Strength of City Pair Program Saves Billions for Federal Agencies
WASHINGTON — August 7, 2014, the U.S. General Services Administration announced the award of its successful cost-saving air travel contracts for 2015, which will save taxpayers approximately $2.3 billion. Under GSA’s City Pair Program, airfare rates for the federal government’s official travel are pre-negotiated and firm-fixed-price for a year offering a 23% discount below corporate benchmark fares. In addition to offering considerable discounts, the City Pair Program allows the federal government additional flexibility in how it books air travel, such as no cancellation or change fees.
FAS Commissioner Tom Sharpe said:
“GSA’s mission is to help federal agencies save money, and that includes getting the best price for government travelers. By leveraging the government’s buying power, we are able to help federal agencies reduce travel costs and save billions of taxpayer dollars.”
GSA’s data-driven analytical approach to managing the program and negotiating with the carriers is driving cost savings and performance.
Average one-way ticket prices for domestic flights have dropped four percent and international are slightly below one percent from last year, even at a time when commercial airfares have risen 6% year to date in 2014.
The City Pair Program continues to significantly expand its global reach; total markets awarded are up 55% in FY 2015 to 7,894 markets compared to 5084 markets in FY2013.
Expanding markets continue to lower agencies’ overall travel expense by lowering their airfares to meet their missions.
Another positive trend this year is the increased number of markets which have dual fares, until this year there were less than half the markets, 2,855 with two fares, this year there was a significant increase to 6,921, offering dual fares in 88% of the markets. Dual fare markets provide flexibility in discounted fares for immediate travel and more deeply discounted fares for booking flights early. This is an estimated incremental savings of $88.5M.
Eight major U.S. carriers were awarded contracts. When awarding City Pair contracts to airlines, GSA considers a number of criteria, including availability of non-stop service, total number of flights, flight availability, average elapsed flight time, availability of jet service, and price of service. The 2015 rates will become effective October 1, 2014.
For more information on the Airline City Pair Program or to view air fares, please visit Airline City Pairs.