Reducing the Cost of Federal Air Travel

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» Posted by on Nov 25, 2012 in Airlines, Contracting for Travel Services | 0 comments

The success of GSA’s contract City Pair Program (CPP) is widely acknowledged and well documented.  The CPP has now “expanded … to include 13 carriers in over 5,700 markets.”  GSA estimates that “CPP fares will provide average savings of 68% below full, commercial air fares” and that the program “is projected to provide the Federal Government cost avoidance and potential savings of $6.3 billion in fiscal year 2011.” (1)  While this number is significant on its own, it becomes even more impressive when compared to the $3.4 billion estimated cost for all federal travel in 2006. (2)

In order to keep the program’s fares to a minimum, the government has mandated use of CPP fares through the Federal Travel Regulation (FTR).  While there are certain conditions identified in the FTR that allow a federal traveler to book other than a CPP fare (e.g., contract carrier flight times do not meet mission requirements), the general mandate for CPP travel provides airlines with a level of assurance of the volumes needed to reduce fares to the levels that they do (even though anticipated volumes are not guaranteed).  CPP is a proverbial “win-win” for government and industry.   In spite of this, there are still additional opportunities for savings on federal air travel.

One opportunity that is available today is the increased use of capacity-controlled CPP fares (a.k.a. _CA fares).  According to GSA, increased use of _CA fares “can save billions” since, on average, _CA fares are discounted an “additional 18% below YCA fare(s).” (3)  The primary way of capturing this potential is through increased education of agency travelers so that they understand (and look for) this fare when booking their flights in the E-Gov Travel Service (ETS).  [Note:  The contracted Travel Management Centers (TMCs) will automatically offer _CA fares to travelers.]

Another opportunity is one that will be available in ETS2 (to be awarded in 2012) called Lowest Logical Airfare (LLA).  LLA is defined in the ETS2 Request for Proposal (RFP) as “the airfare associated with the least costly, FTR-compliant … travel option(s), that:

  1. use a regularly scheduled common carrier;
  2. prohibit preference for any airline, type of aircraft, and connecting airports, except as prescribed by the FTR;
  3. may require up to one plane transfer both departing and returning;
  4. depart from the airport nearest to the traveler’s duty station or such alternative airport deemed to be equivalent for such purposes by the customer agency; and
  5. allow for a configurable number of hours leeway, known as the time window, in scheduling that may necessitate the traveler arrive up to half the number of configured time window hours prior to the start of his/her mission schedule requirements and may require up to a similar number of hours wait after the planned business ending time to take advantage of lower airfares.

Through the implementation of LLA logic in ETS2, federal travelers will now have a better view of whether the CPP fare or a lower, restricted, commercial fare may best meet mission requirements.  Before selecting the commercial fare, however, the traveler must assess the risk associated with anticipated changes to her/his itinerary (including cancellation) since financial penalties will apply.  S/he must also document the appropriate FTR exception code for use of a non-CPP fare in her/his travel authorization.

By: John Potocko

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(1) GSA Fact Sheet:  http://www.gsa.gov/graphics/fas/CPPFactSheetFY11_FederalTraveler.pdf

(2) CGTP Training Course, page 44.

(3) GSA presentation, “Governmentwide Programs – Connection the Dots”, SGTP AdCon, February 23, 2011

 

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