While COVID-19’s decimation of domestic travel has forced airlines to dramatically cut fares to lure commercial passengers, college athletic departments have not seen this trend substantially bring down their costs of chartering athletes to away games.
The lack of reaction to the changing economics of the industry by some airlines is puzzling, because economically speaking, a gross excess of supply over demand almost always leads to lower prices. A Sportico review of financial documents and interviews with representatives of a dozen FBS schools, however, found that the pandemic’s discounting effect didn’t universally translate to college football charter contracts, despite factors that would seemingly have incentivized carriers to make deals.
The commercial-sized jets (like a mid-size 737 aircraft) that transport football teams, and the pilots to fly them, were widely available with the limited commercial travel occurring across the country. Fuel prices were low, as demand dropped by as much as 80% during the pandemic, according to airline analyst Bob Mann.
There also would have been an incentive to keep planes flying to avoid the cost of storing them, explained Adam Steiger, president of intermediary travel firm Air Charter Advisors. “To have planes sitting around,” Steiger said, “that costs a ton of money.”
There was even a CARES Act provision for the 2020 calendar year that suspended the 7.5% aviation excise tax usually tacked onto charter flight bills.
Yet only three of the 12 schools contacted for this story saw any sort of price adjustment to their charter flights for the 2020 football season. The majority of programs said prices for planes had largely been stable since before the novel coronavirus upended college sports last spring.
Some were hesitant to renegotiate during the pandemic, due to previous scarcity in the industry, and prioritized keeping their preferred partners over some potential savings. United Airlines, JetBlue, Delta, American and Frontier have all scaled back on private chartering of commercial-sized planes in the last few years, which raised prices for athletic departments as demand outpaced supply. COVID should’ve seemingly flipped that script, but it only did for a select few.
For example, Texas A&M, the western-most member of the SEC, saved an average of $25,000 per flight over three of the same trips last fall compared to 2018. Jeff Toole, the Aggies’ CFO, said he was unaware of the lower prices until they were brought to his attention.
West Virginia, which is 850 miles from its closest Big 12 rival, ended up spending $812,000 to charter its football team in 2020—$124,000 less than it was initially quoted pre-pandemic. United reduced its rates by $54,000, and around $70,000 in savings was recouped from the CARES Act tax break.
The Aggies also fly United.
“In football, if you’ve got United as a partner still, you lose all your bargaining power because the word on the street is to hang on tight to them,” said West Virginia athletics CFO Simon Dover. However, after the COVID-19 outbreak, Dover said he reached out to United and renegotiated a more favorable deal. Nevada, which flew with three different airlines last fall, also saw reductions in flight costs—a November trip to Hawaii ringing in at $100,000 less than its last trip there in 2016.
Nebraska said its $175,000 average cost per charter flight “didn’t change dramatically,” according to athletics CFO John Jentz, though they did at least see several thousand dollars in COVID tax savings.
Colorado, in entering the last year of a five-year agreement with the airline for football, saw a similar decrease in the federal excise taxes collected. “What we agreed to upfront as far as the negotiated rate based on the fuel and the plane size, all that was relatively flat, but we saw a decrease in the tax component,” said Cory Hilliard, the Buffaloes senior associate athletics director for business operations. “I had actually not seen that part of the CARES Act until our partners brought it to our attention early on, so we were pleasantly surprised.”
On the other hand, Illinois’s athletic director of football operations Tim Knox said he was “not aware of [CARES Act tax] savings if they did occur,” and he wasn’t alone. Nevada’s Assistant AD Matt Smith said, “There was no information provided regarding the CARES Act or what impact, if any, it would have on our pricing,” in any discussions about charter scheduling.
Some ultimately saw no changes at all. Illinois and UNC Charlotte, both of whom fly with Allegiant, paid standard prices comparable to 2019. Texas State, which paid Sun Country an average of $100,000 per flight last season to take its team throughout the geographically widespread Sun Belt conference, said the same.
None of the airlines Sportico contacted for this story responded to requests for comment.
“Depending upon what [a school’s] baseline prices were, if they already had a smokin’ hot deal, the likelihood is that they’re not going to get much better than that,” said Mann, the airline analyst. “But for those who didn’t, I really would have a tough time explaining why there was not much downward movement [in pricing].”
Not all schools negotiate their deals directly with their airline partners, with many using third-party companies to handle their charter contracting.
Jim O’Connor, senior vice president of Anthony Travel, which handles travel arrangements for numerous athletic departments including Illinois, wasn’t as quick to connect reduced commercial travel to a greater number of available planes for athletic departments. When an airline parks an airplane, as they did more frequently last year, it’s not as easy to get it back in action as a parked car, O’Connor said. “They’re parked in the middle of the desert. So although the actual commercial equipment, the planes, aren’t flying as much, it doesn’t mean that all those planes are available.”
Mann chalks it up to making money as the rest of the airline business tanked. “If airlines thought they could extract a little bit of margin here and there, they will of course try to do it,” he said. “For scheduled service, they’re basically burning money every day they fly right now. They have to fly, though, because of these payroll support laws. If they’re going to do additional flying on the charter side, all they’re trying to do is not burn more money. If they could do that at normal prices last year, which it seems like most got, they make a little money.”
While not all schools shared in their pricing experiences, most experienced an added flexibility from their partners woven into their 2020 agreements—alongside stipulations about mask-wearing and appropriate COVID safety measures. Schedule changes were accommodated with fewer fines or fees, making cancellations less costly than a normal season.
“Airlines had planes parked all over the country this year, so supply or competition with commercial travel was not an issue,” Jentz added. “It will be interesting, though, to see if six months or a year, maybe even two years from now, if they significantly change their business approach because they are getting hit so hard. They’re just trying to keep breathing right now, but at some point, they’ll have to re-strategize for the long term.”
Not all of the athletics officials are optimistic that airline industry adjustments will benefit them. Illinois’s Knox doesn’t think carriers will come down in price. “Keep in mind,” he said, “they know we have to fly to the games, so we are kind of a captive audience.”