Last Revised: October 1, 2019
Responsible Office: Office for Sponsored Programs
Lowest Economy Class Airfare
Airfare other than lowest economy class (e.g., business or economy upgrade) is not allowable on Federally-Sponsored Funds or cost share companion accounts unless an exception is met, documented, and approved.
Harvard defines lowest economy class airfare (sometimes called coach, standard economy fare class or base airfare) to include a reserved seat, one personal item, one carry-on bag, and one checked bag. These expenses would be considered allowable on federal funds. A refundable ticket may be appropriate in situations where there is a high likelihood that the itinerary may change or other extenuating circumstances. Travelers must include the business reason for purchasing a refundable ticket in the business purpose section of the reimbursement request.
Federal regulations (2 CFR §200.474.3(d)) require that airfare costs in excess of the lowest economy fare class are unallowable except when the latter would:
- Require circuitous routing;
- Require travel during unreasonable hours;
- Excessively prolong travel;
- Result in additional costs that would offset the transportation savings; or
- Offer accommodations not reasonably adequate for the traveler's medical needs.
Exceptions for business-class or upgraded economy airfare must meet one of these criteria and be justified and documented to be allowable on a federal award. These exceptions require documentation and approval by a designated school official via the Federal Lowest Economy Airfare Travel Reimbursement Exception Form.
Where funds and budget allow, the Travel Policy may allow business or upgraded economy travel for certain flights (local policies may be more restrictive); however, the difference in fare between the lowest economy airfare and the business class fare cannot be charged to federal or federal cost share funds and must be charged to a non-sponsored account. Please utilize the Lowest Economy Airfare Split Coding Job Aid to assist you in allocating the cost between federal and non-federal accounts.
Authorized Approvers for the Federal Lowest Economy Airfare Travel Reimbursement Exception Form
- HMS – Rita Bergemann
- SPH – Kristie Froman or Judy Lo
- FAS – Jennifer Lech
- SEAS – Pamela Baker-Webber
- GSE – Jane Eaton
- HKS – Carrie Kachoria
- HLS – Devin Advani
Fly America Act Overview
The Fly America Act is a federal regulation that states that any foreign air travel that is financed by federal funds must be booked on U.S. flag air carriers, regardless of cost or convenience when compared to foreign air carriers. This regulation must be followed by all Harvard and non-Harvard personnel, students, trainees, consultants and collaborators who are reimbursed for air travel using Harvard federally-funded sponsored awards and federal cost share companion accounts.
It is the Principal Investigator’s (PI) or PI designee’s responsibility to ensure that all air travel charged to Harvard federally-funded sponsored awards is in compliance with this regulation. Harvard requires travelers who will be reimbursed from federal awards to use a U.S. flag air carrier, consistent with the Fly America Act. Long-term exceptions to the Fly America Act include:
- When the use of U.S. flag air carrier service would extend travel time (including delay at origin) by 24 hours or more;
- When the costs of transportation are reimbursed in full by a third party, such as a foreign government or an international agency; or
- When U.S. flag air carriers do not offer nonstop or direct service between origin and destination.
However, a U.S. flag air carrier must be used on every portion of the route where it provides service unless, when compared to using a foreign air carrier, such use would:
- Increase the number of aircraft changes outside the United States by two or more;
- Extend travel time by at least six hours or more; or
- Require a connecting time of four hours or more at an overseas interchange point.
Exceptions to the Fly America Act must meet one of the exception criteria and be justified and documented to be allowable on a federal award. These exceptions require submission of the Fly America Travel Reimbursement Exception Form, approval by an authorized reimbursement approver at a department/local level managing unit or by a designated school/tub official in accordance with school/tub’s policy, and supporting documentation.
|School/Tub||Dept/Local Level Managing Units||School/Tub Level Officials|
|GSE||Sr. Director of Financial Administration and Planning (Jane Eaton)|
|HKS||Director, Research Administration Office (Carrie Kachoria)|
|HLS||Controller (Devin Advani)|
An additional exception to Fly America occurs when an Open Skies Agreement is in place between the United States (U.S.) government and the government of a foreign country. There are currently four Open Skies agreements - with the European Union, Australia, Switzerland and Japan. It should be noted that there are limitations to the use of non-US carriers under an Open Skies agreement. Notably, the current Open Skies agreements do not apply to Department of Defense-supported activities and there is a prohibition against non-US carriers if a city pair contract exists. For more information on Open Skies please refer to our Open Skies Document.
Please note that code-sharing agreements with foreign air carriers, whereby U.S. flag air carriers purchase or have the right to sell a block of tickets on a foreign carrier, comply with the Fly America Act. The ticket, or documentation for an electronic ticket, must identify the U.S. carrier's designator code and flight number. However, some funding sources may not recognize code-sharing as being compliant with Fly America Act. When the specific funding source policy is more restrictive than the Fly America Act, the more restrictive policy applies. Please view code-share examples of situations that are in compliance and not in compliance with the Fly America Act.
