Corporation for National and Community Service

Self-insuring Airline Retail Sale Ticket Fund Saves Millions

Problem: While GSA’s government-wide travel policies permit Federal employees to take advantage of airlines’ retail sale prices, because the employee must assume risks of cancellation or change fees, employees rarely take advantage of sale ticket prices which are far below the refundable GSA City Pair program fare prices. While city pair fares save as much as 70 percent, that savings is measured against retail fully refundable tickets, not sale prices. A majority of federal business travel is performed using fixed dates known far in advance with little to no risk of cancellation or change. Tens of millions of dollars could be saved annually if just a fraction of the $3.1 billion in city pair ticketing was instead purchased using retail sale prices.

 

Solution: Remove the risk to the federal employee of losing his/her own money if a ticket cancellation or change fee is incurred. Require all federal agencies to fund a government-wide self-insuring cost pool (the Fund) by paying a $1 per ticket surcharge every time a city pair fare is purchased. Agencies are commonly “tapped” by GSA to pay similar fees, so there is no administrative burden and GSA can easily count tickets issued to assess accurate taps for the Fund. Employee claims for reimbursement will be paid by the same voucher system used today, and the agency will be reimbursed by the Fund using a credit against future “taps.” Any balance in the Fund would be diverted back to the city pair program administration costs. Since airlines already limit the number of city pair seats per flight and generally sellout city pair seats, contract bids for city pairs will not increase. Since most retail sale fares are purchased from the same airline holding the city pair contract, the airline will have level ticket volume. More federal travel can occur within the same agency budget, a win-win for the federal programs needing to travel, the airlines, GSA, and taxpayers.

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Idea No. 12363