It is amazing how Government Travel evolved shortly after the enactment of the Airline Deregulation Act of 1978. Like any other government agencies that is facing reduced budgets, our travel and entertainment dollar consequently garners the most scrutiny among travel procurement tasks. Buyers and airlines have much to assess in determining value with the pros and cons of airline contracting. Other says that airlines would be better off measuring the profitability of client relationship. It’s all about the margins and not the market share. Others say when the airline says profit margin, they should mean contribution. Contribution is just the volume times the profit margin. Wherein the reality is, consumers should weigh whether airline contracts reward clients who create value and drive profits. When it comes to city pair programs, contracted fares are not always the best fares. Sometimes we are on the non contract carrier because the lowest logical fare is not on the preferred carrier, which dilutes the overall city pair program. I’m sympathetic to the fact that having a contract airline and have policy to mandate but on the other hand when you have limited budget and have cheaper option and have to complete your mission, you have no choice but do what is best for your agency. Some agencies will support the use of contract city pair line if it’s $50 or $100 more expensive, but if it’s $300 to $500 more expensive, that’s pretty tough to do. That we have to consider is $6 here and $6 there of ancillary fees, and if you keep adding that up, you see an impact. I can see how other agencies risk the penalties of having a non refundable fare and not use the contract fares due to high city pair cost. They rather use utmost capabilities of their Travel Management Center to manage the usage of tickets that fall under penalty categories. I guess with nation’s economy, we will not see any relief of soaring airlines fares anytime soon.
By: J Borja,
Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency