Official International Travel – Use of the best fare of the day (RMG 405)

Audience

This guide applies to officials of:

  • all non-corporate Commonwealth entities; and

  • corporate Commonwealth entities participating in the Whole of Australian Government (WoAG) Travel Arrangements.

Key points

This guide:

  • sets out requirements for achieving value for money when booking and approving official international travel

  • takes effect from 1 October 2016

  • replaces Resource Management Guide No. 405: Official International Air Travel – Use of the Best Fare of the Day (February 2015).

Resources

This guide is available on the Department of Finance website.

Frequently Asked Questions that support this guide are available at:

 

For any queries, please contact WoAG Travel at: woagtravel@finance.gov.au.

Other relevant publications include:

  • Resource Management Guide No. 404: Official Domestic Travel – Use of the lowest practical fare

  • Resource Management Guide No. 418: Payment terms for Australian Government Travel Arrangements – card services

  • Commonwealth Procurement Rules 2014.

Part 1 – Policy

  1. When undertaking official international travel, officials must select the International Best Fare (IBF), which is the lowest fare available on the day the travel is booked on a regular scheduled service (not a charter flight), that suits the practical business needs of the traveller and maximises overall value for money for the total cost of the trip.

Part 2 – Guidance

Key considerations

  1. Value for Money: Value for money is the overarching consideration when booking flights for international travel. Value for money requires the use of Commonwealth resources in an efficient, effective, economical and ethical manner that is not inconsistent with the policies of the Commonwealth, and is enhanced through competition.

Accordingly, when booking travel, officials must make decisions based on an impartial consideration of the fares available and not on a personal preference for a particular airline or aircraft type, access to airline lounges or accumulating airline reward and loyalty points (including status credits).

  1. Necessity of Travel: International travel must only be undertaken where other communication tools, such as teleconferencing and videoconferencing, are ineffective. In approving travel, the delegate (the official approving international air travel) must be satisfied that there is a demonstrated business need for the travel.

  2. Safety: Under no circumstances is this guide to be read as requiring officials to use airlines with a poor industry reputation for safety. Information on aviation safety and security is available from the Department of Foreign Affairs and Trade (DFAT) at their website: www.smartraveller.gov.au.

  3. Approval of the need to travel: Officials should refer to their entity’s internal controls (e.g., Accountable Authority Instructions) for the approval requirements that apply to international travel.

  4. Class of Travel: In booking flights for inbound and outbound international travel and travel within an international country, officials are required to select a business class or equivalent class or lower class airfare.

Applying the International Best Fare

  1. Value for Money: To maximise value for money for the cost of international air travel, officials are encouraged to consider:

    • in the IBF calculation:

      • the value of any baggage allowances, and complimentary inclusions such as chauffeur/coach drive services or pre-departure accommodation offered by airlines

      • any additional costs for accommodation, meals, ground transport, baggage and incidentals associated with the 24-hour window

      • the cost of lost employee wages associated with lost work time where appropriate.

    • for outbound flights, the cost of flights that leave within a 24-hour window before the latest possible departure flight (that is, the latest flight that will enable the traveller to meet their overseas commitments)

    • for inbound flights, the cost of flights that leave within a 24-hour window after the earliest practical return flight.

  1. The 24-hour window is not intended to restrict or limit the use of fares outside of this timeframe that may maximise value for money.

  2. Where entity controls allow for rest periods, these rest periods should be incorporated within the 24-hour window to the extent possible.

  3. To assist entity officials in internal reporting against use of the IBF, the Travel Management Company (TMC) contracted under the WoAG Travel Arrangements applies the 24-hour window to the booked flight time from the point of departure to monitor whether the international best fare has been selected. This reporting is available to entities through the TMC.

  4. TMC transaction fees: TMC transaction fees and WoAG administration fees are not to be included in the estimated cost of travel submitted for approval of the IBF calculation.

Booking considerations

  1. Airlines: A range of international airlines have been contracted under the WoAG Travel Arrangements (a list is at Attachment A). These airlines offer highly competitive fares, increased baggage allowances, reduced or removed fees for changes to fares, more flexible fare conditions, and some complimentary fare inclusions.

