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City Pair Program SGTP

City Pair Program SGTP . September 2013. Agenda. FY14 Program Information Measuring Savings Auto Cancellation Reducing Travel Costs CPP Evolution. FY14 Program Information. Five Year Trend. FY 14 City Pair Program. Awarded to 10 airlines.

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City Pair Program SGTP

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  1. City Pair ProgramSGTP September 2013

  2. Agenda • FY14 Program Information • Measuring Savings • Auto Cancellation • Reducing Travel Costs • CPP Evolution

  3. FY14 Program Information

  4. Five Year Trend

  5. FY 14 City Pair Program • Awarded to 10 airlines. • Increased total awards up 25% to 6,396. Last year’s decision to not award in markets where airline fares were well above commercial fares resulted in competitive pricing in those markets this year. • Awards are effective October 1, 2013. • City Pair fares for FY14 are consistently below corporate benchmarks in all of our Top Markets. • Compared to last year, the average fare went DOWN 4% from $242 to $233 (domestic)and 7% from $851 to $795 (international).

  6. FY 14 City Pair Program • City Pair Program is estimated to deliver $2.2B in savingsto the Federal Government, representing a 59.7% discount below commercial market fares. • Non-stop marketsexpandedin FY14 to 1887, up 20% from FY13 which will assist travelers in making one day trips. • For FY14, CPP retained all of the same benefits which are unique to the government, including the flexibility to book one-way, multi-leg, and round-trip airfare at the lowest cost possible, while retaining the ability to adjust or cancel flights at no additional cost. 

  7. High Volume Markets Compared Against Corporate Fares

  8. Good News Stories • DCA to Detroit, reduced from $224 to $184 with non-stop service, a 17% price reduction that will potentially result in $1m in annual savings. • Denver to Dulles, reduced from $451 to $374 with non-stop service, a 17% price reduction that will potentially result in $1.5m in annual savings. • Washington area airports to Stuttgart, Germany was reduced from $738 to $545, a 26% drop that willrealize$1m in annual savings.

  9. Frontier and Virgin America • No longer contract carriers for FY13. • Carriers were not awarded markets for FY14. • Any reservations not ticketed prior to their removal cannot be ticketed. • Another reservation must be made with new carrier.

  10. Measuring Savings

  11. How much do we really save? • Disadvantages of Historical method • Passenger counts not reflective of current year's trending. • Market fare 30‐40% higher for the major carriers than the same type of fare available 0‐2 days out on the airline's website.

  12. Auto Cancellation

  13. Auto Cancellation • Applies to all reservations (both domestic and international) • There are no fees or penalties associated with auto-cancellation of a reservation or rebooking a reservation that was subjected to auto-cancellation.

  14. Auto Cancellation Carrier Participation

  15. Suggested Agency Mitigation Strategies • Implement policy to approve reservations at least three business days prior to departure • Create practices to review open authorizations reports on a regular basis • Coordinate with your TMC to notify passengers via email in the event of cancellation

  16. Reducing Travel Costs

  17. Opportunities for Achieving Reduced Travel Costs • OGP released bulletin on 6/4/13 • Review internal travel policies to ensure incorporation of CPP contract and non- contract fares that complies with the FTR

  18. OGP Bulletin • May agencies authorize use of a non-contract air carrier for Federal employee travel? • What factors are included when calculating the lowest total trip cost? • What risks should be mitigated with non- contract airfare? • How will travelers know which airfare to select?

  19. Suggestions for Agency Action • Reserve, Approve and Ticket early! • Take advantage of _CA fares. • Educate traveler on risks associated with restricted tickets. • Implement policies to mitigate risks. • Encourage use of approved booking channels and SmartPay card.

  20. CPP Evolution

  21. FY 12 FY 13 FY 14 FY 15 CPP Evolution to a Fully Data Driven Model Improved Supplier Strategy • Implement models to cover more fare categories and reduce travel costs Reduce Trip Costs • Use Data to Better Manage Supplier Outcomes • Experiment With New Models DATA DRIVEN PROCESS Improve Negotiations Strength • Used Data to Limit Awards Higher Than Corporate or Market Price • Preliminary Review of Hybrid Discount Models • Introduced Corporate Benchmarks • Evaluate Corporate Fare Structure IMPROVED CPP COVERAGE AND UTILIZATION

  22. What’s Next for CPP • Attain Stronger Discounts • Increase _CA usage and awards • Evaluation criteria derived from comprehensive travel data • Develop key metrics for savings

  23. Questions Jerome Bristow, Program Manager Jerome.bristow@gsa.gov Iman Freeman, Analyst Iman.freeman@gsa.gov

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