Airfare codes were designed to help us, but they can be very confusing when we don’t know what they mean.  Don’t worry; I was confused too until I did a little research.

First, let’s look at what an airline fare code is.  Fare codes are a way for airlines to differentiate between class of service, cost of ticket, award ticket, etc.  We will be looking at four airline fare codes used for government travel, but let’s first look at the government’s airfare program.

The airline city pair program is a successful program between the US General Services Administration (GSA) and the airlines.  Yearly, GSA contracts with airlines to get discounts off the price of commercial fares.  This successful program saves the federal government billions of dollars annually.  Rest assured, a city pair fare is based on several factors other than price such as nonstop service, convenient flight times, number of flights offered, shortest total flight times,  and whether jet service is offered.

A city pair fare has a city as the point of origin and another city as the point of destination.  These one way fares offer the government flexibility for their travelers.  Other benefits include

• fully refundable tickets and no charge for cancellations or changes
• availability of last seat
• flexibility of multiple destinations since fares are priced with one way routes
• no advance purchasing required
• no minimum or maximum length of stay requirements
• availability of dual fares
• no blackout periods
• pricing stability due to locked in fares
• volume – over 5,000 city pair fares to choose from

It should also be noted that it is mandatory for government employees to use economy class contract fares unless they qualify for an exception.  Exceptions are found in the Federal Travel Regulations (FTR).

Airline City Pair tickets are issued using one of the following contract award (CA) fare codes:

• YCA
  • city pair fare
  • guaranteed GSA economy class
  • capacity controlled fares
• _CA
  • city pair fare
  • GSA economy class
  • limited capacity
  • first letter of the _CA will vary by airline (e.g. LCA, QCA, etc)
  • seat availability on a particular flight varies carrier-by-carrier and market-by-market
  • ticketing time limits
  • advance purchase requirements
  • minimum or maximum stay requirements
  • travel time limits
  • extended calendar blackouts of more than five consecutive days’ duration
  • can be subject to penalty, change or cancellation fees

These two contract fare codes are also known as Dual Fares.  YCA is a highly discounted unrestricted fare.  The capacity controlled fare (_CA) offers an even deeper discount.  Because the rate is lower, there is a limited number of seats when the _CA fare is offered.  The _CA flights allow an agency to save the most money with the same quality service available with YCA fares.  For this reason, the _CA fares are encouraged by the Federal Travel Regulation.

 City pair contracts for business class service are awarded for many long-distance international markets.  The contract fare code is

• _CB
  • city pair fare
  • business class
  • no administrative fee/penalty for reticketing, rebooking or cancelling – with exception of Group Travel Cancellation Policies and certain fees
  • long-distance international markets

 Some airlines offer “Government Fares” or “Government Discounts”.  These are not contract fares even though they appear to be the same price.  The fare code is

• DG
  • not a government contract city pair fare
  • offered by non contract carriers
  • not offered to the general public
  • also known as “Me Too Fares”
  • may not be used for government travel unless it meets a government exception
  • fare may change between time reservation is made and ticket is issued
  • additional fees may be added that do not apply to contract airfares
  • early ticketing may be charged to traveler’s credit card sooner than with contract airfares

 The DG fares can be used when 

• a city pair fare is not available
• space or a scheduled contract flight is not available in time to accomplish the purpose of your travel
• the contract flight is inconsistent with explicit policies of your agency regarding scheduling travel during normal working hours
• rail is not available, not cost effective or inconsistent with mission requirements

 Since DG fares are offered by non contract carriers and not available to the general public, they do not qualify for the FTR exception which allows government travelers to take advantage of a lower commercial fare offered by non-contract carriers. 

In summary, if you know your flight schedule well in advance and there is little or no chance you will need to change your flight plan, then look for a _CA city pair fare.   Remember these need to be booked early with little chance of changing your schedule.  If you need to leave on travel in a week or less, chances are likely that you will not find a –CA fare and will need to look for a YCA contract fare.  If a YCA or _CA city pair fare is not available, then look for a DG fare.  If you are traveling internationally, search for a –CB fare.

Take pride in being a frugal government traveler who follows the FTR. 

By Dean Cox

“The views expressed are those of the author and do not reflect any position of the Government or my agency.”