  2. Airfare quotes: Unless a limited number of airlines (i.e. one or two) service a particular route, officials are to obtain three quotes for airfares from at least two different airlines for the same or equivalent fare class. Officials are encouraged to use the contracted airlines on a value for money basis however, officials are not restricted to using these airlines.

  3. Booking strategies: Strategies that can be considered to optimise value for money in booking airfares include booking as far in advance as possible, being flexible with times, using less flexible tickets, and looking at different routes to the final destination. Officials are encouraged to advise the WoAG TMC of key business needs, e.g. direct routing or excess baggage requirements.

  4. Lounge memberships: Airline lounge membership is not to be considered in applying the IBF.

  5. Accommodation: Officials are encouraged to book any accommodation associated with international travel through the WoAG TMC using the Diners Club payment facility, (the virtual account and/or the in-hand Diners card or MasterCard). The most cost effective accommodation is to be selected i.e. a room rather than a suite.

  6. Unused credits: Where travel is not taken and unused credits exist, officials must consider selecting the IBF for any subsequent bookings and then apply any unused credits to reduce the fare price.

  7. Reward and loyalty points (including status credits): Implementation of the WoAG Travel Arrangements on 1 July 2010 ceased the accrual of reward and loyalty points (such as frequent flyer points) and this requirement continues. However, status credits may still be accrued. Where officials have retained previously accrued reward and loyalty points, these are to be used to reduce the cost of future flights required for official travel. It is Government policy that such points, where awarded for official travel, are not to be used for private purposes or to upgrade the class of official air travel.

  8. Personal Travel: The WoAG Travel Arrangements must not be used for stand-alone personal or leisure travel. Where personal or leisure travel is attached to official travel, officials are to refer to their entity’s internal controls (e.g., Accountable Authority Instructions) for the requirements that apply.

International travel considerations

  1. Health and safety: Where considered necessary, officials are encouraged to seek personal medical advice before undertaking international travel. Vaccinations may be necessary for some destinations. Officials are encouraged to also familiarise themselves with any internal entity policies regarding health and safety while on official business. Further advice on health and safety, including country specific advice, is available from DFAT at their website: www.smartraveller.gov.au. Officials are advised to also refer to the travel cover policy in the Comcover Statement of Cover available at: 

  2. Through’ fares: Officials are encouraged to book ‘through’ fares rather than separate domestic and international tickets (e.g. a Canberra to London ticket rather than a Canberra to Sydney ticket and a separate Sydney to London ticket). Selecting ‘through’ fares allows baggage to be checked through to the final destination, provides the TMC and relevant airlines with oversight of connections for the entire trip, and generally results in better value for money outcomes.

  3. Register the trip: Prior to leaving Australia, officials are encouraged to register the details of their official international travel with DFAT at: www.smartraveller.gov.au.

Booking Codes

  1. When booking official international air travel, officials must identify the reason a fare is selected using the IBF Booking Codes at Table 1 – The IBF Booking Codes.

  2. IBF Booking Codes 1 to 6 are compliant with the IBF policy.

Monitoring compliance

  1. Officials are responsible for managing compliance with the IBF policy in accordance with their entities' internal processes. Please see Attachment B for examples of using the IBF.

Table 1 – The IBF Booking Codes

No

Booking Code

Map to LPF guidance

1

Lowest fare

This is the cheapest available fare taking into account the 24 Hour booking window.

2

Timing, routing, connections, baggage allowances, value-adds, or baggage charges

Where the fare selected is not the lowest fare because it:

  • is the most direct route

  • ensures connections for further flights are met

  • includes baggage allowances or value-adds offered by WoAG contracted airlines

  • takes into account excess baggage fees.

3

Approval / Entitlement to travel at higher fare class

All air travel is to be at the international best fare in the appropriate class (having regard to internal travel policy) unless there is a business case or entitlement to travel outside these guidelines.

In these circumstances, officials are still required to obtain the international best fare within the entitlement.

4

Health issues

Health issues for officials requiring certain facilities. A medical certificate is required to support use of this code.

5

Personal responsibilities

Impact on personal responsibilities such as family.

