🇦🇺Australia

Suboptimal Fare Selection in Official Travel

2 verified sources

Definition

The ANAO audit of the Department of Industry, Science and Resources (DISR) identified that while 98% of flights technically complied with the lowest practical fare policy, only 27% of reviewed trips actually selected the lowest (cheapest) available fare. This gap indicates either manual booking inefficiencies or policy loopholes. At DISR's FY2024-25 spend of AUD 13.1 million across 2,097 domestic travelers, a 2–5% fare differential due to non-optimal selection represents significant leakage.

Key Findings

  • Financial Impact: AUD 260,000–655,000 annually (estimated 2–5% of AUD 13.1m DISR travel spend); extrapolated to AUD 953m WoAG Arrangements annual spend: AUD 19–48 million sector-wide
  • Frequency: Recurring on every flight booking (73% of trips)
  • Root Cause: Manual travel booking processes; lack of real-time lowest-fare enforcement; policy compliance monitoring focused on procedural adherence rather than cost optimization outcomes

Why This Matters

The Pitch: Australian government agencies and regulated organizations waste AUD 260,000–655,000 annually on unnecessarily expensive airfares due to manual travel booking processes and weak fare optimization controls. Automated lowest-fare enforcement eliminates this systematic overspend.

Affected Stakeholders

Travel managers, Booking administrators, Finance/accounts payable teams

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Travel Approval Documentation Failures and Audit Risk

AUD 50,000–150,000 per audit cycle (estimated remediation, retraining, process redesign costs); potential audit qualification could affect Commonwealth funding allocation or procurement tenders

Non-Compliance Tracking and Categorization Failures

AUD 100,000–250,000 per agency annually (estimated staff hours for reactive audit remediation, governance meetings, and corrective action implementation); sector-wide across WoAG entities: AUD 20–50 million annually

BSP Reporting Non-Compliance Fines

AUD 10,000+ in potential airline claims per default; annual financial audits cost 20-50 hours

Remittance Holding Capacity Limits

2-5% lost sales revenue; AUD 50,000+ opportunity cost per period

Tourism Revenue Leakage - Export & Import Bleeding

90% of tourism booking revenues leak out; equivalent to AUD 95 loss per AUD 100 in bookings for developing country destinations. For Australian domestic/regional tourism: up to 90% leakage to international companies.

Tourist Refund Scheme GST Evasion Risk

AUD 500 million total government loss; per-firm exposure depends on TRS transaction volume and audit risk (estimated AUD 50,000–500,000 per medium-sized travel firm if non-compliance detected).

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