First, per diems are issued in early August to be effective October of that year through September of the following year. Since we currently contract January to December, all the hotels are given the opportunity to change their rates for October through December. In most cases, one of two things happens. Either in areas where the per diem went up hotel potentially loses that revenue if they do not amend the rate, or the properties are suspended from the program if they do not amend rates that were bid at the previous years per diem in areas where the per diem went down. As we already make exceptions and concessions for this entire market, why do we not solicit rates based on the government calendar year? It could not be harder for us or the travel agencies than managing and loading for the same program year twice.

Next, we need to address the issue of soliciting all hotels worldwide versus utilizing production and market data to develop a more sensible and manageable program. Understanding that there is some amount of government business everywhere, and acknowledging that hotels base rates on their best business information and potential revenues, the government rates could be solicited much like any other large lodging consumer. Hotels should be made aware of the total government lodging credit card spend for the specified program or government agency (i.e. FedRooms, CW|Sato Government Travel; Navy Elite; Army Lodging) in their city or area based on the two previous years. They should be made aware of any base construction or closings as well as agency headquarter relocations planned within the program year. The government or its representative should commit to authorizing only a certain number of hotels per hundred or per thousand room nights, and only accept that many hotels into the specified program for the year in that location. This will create competition for the revenues between hotel companies and that is when we can examine concessions.

The first concession we could look at is commissions. I understand that the very hard working agents should be paid and paid fairly for their work. I have wonderful relationships with the agency travel managers I work with on the government accounts and do not wish to take anything away from them. However, when the rate offer requirements dictate that the rate must be at or below per diem, must be commissionable at 10%, plus there are participation fees or pay for performance models, it severely reduces the number of hotel and quality of service the lodging industry can provide. When a rate that is already, in many cases, unattractive to the hotel, is then reduced further by fees, they cannot make government business fit into their business needs. Say, for instance, the CONUS rate is $70.

We are now looking at the hotel receiving only $60.67, in effect, as they cannot use the $70 as the actual value from which to pay operating and staffing costs and see a profit. It is my understanding that the airline industry no longer pays commissions on the CPP or other government rates, so maybe we should have discussions with them industry leaders to industry leaders about how that is working for them and how it has affected their relationships with the various government program managers, and of course the bottom line revenues. Hopefully, together, we could find a system that would benefit budgeting for all parties involved; the government as a whole, the lodging industry; and the agencies.

Following commissions, last room availability is a concern. Most hotels have complicated yielding plans that optimize revenues while still being able to offer rates to lower rated business client and the government. Although during some times during the year, the property may be able to offer these more discounted rates readily, the majority of the year, in my experience, the hotels must be very careful with their thresholds. If the government agency and its travel agency want to guarantee that there are always rooms available at their contracted rates, then they should accept the limited hotels per area as discussed, and not only mandate per diem rates, but that the travelers must stay in program hotels. Although when working with the corporate market transient programs we see a high level of leakage, there are programs which are very well mandated and will not pay a traveler back for stays in properties not listed on their program directory. Hoteliers are more willing to offer last room availability when they are aware they are one of a select few getting the business and are aware of how much they can expect to receive.

Once we get these more critical items addressed, we can look at the competitive edge and value added type concessions. Some hotels already include breakfast or other meal functions in the rates for all guests and that allows the traveler more freed up funds for other meals and incidentals. Some hotels which do not have inclusive items for all guests, will include items such as continental breakfast and/or afternoon hors d’oeuvres to their executive level guests and frequency program members. These could be value add items for the government and contracted into the program rates. If you have one hotel who would offer per diem and no concessions and one hotel that would offer a meal or other amenity at the same rate in order to be guaranteed the business, then the government gets a choice as they can then counter-offer or negotiate a lower rate or amenity with the first hotel as many of our corporate customers often do. As developing technologies emerge and thinking outside of the box, unconventional items we could look into as we move forward would be expanding electronic folios to include “government ready” receipts, divided folios, or TDY travel claim voucher style itemized cost savings reports, as well as, some in-house items like laundry/pressing services for our military travelers including military service style uniform and shoe shine care.

