Pricing Teacher Airline
Tickets
Michael Popinchalk
23 March 2005
________________________________________________________________
Original Question: I am
seeking advice from international schools who reimburse their teachers for
return air travel by a formula involving IATA Fare Rates. It seems the system
of pricing for airfares has changed in the last three months, so any policies
or guidelines would be most appreciated. Our current contract wording states, "the
cost of transportation shall not exceed that of economy air fare by the most
direct route.
Annual
Home Leave: After initial two-year contract, a round trip excursion ticket for
employees and dependents to point of origin will be granted.
We are curious
how other schools deal with the pricing of this benefits.
Responses by Nation:
We do not provide
airfare at the end of the first year. At
the end of the contract (2 years) and every year after that we provide a round
trip excursion airfare. We just went to
the travel agent yesterday to get the prices.
I will meet with the teachers next week and give them their
allowance. Because of tax laws here it
is complicated but in the end everyone gets the equivalent money for a round
trip excursion.
In 1999 we changed our
policy to say that we provided the lowest available EXCURSIION, not economy,
airfare from school to home of record on an American carrier. The difference in rates between economy and
excursion can be up to 100%. The
philosophy is that we are contracted to get people to home of record and back
each year, not subsidize the vacation.
We allow people to either take the cash equivalent or have us buy the
ticket.
We have an on-campus
travel agent. They receive a list of home leave destinations and the
number of dependents for each destination from my office in February and
collect prices from a variety of airlines.
They then provide us
with the best quoted rate for each destination using the most direct
route. If the most direct route has a five hour or longer layover, we
ask them to go with an airline that has a more reasonable layover (and the most
direct route) even it is a bit more expensive for us. In this case, we
provide the information to the faculty members and ask them to choose.
In order for the airline
to be able to provide us with reliable, accurate rates, we give provide them
with a departure date (usually the day after school ends) and the arrival date
(the day before faculty are due back). This really helps us pinpoint a dollar
amount if our staff opts to receive the funds in lieu of a ticket. We
know what to give them and they’re free to use another airline and pay the
difference if they so choose.
As per the Benefits
document, Economy airfare from Home of record to the host city at commencement
of contract is payable for the Employee, spouse and two dependent
children. The process I normally follow is I gather information from the
new hires on their proposed dates of travel and create itineraries locally
and get the best rates available in Chennai. I send the new staff the
itineraries and let them know the cost at which the same can be purchased
here. I also ask them if they can get better deals from their end.
Depending on the costs, we arrive at a decision to either issue the tickets
from chennai or they purchase it there and the
amounts are transferred to their Bank Account.
Our airfares are
increasing as they have reduced the number of flights to the
Our school pays a full
fare economy round trip ticket to the employee and his/her dependents at the
end of a two-year contract for teachers who sign up for another year or
two. I get 3 quotations from travel
agents and choose the fares that are most competitive. Teachers may take the air fare in cash at the
end of a two year period. In the middle
of a two year contract, teachers may ask for an advance of their air fare. This advance is based on 50% of the approved
estimated air fare and it is paid to a teacher after he/she returns to ISK in
August. Upon their return, they must
present their tickets, and proof of travel:
booking card or luggage stubs.
The second year, the advance is deducted from any air fare
entitlement. I have copied the relevant
policy for your review:
A. Airfare
Round Trip Airfare
When a teacher is hired
and awarded his/her initial two-year contract, he/she is entitled to airfare by
the least expensive route from his/her designated home city to
If the teacher is
awarded a second two-year contract, he/she is immediately eligible, and again
for each subsequent two-year contract to an excursion round trip airfare to the
designated home city for himself/herself, spouse, and dependent children. ISK
will provide the teacher his/her entitlement which is the cost of the excursion
ticket as of May 1 of the second year of the contract in effect. Travel
benefits will normally be paid at the end of a teacher’s 2nd, 4th, 6th, 8th,
etc. year. The value of half an excursion ticket to the designated home city
may be provided to the teacher in the middle of his/her two-year contract. In
this event, no cash payment will be provided as the benefit has not been
earned. ISK will reimburse the teacher upon presentation of the ticket(s) and
boarding pass stub(s). If this advance payment is provided, the amount paid
will be deducted from the entitlement or airfare due on May 1 of the final year
of the contract in effect, If there is a change in
contract status, the advance will have to be repaid to the school.
If at the end of a
two-year contract, a teacher signs a one-year contract, a least expensive
ticket will be provided to the teacher’s home of record at the end of that
contract if the employee has resigned from ISK. In the event a teacher signs a
subsequent one-year contract the normal rules of a two-year contract will
apply.
