1. Government Travel Advisory Committee September 23, 2014
City Pair Program
Government Travel Advisory Committee
September 23, 2014
11/15/2018

2. Agenda City Pair Program – Introduction How We Start
Where We Came From - Where We Are Today
How We Start
Evaluation Criteria
FY15 Goals
FY15 Award

3. City Pair Program - Introduction
Mandatory Program for Government Travel – FTR/JFTR
Largest Managed Program in the World
Started – Markets – 3 Carriers
Eastern, National, Piedmont
Progressed – Today 7,894 Markets – 8 Carriers
Current Benefits
No Advanced/Immediate Purchase – No Change Fees – No Cancellation Penalties, Refundable Tickets

4. How We Start Hold One-on-One Meetings with Carriers
Discuss –
Previous Solicitation –
Improvements / Targets –
New Issues/Ideas from CPP Perspective
New Ideas from Carrier Perspective – Industry Changes
Hold Customer Meetings
Previous and New Solicitation–
Leverage Knowledge Engagement to Introduce Improvements
New Ideas from CPP Perspective
New Ideas from Customer Perspective – Needs - Requirements
Hold Joint Industry / Customer Meetings
Conduct Pre-Solicitation Conference Annually

5. How We Start Conduct Market Research Identify Markets for Solicitation
Based On Past Passenger Utilization
Based On CPP Requirements – Non-Stop – Connection
Obtain Benchmark Data
Corporate Data of What is Paid in Each Market

6. Evaluation Criteria Receive Each Carriers Offerings
Review Carrier Proposals by Each Market
Compare Previous Years proposals– Average Segment Fare - Price
Compare Service Offerings
Number of Flights – Size of Aircraft – Time Bands – New Competition in Market
Conduct Technical Evaluation Board
Identify Markets for Further Negotiations
Award

7. FY15 Goals Increase number of markets solicited for FY15
Potential increase of 1,300 additional markets
Additional market offerings will ensure more markets are captured and covered by benefits and flexibility the CPP program offers
Most new markets will be in group 2 markets (lower passenger markets)
Increase number of markets with dual fare capability
Requesting dual fare markets _CA in ALL markets solicited
Most new markets will be in Group 2 Markets
Additional dual fare markets ensure lower fare offerings can be achieved with early reservations.

8. Expanded Markets Solicited:
8,732
Markets solicited in FY15
7,894
Markets Awarded in FY15
Program Coverage:
Solicited Markets of Total eligible segments
92.4%
Awarded markets of Total eligible segments
88.5%
FY15 CPP
Contract Value:
$1.69B
Changes to Improve Competition FY15
Increase number of markets solicited for FY15
Increase number of markets with dual fare capability
Total Contract Value
Expanded _CA Markets:
6,921
Awarded Markets that offer YCA and _CA 88% Coverage

9. Participating Carriers
Southwest (WN)
United (UA)
American (AA)
Delta (DL)
Alaskan Airlines (AS)
JetBlue (B6)
Sun Country (SY)
Hawaiian Airlines (HA)

10. Markets Solicited
Category
FY14 Markets
FY15 Markets
Group 1 Domestic
2,756
2,653
Group 1 International
1,142
1,546
Group 2 Domestic
2,643
3,941
Group 2 International
494
592
Total
7,035
8,732
Airlines welcomed the opportunity to solicit for Group 2
COPs was user friendly
Additional market offerings will ensure more markets are captured and covered by benefits and flexibility that program offers
Increase of 1,700 markets
Previously solicited - Mostly due to DOD demand  offered markets for FY'15 is a 24% increase over FY'14
FY11 6,689
12 6,727
13 7,005
14 7,035
15 8,732
Historically, GSA solicits bids for roughly 6,000 markets. This year, we are working to increase the number to over 8,000. Most of the new markets will be in Group 2 markets. All group 2 markets are evaluated for price only. Increased markets will ensure that many markets that DoD (Programs biggest customer) will be under the program and travelers will continue to receive the great benefits and flexibility that the program provides.
Historically, business fares were not evaluated for service or price. If a carrier offered a coach fare, their business fare was accepted unless it was unreasonable. This automatic acceptance was due to system implications (i.e. it was difficult for the contracting office to separate the two fares). We are working with the system analyst to change this. We are currently in testing environment to ensure contracting will be able to accept the coach fare but reject the business class fare if it deemed not fair or reasonable.