Although there are more questions than answers at this part of the game, there is a better way out there. We as the travel industry cannot just require changes on the government’s side of the equation. There are things the hoteliers and the lodging industry need to consider as well before agreeing to this type of arrangement. Some of the other questions I have as challenges to the change but do not have answers to are:

• If a hotel cannot offer the contractual government rates, or a rate at per diem, should they offer a rate at the hotel that is labeled government? I know currently most do.
• Once this more corporatized process is in place, are government travel managers at the agencies still going to audit to see what other federal government rates are available and insist on the same rates or benefits? If rates are offered on a production driven basis, knowing each travel agency manages different departments and agencies within the government with different travel needs, they should not be allowed (at that point) to demand equalization. We don’t offer our corporate clients producing 10000 room nights a year at a property to offer the same rate packages to clients consuming 300.
• Are technologies in place that could manage a October to December program versus a January to December program on both the industry and the government travel agency sides? What would it take to create or update that use? Could they be made compatible to ETS?

We have made a lot of progress in how we work with the government. But I think with all the new technologies we have access to, it is time to look at how to make it better; both more cost effective for the government and more profitable for the hotels.

by Crystal Wright

Corporate Procurement

The basis of most corporate travel negotiations is a trade-off between incremental market share to the supplier and discounted pricing to the corporation.  When negotiating contracts, corporations must be able to demonstrate their ability to shift market share to a given supplier.

Corporate Program Management

This ability to shift market share depends upon proactive monitoring and management of travel programs.  Key areas that suppliers look to for evidence of effective program management include:

• Supplier management – ensuring suppliers abide by contract requirements and assist the corporation in promoting use of the preferred program.
• Demand management – compelling travelers to use the preferred programs via established tools, policies and processes.
• Consolidated Data – Consolidated company-wide travel data, which includes booked data, credit card data, travel agency data, and supplier data as appropriate.
• Performance Monitoring – Best practice is to establish centralized management of travel programs either by an individual (typically a Corporate Travel Manager) or by a team (Travel Council).  This team communicates the program, trains travelers, and writes policy.  In addition, they determine Key Performance Indicators (KPI) to monitor program usage, establish corrective action plans and drive continuous improvement.
• Policy – The Travel Council sets and enforces travel policy.

I depict high-level corporate travel program components in the following diagram.

Federal Procurement

Now let us review travel in the federal market.  Although the government is not able to provide suppliers with the level of travel data put forth by most corporations, the government is proactive in procuring travel.  The government has preferred programs for all major areas of travel including airfare (CPP), lodging (FedRooms) and car rental (Rental Car Program).  Although rates are not negotiated in the truest sense (an exchange of volume for price discounts), rates are pre-determined and auditable.

Federal Program Management

The government has worked diligently in the recent past to establish and implement comprehensive travel programs.  It is helpful to review government travel with respect to the same categories provided in the corporate market above.  An assessment of the current state of government travel shows:

• Supplier management – GSA conducts audits of the GDS to ensure suppliers are correctly loading negotiated rates.  In addition, GSA staff regularly meet with suppliers to discuss future program enhancements.
• Demand management – Most Federal Agencies have installed and implemented one of three E-Gov Travel Systems.  These systems provide federal agencies the tool and structure needed to guide travelers towards use of preferred travel programs.
• Consolidated Data – Currently the government is unable to consolidate government-wide travel data.  However, GSA has a contract in place to compile data through implementation of the Business Travel Intelligence system, and meaningful results are expected in the near future.
• Performance Monitoring – By current design, there is no centralized body within the Federal government that is responsible for monitoring performance or any overall travel program management.  While GSA serves as a central body for procuring travel, performance to policy and compliance to preferred programs are left to individual federal agencies.  In practice, individual agencies do little to ensure usage of preferred travel programs.  This shortcoming breaks the continuum of procurement and program management.  Because future negotiations are heavily dependent upon historical program usage, this lack of proactive oversight significantly reduces the government’s ability to leverage their travel volume.
• Policy – GSA and DoD establish and set travel policy via the Federal Travel Regulations (FTR) and Joint Travel Regulations (JTR) respectively.  In addition Standardized Regulations (DSSR) are issued by the Department of State for foreign travel.

I show the same travel components within the context of government travel in the following diagram.  As shown here, because the government does not proactively monitor program performance, the ability to leverage travel volume in future procurements is limited.

