City Pair Fares and GSA Statistics

» Posted by on Apr 26, 2014 in Airlines, Business Practices, Electronic Travel Systems, Global Distribution Systems | 1 comment

There is a statistic cited in the training materials that I find interesting, which is that City Pair air fares save 50 – 70% off unrestricted coach fares. I have seen a similar measure of 72% savings off unrestricted coach fares published directly by GSA. This measure raises two questions:

1)    What data did GSA use to determine this measure and when was the analysis conducted?

2)     Is a better measure of program savings available?

Section 2a discusses yield management tools and how airfare prices change continuously. To accurately measure savings off unrestricted coach fares, GSA would need a database of unrestricted coach fares that were purchased at the same their traveler purchased the ticket to the same destination. A second option would be to obtain some annual average unrestricted coach fare by location, and compare it to the contract fare. In either case, I doubt GSA has gone to that length to measure their program savings.

My second point is in regards to the use of unrestricted coach fares as a comparison. Due to the extremely high cost of totally unrestricted coach fares, these fares are rarely purchased. It is much more sensible to purchase a restricted fare for considerably less money and pay the relatively low (cancellation, etc.) penalty fee. So in essence GSA is comparing savings to an air fare rate that nobody ever purchases. This offers little use as a benchmark, much less a management tool.

By Ted Schuerman

1 Comment

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