6

Require flexibility to change booking

Where flexibility is required for air travel, travel bookers must consider selecting a semi-flexible fare type instead of a fully flexible fare.

7

Outside of IBF policy

Preference for particular aircraft or airlines, availability of access to airline lounges, accumulation of airline benefits such as reward or loyalty points (including status credits).

Attachment A

WoAG Travel Arrangements: contracted Airlines

Air New Zealand

Garuda Indonesia

Air Niugini

LATAM Airlines

British Airways

Qantas Airways (including Jetstar)

Cathay Pacific Airways

Qatar Airways

China Eastern Airlines

Regional Express

Emirates

Royal Brunei Airlines

Etihad Airways

Singapore Airlines

Fiji Airways

Thai Airways

Finnair

Virgin Australia

Attachment B

Choosing the International Best Fare:

Below are four examples of how to choose the International Best Fare (IBF).

It is mandatory that an IBF Booking Code be provided at the time of booking official international air travel (refer to paragraph 23 above).

Please note: Booking Codes 1 to 6 are for fares compliant with the IBF. Booking Code 7 is for fares outside the IBF. 

Example 1 - Lowest fare

An official is travelling from City A in Australia to City B overseas.

Three quotes have been obtained with different airlines for the same or equivalent fare class and fare type and similar total travel time.

Airline A is selected because the fare is the lowest fare. The official therefore uses Booking
Code 1.

Quote

Airline

City Pairing

Total Travel Time

Price

Fare Selected

Booking Code

1)

Airline A

City A – City B

20 hours

$8,000

1

2)

Airline B

City A – City B

19 hours

$9,500

 

 

3)

Airline C

City A – City B

21 hours

$9,000

 

 

Example 2 - Timing

An official is travelling from City C in Australia to City F overseas. Three quotes have been obtained from the TMC with different airlines for the same or equivalent fare class and fare type and similar total travel time.

Airline B is selected because the fare is the most direct route to City F and the lowest fare that meets the practical business needs of the official. The official therefore uses Booking Code 2.

Note: In this example, potential missed savings of $500 would be reported by the TMC to reflect the difference between the lowest fare available and the fare selected.

Quote

Airline

City Pairing

Total Travel Time

Price

Fare Selected

Booking Code

1)

Airline A

City C – City D - City F

30 hours

$9,500

 

 

2)

Airline B

City C – City F

25 hours

$10,000

2

3)

Airline C

City C – City E – City F

29 hours

$11,000

 

 

Example 3 – Value-adds

An official is travelling from City H in Australia to City I overseas. Three quotes have been obtained with different airlines for the same or equivalent fare class and fare type and similar total travel time.

Airline B includes a complimentary chauffeur drive service and is selected because the overall cost is the lowest. That is, taxi fares that would otherwise be required (home to airport and airport to hotel) have an estimated value of $250. When this value is taken into account with the airfare, the total cost is lower than the other quoted airfares that do not include a complimentary chauffeur drive service. The official therefore uses Booking Code 2.

Quote

Airline

City Pairing

Total Travel Time

Price

Fare Selected

Booking Code

1)

Airline A

City H – City I

19 hours

$9,900

 

 

2)

Airline B

City H – City I

20 hours

$10,000

(with free chauffeur drive)

2

3)

Airline C

City H – City I

21 hours

$10,500

 

 

Example 4 – Fare Outside the IBF

An official is travelling from City K in Australia to City L overseas. Three quotes have been obtained from the TMC with different airlines for the same or equivalent fare class and fare type and similar total travel time.

Airline C is selected because the official has a preference for Airline C regardless of whether the fare meets the official's practical business needs.

The fare selected is not compliant with the IBF. The official therefore uses Booking Code 7.

Quote

Airline

City Pairing

Total Travel Time

Price

Fare Selected

Booking Code

1)

Airline A

City K – City L

25 hours

$9,500

 

 

2)

Airline B

City K –City L

24 hours

$10,500

 

 

3)

Airline C

City K – City L

27 hours

$11,000

7

Note: In this example, potential missed savings of $1,500 would be reported by the TMC to reflect the difference between the lowest fare available and the fare selected.


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