Related Policies and Guidelines
- Travel FAQs
- Harvard University Travel Policy
- Sponsored Expenditures Guidelines
- Travel and Expense Reporting
- Responsibilities of Purchasers, Preparers and Approvers
- General Services Administration (GSA) website on Federal Travel Regulations
- Harvard Federal Travel Regulations online course
- Harvard Travel and Reimbursement Overview online course
- Fly America – Open Skies Decision Tree
- Lowest Economy Airfare Split Coding Job Aid
- Federal Travel Policy Update brochure (Dec 2016)
- Open Skies Document
- Federal Travel Exception Forms:
- Air Travel Guidelines at a Glance
- Flight Checklist when using Federal or Cost Share Funds
- Christyne Anderson, Manager, Training & Compliance, Office for Sponsored Programs
- Min Xiao, Compliance, Outreach, and Cash Manager, Office for Sponsored Programs
- Stacey Clifton, Strategic Sourcing Manager, Office of Procurement
1. My PI has funding from both federal and non-federal sponsors. Are there rules relating to travel costs charged to federal awards that are different than those for non-federal awards?
Yes. Any travel costs charged to federal awards must comply with federal regulations, including the requirement to book the lowest economy airfare and comply with the Fly America Act. When traveling on non-federal awards, unless it is specifically prohibited in the terms and conditions of the award agreement, travelers may purchase business class airfare provided it is in accordance with the University Travel Policy.
2. May travelers book business class rail fare or must a traveler book the lowest economy class fare available?
Rail travel is expected to be at the lowest fare that offers reserved seating. In some cases, this may be designated as business class or first-class and is considered allowable on federal funds. See Harvard’s Amtrak website.
3. Is using a private (non-luxury) sedan service for transportation pickup allowed on sponsored funds?
Travelers are expected to use the most economical mode of transportation appropriate for their needs. See Harvard Travel Policy Appendix B for detailed guidance.
4. Are no-cost or free upgrades allowable?
Yes. Please be sure that the documentation clearly states that the traveler was only charged the lowest economy fare. See Appendix A, Section 2 of the Harvard Travel Policy for guidance.
5. Can change fees, cancellation fees or trip cancellation insurance be charged to sponsored funds?
Change fees, cancellation fees or trip cancellation insurance may be an allowable expense under extenuating circumstances provided there is a compelling and valid reason such as a canceled conference or medical emergency; as referenced in the Appendix A, Section 2 of the Harvard Travel Policy. Authorized approvers must ensure any change or cancellation fees charged to sponsored funds are allowable and follow local policies. Generally, cancellation insurance requires preapproval (this is often an exceptions request through the Financial Dean or designee) and include the insurance with the travel reimbursement. See Appendix A, Section 2 of the Harvard Travel Policy.
6. What information is required for reimbursement?
Harvard follows the accountable plan rules which requires the expense be business-related, substantiated with receipts and a business purpose, submitted timely, and cannot exceed actual expenses.
Federal awards require an itemized receipt in order to attest that all costs charged are allowable. For example, alcohol may not be charged to any federal award. An itemized receipt for a meal can serve as evidence that no alcohol was charged.
If an itemized receipt is not available for meal expenses, reimbursees must attest as to whether alcohol was purchased or not. If the traveler consumed alcohol with a meal but does not have an itemized receipt, the traveler must be able to estimate the amount of money spent on alcohol. The estimated amount, plus estimated tax and tip, must be deducted from allowable meal costs if charged to federal funds. Tax and tip for alcohol can be estimated at 22% (including an average 7% meal and beverage tax and 15% tip).
See Definition of Receipts for additional guidance.
7. Can a traveler still request reimbursement using per diems?
Depending on school/tub policy, travelers can choose to request per diems for meals, hotel and incidentals in lieu of actual receipts. The Department of State (DOS) per diem rates should be used for international travel, and the General Services Administration (GSA) per diem rates for domestic travel. Additionally, the GSA states that if your trip includes meals that are already paid for by the government (such as through a registration fee for a conference), you will need to deduct those meals from your reimbursement request.
Air Travel Requirements When Using Federal or Cost Share Funds
8. Is Harvard subject to the Federal Travel Regulations (FTRs)?
No, Harvard is not subject to the FTRs.
9. What is the Fly America Act and what qualifies as a U.S. flag air carrier?
The Fly America Act states that when using federal funds you must use U.S. flag air carriers or flights operated under a U.S. code share agreement to travel to any destination, including international destinations, regardless of the cost comparison with a foreign air carrier. It is recommended you book your travel directly through the U.S. flag air carrier or use a Harvard preferred travel vendor and inform them you are using federal funds.
