YOU ARE HERE: LAT HomeCollectionsCurrency

Travel and You

Some Get a Fear of Flying on a Reissued Ticket

January 05, 1986|TONI TAYLOR | Taylor, an authority on the travel industry, lives in Los Angeles

Heavily discounted seats on scheduled airlines are touted in ads and by other means, and there are legitimate bargains. But there are also some possible pitfalls in buying such tickets, some of which may be stolen or originate from questionable sources.

Airline tickets are worth money, of course, and they are a means for persons seeking, legally or otherwise, to transfer large sums of money from currency-controlled countries into hard-currency areas.

These tickets, bought at low prices, are then sold in countries such as the United States to a minority of travel agents/consolidators who then reissue legitimate tickets for other domestic and international travel. In turn, these tickets can then be resold to still other travel agents in a chain ultimately reaching the consumer.

Airlines Are Losers

The big losers in this movement of tickets are the airlines. According to the International Airline Transport Assn., the indirect loss to carriers is about $200 million.

Eventually, when all the ticket coupons show up at the airlines' central clearing houses and are matched up, the carriers used on the original tickets (and MCOs, or miscellaneous charge orders--documents issued by airlines or their agents requesting the issue of a ticket to the person named on the order) wind up paying dollars to other airlines on which travelers used reissued tickets.

And sometimes the airline's money has to stay in the country with a controlled currency.

Occasional Problems

Generally, the traveler buying such a reissued ticket has no problem, although there have been cases of tickets being confiscated (airlines have a tally of blacklisted tickets). It would then be up to the traveler to seek a refund or new ticket from the agency. In either case, the traveler is likely to experience delay and probably embarrassment. Airlines reserve the right to question how you obtained the ticket.

"It's rare that any passengers are actually stopped with such reissued tickets," said an IATA spokesperson. "Only a minority of agents are involved with these kinds of tickets, and other agents are unhappy about the problem."

In the long run, however, airline losses through this kind of ticket scam can obviously affect the level of fares.

Reissued tickets look like any other tickets. For example, they are refundable unless otherwise indicated. To tell if you have a reissued ticket, look at the "Form of Payment" box and the "Issued in Exchange" box. If it's an exchange ticket you'll see a 15-digit number (the first three digits indicate which airline issued the previous ticket, but not where).

Each time the ticket is reissued, the new ticket only bears the number of the previous ticket in the "Issued in Exchange" box, which will only have the original number the first time. After that, it can be a new number and a new airline. The first time the ticket is reissued, in effect, launders the ticket.

You can then try to find out (from airlines and travel agents) which airline is indicated by that three-digit code, and check with that carrier about the origin of the first ticket. It's a complicated procedure, especially as some tickets are reissued several times, which makes it harder for the airlines to track them down.

'Nigerian Connection'

One case in point is what some industry observers call the "Nigerian Connection." Nigeria blocks any large movement of its currency out of the country, with this restriction also applying to airlines serving Lagos, its capital. Such carriers include Pan Am, British Caledonian, Air France, Lufthansa, etc. However, such airlines must sell tickets in Nigeria that are bought in the local currency.

One of the ways this restriction is bypassed is by buying a large number of airline tickets and MCOs, which are issued with names of travelers on them. "Nigeria has laws designed to prohibit illicit purchase of air tickets by citizens or residents, and this is to prevent resale of the tickets outside the country," said a spokesperson for the Nigerian Consulate in New York. "But there are loopholes, and people try to beat the system."

In this vein, such tickets may be improperly issued and validated. One dodge used, according to an industry spokesperson, is bribing travel agents in Lagos to issue tickets without the restriction stamped on them that such tickets are only refundable, endorsable and transferable in Nigeria.

Flooding the Market

Tickets gained in this fashion are then flown out of Nigeria in suitcases, and they have been flooding the market in the United States and Europe. While airlines are reluctant to discuss the problem, one spokesperson estimated that there are about $1 million worth of such tickets in the United States.

Los Angeles Times Articles