within a few bucks) and I’m able to get my assigned seat (which is important) on these flights. And my all-important miles.

I guess this site is ok if you really don’t care about how you get there.

john

and so, could you kindly articulate and share what your knowledge is of those 2 services that cFares, for the first time, “makes available to consumers”?

and then if possible, how those 2 services provide any financial value to the consumer …

john

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!

anjan bacchu

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

pwb

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.

Stuart MacDonald

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
Liz Gannes

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?

Stuart MacDonald

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)
dave

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

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