1 / 21

December 2007

Airline Briefing City Pair Program. FY 2009 Solicitation. Airline Industry Desired Changes and Government Findings. December 2007. Discussion Topics – Considered Pre-Determination.

blanca
Download Presentation

December 2007

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Airline Briefing City Pair Program FY 2009 Solicitation Airline Industry Desired Changes and Government Findings December 2007

  2. Discussion Topics – Considered Pre-Determination • Outline desired changes and action items identified at November 1, 2007 Airline Industry and Customer Forum • Present findings • Discuss and evaluate findings • Next Steps 2

  3. Background • November 1, 2007 Airline Industry Forum • Airlines represented: American, United, Delta, Northwest, AirTran, Mesa, and Midwest • Government represented: NSF, VA, HUD, GSA, SSA, DOI, NASA, State, Treasury, Coast Guard, NBC, EPA, DHS, DOE, PBGC, Ed, DOD, AMC, TRANSCOM • Discussed desired changes the airline industry would like made to the FY 2009 City Pair Program (CPP) solicitation and contract • Requested changes that align with commercial practices • Ticketing Time Limits (TTL) be applied to CPP tickets • Reduces spoilage • Implement Penalty Fees • For changes, cancellations or re-issuing of tickets

  4. Action Items to Evaluate • Ticketing Time Limits (TTL) • Evaluate the impact TTL would have on current booking and ticketing practices including financial impact • Develop a standard definition for TTL • Impact of Continuing Resolutions on Government’s ability to purchase tickets if TTL is implemented • Evaluate ticket refund/reimbursement cycle-timeline along with SmartPay card refund cycle-timeline and the impact on individually billed account card holders • Assess programming requirements for Defense Travel System and E-Gov Travel Service to accommodate TTL • Identify impacts of increased changes/cancellations to reservations and re-issued tickets i.e. travel agency fees • Assess overall cost impact • Implement Penalty Fees • Assess overall cost impact

  5. Ticketing Time Limit Findings

  6. 1. Evaluate the impact TTL would have on current booking and ticketing practices including financial impacts • Typical government practice: • Hold ticketing to retain flexibility and change w/o fee • Tickets are issued a mean of 4 days prior to departure • *86% are purchased 7 days or less prior to departure • 12% issued day of departure • 14% issued 1 day prior to departure • 9% issued 2 days prior to departure • 12% issued 3 days prior to departure • 19% issued 4 days prior to departure • 14% issued 5 days prior to departure • 4% issued 6 days prior to departure • 2% issued 7 days prior to departure 6

  7. 1. Evaluate the impact, continued • Behavior – Book _CA as far in advance as possible Day 7 Determination or opt for YCA with in 7 Days • Unable to forecast traveler response to TTL • It is expected the transaction costs would rise to cover costs of changes made to tickets after issuance • Explore the possibility of a TTL test at one or more Agencies • Assess traveler and financial impacts

  8. 2. Develop a standard definition for TTL • TTL – Airline goal to get seats back in inventory with time to resell • TTL - May be based either on a set amount of time before flight departure or a set amount of time after a reservation is made • Regardless of the type of time limit, reservations for flights in YCA or _CA may be made up to the time of flight departure subject to seat availability 8

  9. 2. Develop a standard definition for TTL, continued Reservations not ticketed 7 Days prior are automatically cancelled 9

  10. 3. Impact of Continuing Resolution on Government’s ability to purchase tickets if TTL is implemented • The Government’s use of Continuing Resolutions to fund its operations appears to have minimal impact on proposed TTL • The Government funds essential travel under a Continuing Resolution • A number of Agencies are funded differently • The last Government shut down occurred in 1995-96 intermittently for total of 18 business days 10

  11. 4. Evaluate ticket refund/reimbursement cycle-timeline along with SmartPay card refund cycle-timeline and impact on individually billed account card holders Background: • Airfare is booked through Defense Travel System, E-Gov Travel Service or travel agencies (CTOs, TMCs) • Domestic airfare paid for by the SmartPay card • SmartPay cards can be: • Centrally Billed Accounts (CBA) • Refunds are returned directly to the agency’s CBA • Individually Billed Accounts (IBA) • Individuals are responsible for on-time payment in full of their account • Ticket refunds are credited to the traveler’s IBA • Agencies receive incentives for timely payment of SmartPay accounts 11

  12. 4. Airline ticket refund/reimbursement cycle and timeline • Payment for cancelled ticket may be due to SmartPay before refund is processed • Travelers must pay their IBA in full, even if the refund for the cancelled ticket has not been credited

  13. 4. SmartPay billing and payment cycle • IBA holders have 21 days from billing date to pay account in full • Refund Process takes 17-18 Days Minimally Assuming CTO/TMC Process Weekly 13 Source: Smart Pay Contract

  14. 4. Scenario of Transactions and Contractor Actions regarding account Combined Refund and Billing / Payment Cycles

  15. 4. Corporate Practices • Model: Negotiated Air Programs Fare Buckets Discount percentages • Tier 1 F, B, Full coach XX% • Tier 2 B,H,M Range: Low XX% to X% • Tier 3 Lower bucket non-refundable Range: Low X% to none* • The more restrictive and lower in cost the fare – the smaller the percentage of corporate discount • Tickets purchased based on fare rules • Refund process • If using corporate card on a refundable ticket and trip is cancelled, traveler requests a charge suspension until refund is issued • Traveler has been provided an advance, must refund company and company takes on administrative job to track • Few corporations require the traveler to float the expense • For non refundable tickets company must manage the inventory – most common situation • Need information on refund process for BSP and Non-ARC airlines

  16. 5. Assess programming requirements for Defense Travel System and E-Gov Travel Service to accommodate TTL • Defense Travel System still evaluating the impact • CTO – May Require Contract Modification • DTS – System Change – Impact unknown at this time • E-Gov Travel Service - TTL will have minimal impact • CTO/TMC – minimal impact as TTL is loaded into Fare Rules for auto cancellation 16

  17. 6. Identify impacts of increased changes/cancellations to reservations and re-issued tickets i.e. travel agency fees (CTO/TMC) Data is not available to compute financial impact, estimates are: CTO/TMC fees CTO/TMC fees to issue a new ticket – average fee $27.36 (domestic) DTMO - $20.00 Full Service - $10.00 Self Service Voucher fees Average voucher cost is $12.63 (domestic) YCA_CA shift $157 average savings from YCA to _CA

  18. Implement Penalty Fee Findings

  19. 1. Assess overall cost impact of penalty fees - Notional • Penalties • Assume 4,000,000 round trip tickets are issued • Estimate for $50 and $100 per ticket penalty fee • Consider - No Show Fee vs Cancellation Fee 19

  20. Impact of TTL and Penalties CTO/TMC Fees Voucher fees YCA-CA shift Change and Cancellation Penalties Additional considerations: Administrative and traveler time costs – undetermined Delinquency impact on agencies and IBA holders 20

  21. Discuss findings • Next Steps

More Related