11. Overall 94% offer success rate
Total Bids Received
Response
Group 1
Group 2
Total
Bids Received
4,196
4,536
8,166
Response Rate
95 %
93%
94%
 There are as many “competitive” routings as non competitive strength markets (monopoly) routings in the mix
Overall 94% offer success rate

12. AWARDs

13. Five Year Trend Analysis
FY11
FY12
FY13
FY14
FY15
Number of Carriers 13 11 10 8
Total Passenger Counts (Solicited & Estimated)
10,040,392
10,716,289
7,897,129
7,394,432
6,004,389
Total Markets Solicited
6,689
6,727
7,005
7,037
8,732
Total Number of Awards
5,722
6,157
5,084
6,395
7,894
% of awarded _CA markets
18%
22%
26%
28%
88%
Percentage Savings Off Market Fare (Weighted by YCA/_CA 75/25 and by PAX)
68%
70.06%
73.16%
73.4%
74.7%
Savings from Corporate Benchmarks
$2.2B
$2.3B
Total Dollar Value of Contract
$2.93B
$3.17B
$2.18B
$2.0B
$1.69B
Average One-Way Segment Price
$303.51
$ Dom
$ Int’l
$302.90
$ Dom
$ Int’l
$309.06
$ Dom
$ Int’l
$291.80
$ Dom
$ Int’l
$280.30
$223.52
$794.23

14. FY15 Award Statistics Measure Domestic International
# of Awarded Markets
6,072
1,822
Average One Way Segment Price
$223
$794
% Decrease in Price from FY 14
-4%
-.1%

15. FY15 Improvements Domestic International
* ATL to DCA price reduction from $153 to $121
21% price reduction
$1,946,240 in annual savings
* DCA to MSY price reduction from $397 to $209
47% price reduction
$2,936,184 in annual savings
International
* Washington to Dubai, UAE
price reduction from $1012 to $799
21% price reduction
$2,442,471 annual savings
* HNL to OKA price reduction from $1,374 to $1,094
20% price reduction
$1,844,920 in annual savings
* Based on Composite Fare
Domestic: Atlanta (ATL) to Washington National (DCA), one of CPP’s top markets, saw a price reduction from $153 to $121  in composite fare rate with non-stop service, a 21% price reduction that will potentially result in $1,946,240 in annual savings. Washington National (DCA) to New Orleans (MSY) , reduced from $397 to $209 in composite fare rate  with non-stop service, a 47% price reduction that will potentially result in $2,936,184 in annual savings.
Washington area airports to Dubai, UAE was reduced from $1,012 to $799, a 21% drop that will realize $2,442,471  in annual savings. Honolulu, Hawaii (HNL) to Okinawa, Japan (OKA) was reduced from $1,374 to $1,094, a 20% decrease and a $1,844,920 annual savings.  Also - more dual fare markets were awarded in Group 1 and 2  international markets  this year for additional cost savings. Book early to take advantage of these lower fares.
In our top three traveled markets government fares were negotiated with even greater savings of over commercial fares:
Atlanta – Washington     $152 YCA  -  $111 _CA  Average of 47% off commercial market fare
Washington – Chicago                   $181 YCA  -  $114 _CA Average of 24% off commercial market fare
Washington – Boston      $104 YCA  -  $  57 _CA  Average of 35% off commercial market fare

16. FY15: Top 3 Markets Market YCA _CA % off corporate fare ATL - DCA $152
$111
47%
DCA - ORD
$181
$114
24%
DCA - BOS
$104
$57
35%

17. NEXT steps

18. Confirmation of Service
Next Actionable Steps
Action
Date
Confirmation of Service
All Fares Loaded
August August 26
Contract Effective
October 1
Key next steps for CPP

19. Questions?