Summary

The federal government has taken great strides in developing a comprehensive travel program.  The government has workable solutions in place for supplier management, demand management, and travel policy.  Although consolidated government-wide travel data is not currently available, GSA does have a contract in place to provide it.  The biggest remaining challenge is centralized management of government-wide travel programs.  While a centralized approach to travel management would require that federal agencies turn over a small amount of control to a central body, the benefits of cost savings and higher traveler satisfaction would far outweigh this perceived loss of control.

Recommendation

I recommend that the federal government establish a government-wide travel program management office within GSA for the specific purpose of managing (monitoring performance, enforcing compliance, revising policy, etc) travel programs across the federal government.  Giving GSA the authority to proactively manage travel on behalf of all federal agencies would mimic corporate best practices in that it would align procurement with program management functions.  Without a centralized body managing government travel, the federal government will never be able to effectively leverage their $15+ Billion in annual travel spend.

by Ted Schuerman

By:  Scott Carver

Working for an FFRDC proves to show significant differences between GSA CPP rates and corporate rates.  As airlines continue to struggle to make profit in today’s world due to fuel hikes, competition, union employees, airport fees, mergers, etc., corporate contracts have been revamped to tiered programs which provide small discounts on published airfares with heavy restrictions.

These tiered programs are restrictive and cumbersome to manage hampering the many cost savings initiatives that are incorporated into travel programs. Some of these cost saving initiatives are impeded by drastic changes including additional baggage fees, blackout dates, preferred seating fees, on board amenities, and increased ticketing change fees.  In contrast, the CPP offers no advance purchase requirement, no blackout dates, all tickets are fully refundable or other penalties associated with the airfare.

While many cost saving initiatives are incorporated into travel programs, we also struggle with rising costs of purchasing travel under the Fly America Act.   In most cases with codesharing the foreign carrier offers a significantly lower airfare for the same trip.   The Fly America Act requires all ticket purchases to be issued on the American carrier ticket stock which means we purchase the higher airfare.  This appears, to employees and government sponsors, that our cost savings measures are lacking.

After all, we are also using taxpayer dollars to purchase travel.

by Stefanie Tretola

What is Code sharing?

A code share is an agreement between airlines that allows the sale of seats by a partner airline on another airline’s flight as if the flight were its own.  Code shares can provide a cost-effective way for a carrier to enter new markets by using the facilities and operations of a partner carrier.

This can be misleading for travelers who believe they have purchased a ticket on one airline only to discover they are actually flying another. Or worse, when that traveler believes they are staying on a single airline on a multi-leg trip only to discover that they are not only changing planes, but changing airlines, too, in their connecting city.

How do I know if I am booking a code share flight?

Under U.S. Department of Transportation rules, carriers must clearly disclose code share flights on schedules and passenger itineraries by marking them with an asterisk or other “easily identifiable mark” along with the name of the actual transporting carrier.

Code shares are identified in our E Travel System with an “Operated By” statement next to the carrier operating the flight selected.

Where should I check-in if I booked a code share flight?

Typically, you should check in with and board the airline that is operating the flight, not the carrier that sold you the ticket.

How do I change my itinerary or request a specific seat?

Most airlines will tell you that you need to contact the carrier that sold you the ticket rather than the carrier you are actually flying.

Which airline is responsible for reservation issues or lost baggage?

While the selling airline is most often responsible for reservation issues, lost or damaged baggage claims are generally submitted to the last airline that handled your luggage at your destination.

Are there price differences on code share flights?

There can be pricing discrepancies on the same code share flights sold by two different airlines. The reason for this is that each airline sets its own prices in a code share situation to preserve the spirit of competition.

Contract carriers with code share business agreements cannot obligate their code share partner’s inventories for YCA contract fares. In the E Travel System, travelers may see a fare listed as a GSA City Pair until it is priced, and then the fare becomes a standard commercial fare. Only those fares highlighted as a GSA City Pair when selected are the actual contract fares. Travelers should check the fare rules for all other flights to identify any flight restrictions.

Will the code share partner accept my Frequent Flier Miles?

Here is another complexity: A code share does not guarantee the partner airlines accept each other’s frequent flier miles. Travelers will need to confirm that their frequent flier miles have been recorded when they check in at the ticket counter.

by Carole Byrd

Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency.  Use of this equipment is consistent with the agency’s policy governing limited personal use.

