Gov't fares drop after GSA awards 14 contracts

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WASHINGTON -- Federal employees traveling on official business from Boston to Washington National will be able to fly for $76 on Delta, beginning Oct. 1.

The rate is a substantial cut from the current government fare of $187 on US Airways. It also demonstrates how the General Services Administration took advantage of competitive bidding when it awarded contracts to 14 U.S. airlines to provide federal discount fares in 4,276 domestic and international city-pair markets for fiscal 2000.

The 12-month contracts are worth an estimated $951 million in virtually guaranteed business for the airlines.

Among other sample discounts, American will offer a $53 one-way fare from Chicago O'Hare to Washington National, the same price currently provided by United. The federal one-way rate between Los Angeles and Washington Dulles will remain $99 on United.

Federal fares do not require advance purchase or minimum or maximum stays. Tickets are fully refundable, without any penalty charge. There also are no blackouts and no capacity controls. As long as the carrier has a seat available in coach class, a government traveler can buy it at the contract discount.

The GSA said the average federal discount in all markets in fiscal 2000 will be 70% off the "full walk-up fare," saving the government about $2 billion. The discount is up two percentage points over the 68% during this fiscal year and matches the 70% in fiscal 1998.

Another 300 to 400 city-pair markets are expected to be awarded in a second batch of contracts, a GSA official told Travel Weekly.

The total number of routes for the upcoming fiscal year will be smaller than the more than 5,500 routes that are currently covered for two main reasons: Internationally, the GSA concentrated more on U.S. gateways and domestically, the government downsized or closed some military installations.

In the initial round of GSA awards, Delta again captured the largest number of routes, with 777 city pairs. But Delta dropped from first place to fourth place in terms of dollar volume of business, with an estimated $141.8 million.

US Airways, which vies with Delta for top rankings, regained first place for the largest volume of business at $205 million. US Airways won the second-largest number of routes with 772 city pairs.

As usual, the two other big players were United and American, with $193.3 million and $147.3 million, respectively. America West, previously a small player, bid aggressively and made a huge gain by winning 118 routes worth $16.6 million.

AirTran, which won 39 routes worth $8.3 million, will be the sole new carrier in the federal market in fiscal 2000. Reno Air dropped out of the pack because it was acquired by American.

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