Cash payments can be
requested in lieu of tickets upon completion of a two-year contract. All
payments or reimbursements will be based on the lowest estimate received by the
school from (3) three air lines or reputable travel agencies based on fares of
North American or European carriers. The teacher may postpone the use of
tickets earned at the end of a two-year contract for one year. The cash value
of the tickets provided one year later will be the same as the year for which
the tickets were earned.
We actually provide
tickets or the equivalent of the cost of a ticket to a teacher's home of
record. We do NOT tie it to IATA, but
rather provide a discounted ticket on which the teacher is able to make changes
during the summer holiday without cost.
It's certainly not the cheapest ticket around, but MUCH cheaper than the
IATA rate. Teachers seem happy with the benefit, and we save some.
In
The problem of air
travel always poses a problem and it hasn't changed for 30 years. Most employees try to get the best deal and
most don't want the school involved to any extent. What we did in our school was the following
and it worked very well for all concerned:
1) Made a list of each staff members
entitlement, i.e. city - home of record (per contract) – to the school
location. We sent the list out to travel
agents and had them bid on each set of tickets.
Each bid summary included the specific contract language, "...most
direct flight....", etc.
2) We set a deadline for travel agents to return
the bids which allowed the business office sufficient time to calculate the
fares.
3) We took the three lowest fares submitted and
averaged them out. The average became
the allowance for each staff member.
Checks were issued for this amount and they could then negotiate with
any airline/travel agent they wanted to.
We use the term
"market rate" which means no fly by night planes but anything else
that is reasonable. We have faced scams by teachers using the term
"IATA".
We use as our
fare basis IATA economy rates (one way)
In the contract we state
the lease expensive ticket via the most direct routing & avoid the terms
economy or excursion.
We pay for economy fares
based on summer rates using the most direct route. Practice here has been to
allow teachers to take this allotment based on the summer fair and if they can
find a cheaper one then can keep the difference and put it towards a completely
different flight. I am looking to end
this practice after next year.
We have the same rule,
so we get three bids from reputable school approved travel agents and then we
use the best rate for what we will give the teachers. Since many will not
travel to home of record we do not insist on actual travel to home of record
but instead simply give them the cost of the lowest cost estimate and let them
spend the money any way they want.
At our school we get
quotes from 3 travel agencies to the point of hire. We guarantee these prices
for 3 weeks with the travel agency that quotes the lowest. If the individual
contacts the agency within the 3 weeks and the price has changed, we pay the
difference after checking to see what the other 2 agencies had quoted. If the
person goes to get the ticket after the 3 weeks, they are responsible for the
increase.
We can't please everyone
- some faculty want us to get the quotes in late February so they can make
their plans; others want us to want until May to make the plans. We are doing
this in March in an effort to balance the two viewpoints and to try to take
advantage of lower fares.
We provide money for
return airfare to point of origin. Our
Business Manager gets two quotes and the teachers then receive a check. The quote is for a 60 day fare.
We removed the school
from the travel agent business by no longer giving tickets to the teachers.
We get three price
quotes (including internet) and then establish a price and teachers can take the
ticket or take the money.
We send a list of the
cities we send faculty to and ask travel agencies to give us their best price
as of 15 June. The faculty then choose to have us make
the flights or take the cash. I got away from IATA because my interest is
getting the teachers back/forth at the least cost to me. This has worked well.
We quit using IATA full
fair rates a long time ago: too expensive, given the discount tickets available
in many posts. In Abu Dhabi and Hanoi,
we selected five reputable airlines used by most expats,
got quotes for each from our travel agent to the home-of-record destinations
for our teachers, computed an average .
. . and gave that amount in cash to the teachers, who were then free to choose
whatever airline and whatever routing they wanted.
We get three quotes from
trusted agents and then give the lowest of those amounts, which gets people
hither and yon by "the most efficient route possible." We specify that there can be no more than so
many stops en route to protect teachers from going home via 12 countries!
Dear
Colleagues -
The
research was helpful with our faculty representatives. Those schools
who offer this type of benefit need to realize that the airline
industry
is changing quickly due to technology. We will work with our current
system with getting competitive quotes but it seems long term the school
will need to set a fixed sum and just get out of the airline ticket
business.
April 1st is a key date in
determining summer rates for air fares. Thanks
to all who shared their insights.
Keep writing to David Tully - shower
him with simple things to make him feel connected with his
international colleagues.
Regards
- Michael Popinchalk - AIS/Dhaka
Date: Wed, 23 Mar 2005
22:27:33 +0600
Subject: Results of Air
Fare Benefits
From:
"Michael Popinchalk"
<mpopinchalk@ais-dhaka.net>