 The Federal Travel Regulations, (FTR) requires government travelers to use a contract fare when available, use coach class service unless otherwise authorized, and to use a U.S. Flag Air Carrier.  Contract fares must be used unless you have a valid justification.  Some of the justifications are:

1. There are no seats available on a contract flight, or the flights departure/arrival times do not enable you to incur overnight lodging costs.
2. The contract carrier would require travel during non-work hours.
3. A non-contract carrier offers a lower fare available to the general public and using it reduces the total cost to the government.
4. Rail service is available and is cost effective and meets mission requirements.
5. Smoking is permitted on the contract flight.  The justification must be entered by the traveler in the Passenger Name Record (PNR) to justify usage of a non-contract fare.  This must be approved by the approving official.

The fares for domestic travel include federal, state and local taxes.  Passenger charges are added by the local airport authority, fees are established by the GDS, and security fees set by the Department of Homeland Security are not included and are listed separately.  All international fares are exclusive of taxes and fees.

One of the most recent and significant change to the CPP is that airlines are allowed to add a fuel surcharge.  The Airline may impose a fuel surcharge in accordance with their GSA contract after the surcharge has been active in the commercial market for 14 consecutive days.  This change was caused by the rising cost of jet fuel and the need for the airlines to regain come of the cost.

The fares offered by the airlines are one way, allowing for complex trip construction to multiple destinations.  There are several advantages to using a contract fare such as:

• Ÿ  No advance purchase required
• Ÿ  No minimum or maximum length stay required
• Ÿ  Tickets are fully refundable
• Ÿ  Last seat availability
• Ÿ  No blackout periods
• Ÿ  Prices in effect for one full year
• Ÿ  No penalties/fees for rebooking, re-ticketing or cancellation
• Ÿ  Capacity fares availability
• Ÿ  Contract business fares available

Contract fares are identifiable because normally the fare designator

 “YCA” is reflected.  The ticket will show a three-letter fare basis code with CA(Contract Award)as part of it.

YCA FARE – The code used to designate unrestricted coach class contract fares for government contract carriers.  “CA” means “contract award.”

_CA FARE – A three letter code used to identify capacity controlled coach class contract fares for government contract carriers.

_CB FARE – A three letter code used to identify capacity controlled government contract business class fares.

The first letter of the three-letter fare basis code will vary by airline (e.g., QCA, LCA, etc.). The only difference between the YCA and _CA is that there are a limited number of seats on the lower _CA Airline City Pair rate. Therefore, travelers should make flight reservations as soon as plans are firm.

Airline tickets purchased for the government traveler for authorized travel are considered unused or partially used when the travel is terminated short of the authorized destination, the return portion of the round trip is not used, and travel actually furnished is different or of a lesser value than authorized.

The government traveler must notify his/her agency when refunds are due on an unused or partially used ticket (paper or e-ticket) or no refund will take place. Millions of dollars are lost to the government and taxpayers each year because travelers do not initiate the refund process.

In order to obtain a refund, the traveler is responsible for contacting the travel agent, or the Commercial Travel Office (CTO), or the airlines (if purchased from the airline directly).

 By Deva Wilson

“The views expressed are those of the author and do not reflect any position of the Government or my agency.”

The City Pair Program (CPP) which was developed by the General Services Administration (GSA) to provide discounted air transportation services to Federal Government travelers with an average savings of 60-69% below commercial air fares.  The CPP is projected to save the Federal Government billions of dollars in Fiscal Year 2009.  The CPP has many features that allow government travelers all the flexibility that is possible.  These features include non-stop service awarded in 95% of the markets where non-stop service is offered; tickets are fully refundable, no minimum or maximum length of stay required; unrestricted fares, meaning no advance purchase is required; no charge for cancellations; no blackout periods; and last seat availability.

The FTR will allow you to use a non-contract carrier if you meet one of the allowed exceptions.  Travelers using a non-contract carrier should reasonably anticipate using the ticket, since many non-contract airfares may be nonrefundable or incur penalties for any cancellations or exchanges.  Use of a non-contract carrier requires travelers to acquire authorization from their management.  If a traveler is authorized to use a non-contract carrier, he or she must still use their designated ETS.  Travelers should never use an outside travel agent or commercial websites to obtain air reservations.