10. Are there any exceptions to the Fly America Act?
You must use a U.S. flag air carrier for all legs of your route where a U.S. flag air carrier is an option. If a U.S. flag air carrier does not travel to your final destination or does not provide service on a portion of your route, you may use a foreign air carrier only on the leg(s) for which U.S. service is unavailable.
An additional exception to Fly America Act may be the Open Skies Agreement is in place.
These exceptions, along with few others, must be documented and approved within the submitted Fly America Travel Reimbursement Exception Form (FATREF) in order to be considered for reimbursement on a federal award.
11. My PI has a conference in Paris, and then they must travel to London for a collaborator meeting at a subrecipient institution. The flights between Paris and London were booked on British Airways. Can this be reimbursed on a federal award?
It depends. This flight could possibly be reimbursed by a federal award if it was booked on an EU or U.S. flag air carrier under the Open Skies exception, unless you are using Department of Defense (DoD) funds. If you are using DoD funds, then this flight would not be eligible for reimbursement unless it met one of the other Fly America Act Exceptions per the Fly America Travel Reimbursement Exception Form (FATREF).
12. What does “circuitous routing” mean in relation to travel on federal awards?
Generally, circuitous routing involves flight options with multiple stops and/or stops at airports that significantly increase the travel time. A general rule is that two or more stops, or an increase in travel time of four hours, may be considered circuitous. Utilizing this exemption to allow for economy upgrade or business class travel on a federal award requires that the lowest economy class fare is not available for the shorter route. The Fly America Act still applies.
In order to charge the expenses to federal or cost share funds, the traveler must:
- Submit comparable flight documentation that identifies the date of the comparison of the itinerary, as well as the airline, flight number, date, time, fare class and price for the economy ticket, and fare class and price for the ticket purchased.
- Submit a completed Federal Lowest Economy Airfare Travel Reimbursement Exception Form. The form must be signed by a school/tub authorized approver/official prior to submitting the travel reimbursement request in Concur or Buy-to-Pay.
13. What is required for a medical exception?
A completed Federal Lowest Economy Airfare Travel Reimbursement Exception Form is required. The form must be signed by a school/tub authorized approver/official prior to submitting the travel reimbursement request in Concur or Buy-to-Pay. A copy of the medical accommodation may be required by the school/tub authorized approver. Please consult with your school/tub HR office and/or Finance office for local procedures.
14. What details should be included in comparable flight documentation for economy versus economy plus or business flight information?
The comparable flight documentation should identify the date of the comparison of the itinerary, as well as the airline, flight number, date, time, fare class and price for the economy ticket, and fare class and price for the ticket purchased. If the incremental cost of the upgrade is clearly itemized on the purchase receipt, an additional comparison is not required.
- The comparable flight documentations must be submitted with the completed Federal Lowest Economy Airfare Travel Reimbursement Exception Form to a school/tub authorized approver/official for approval prior to submitting the travel reimbursement request in Concur or Buy-to-Pay.
- If the comparable flight documentation for economy versus economy plus or business is not obtained within 1 business day of booking, the entire fare must be charged to a non-sponsored account.
If you are booking a flight with more stops or a longer duration than required for the business trip due to personal travel, then you should provide the same documentation listed above a comparable itinerary (including price, dates, and air class) based on the business portion of the travel. The comparison must be obtained within one business day of booking. Only the allocable business portion of the travel may be charged to the appropriate Harvard fund(s). See Appendix E of the Travel Policy for additional guidance.
15. Can I purchase an “Economy Plus” airfare ticket if it is less expensive than the recommended Lowest Economy Class airfare option?
Yes, provided it is with the same airline and you obtain the required supporting documentation (see FAQ #14) within 1 business day of booking.
16. If my school’s authorized official determines that the airfare does not meet the exception criteria and does not approve my request, can I charge the lowest economy fare class amount to the federal award and charge the difference to a non-sponsored account?
Yes, but only if you obtain the comparable flight documentation for the economy rate versus the economy plus or business rate within 1 business day of booking and submit the documentation with the travel reimbursement request. If the incremental cost of the upgrade is clearly itemized on the purchase receipt, an additional comparison is not required.
17. Can we charge the federally unallowable portion of business class to a cost share companion account?
No, you should not charge the federally unallowable portion to a cost share companion account, since they follow the same sponsored award terms. These expenses must be charged to a non-sponsored account. Note that unallowable costs should never be charged to cost share companion account. You should charge the federally unallowable portion of a business class flight to a non-sponsored account using the appropriate airfare object code.