The FTR also mandates that travelers are responsible for any additional costs resulting from the failure to use their ETS.  This may include service fees, cancellation penalties, or any other additional costs.  In addition, your agency may take appropriate disciplinary action if an employee fails to use their ETS.

by Brian Shears

The contents of this message are mine personally and do not reflect any position of the Government or my agency.

In 1980 the General Services Administration (GSA) developed the City Pair Program (CPP) to provide discounted air passenger transportation services to Federal government travelers. In the beginning, this service only covered 11 markets, but has grown to over 5,000 city pairs. The average savings is 63%-77% below commercial full fares. A critical aspect of travel planning is flexibility and the CPP has many features that allow Government travelers all the flexibility possible.

Features of the Service include:

• Non-stop service was awarded on 95% of the markets where non-stop service was offered.
• Fares are priced on one-way routes, permitting agency travelers to plan multiple destinations.
• Fares are unrestricted, meaning:
• No advance purchase required
• Tickets are fully refundable
• No charge for cancellations or changes
• Last seat availability
• No blackout periods
• No minimum or maximum length of stay required

The Federal Travel Regulations (FTR) require nearly all Federal government travelers to use the CPP which is part of the reason GSA is able to obtain such phenomenal pricing. There are a few exceptions for not using the CPP; however, travelers that use these exceptions would have to abide by the many restrictions that typically go along with standard commercial fares. Some of these restrictions could include non-refundability and change or cancellation fees, which could increase the total trip cost by several hundred dollars.

Some airlines that do not win the contract offer Federal travelers a government fare—sometimes referred to as a “me too” or “matching” fare. These fares are usually comparable to the contract fare in price; however, they may or may not be fully refundable and may come with ticketing restrictions.

Our E Travel System has the mandatory use of the CPP built in so that travelers can easily identify which fares are contract carriers and which ones are not. Built in audits force travelers who do not chose the contract carrier to provide FTR justifications before completing their travel authorization. These built in controls encourage the use of the CPP and keep our travelers in compliance with Federal travel regulations. Unfortunately, travelers who book their reservations by calling the agency designated TMC directly run into issues with identifying a CPP and a non-contract government fare. The issue usually involves the terminology used by the TMC agent and the travelers understanding of the difference between a contract and non-contract government fare. Booking reservations directly with the TMC bypasses the built in audit controls thus allowing the traveler a false sense of security in believing that they have booked their reservations in compliance with the FTR. On a positive note, once the TMC transmits the traditional reservations back into the E Travel System, the system picks up the built in audits and forces the next person in the routing to justify use of a non-contract fare. To alleviate confusion between a CPP and non-contract government fare, travelers should always ask for a contract fare instead of a government fare when booking directly with the TMC.

by Carole Byrd

Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency.  Use of this equipment is consistent with the agency’s policy governing limited personal use.

My agency receives many requests from our customers for various reports.  Nearly every day, we receive a new request for information.  In addition to the requests that we receive from our customers, we also receive data calls from the Department and General Services Administration (GSA).  Depending on what information is being requested, we must make the determination as to how to gather the information and whether we should get the information from the E-Gov Travel System, the travel management center (TMC), or the agency’s accounting system. Even though the ETS and the TMC provides various reports, we have found that it may be necessary to pull the information from the accounting system.  The ETS vendor and the TMC have always been very accommodating when we request data.  If they are unclear about what information is being requested, they always ask for clarification.

Before the onset of the ETS, reports had to be created manually or maybe the data was not captured anywhere, and therefore it could not be reported.  The ETS has improved the reporting of travel expenditures for Federal Government travelers.  Now, it’s much easier to know how often the City Pair Program (CPP) is used, who is requesting premium class travel and why, and if there are any unused airline tickets.  The ETS forces the traveler or document preparer to justify certain requests and expenses.  Therefore, management not only knows that the traveler made the request, but also knows why.

Some of the reports that we regularly request from our ETS are: the Traveler Information Report, the Routing List Report, the Delegate Authority Report, and the Trip Status Report.  Some of the reports that we regularly request from our TMC are: the First Class Travel Report, the Fee Allocator Detail Report, the Monthly Travel Summary, and the Trip Detail Report.

Reporting is just another benefit of converting to an ETS.

by Pam Morton

The contents of this message are mine personally and do not reflect any position of the Government or my agency.