Bank of America Will Restrict Travel Reimbursements

Bank of America Corp. is adopting a corporate travel policy Feb. 1 that will reimburse employees only for the lowest airfare available, according to Bridge News reports. The new policy will require executives who choose to travel on higher-priced airlines to pay the difference in fares.

The bank's decision to require employees to seek the lowest airfare may be part of an industry trend, some travel consultants predict. "The unwritten rule has always been, 'Thou shalt take the lowest fare,' said travel consultant John Heilner, vice president of Management Alternatives in Princeton, N.J. However, in practice that isn't always what happens.

"What's less common is policies in which employees truly make up the difference," Heilner said. Now, a growing number of companies are forcing employees to pay the difference between the lowest fare available and the one selected, he said, though he could not immediately identify other major companies adopting such policies.

While Bank of America said its new policy is designed to help control expenses, Bridge News said bank employees are complaining that the new policy is hurting morale amid thousands of layoffs and other cost-cutting efforts.

Since August, the bank's corporate travel agents have provided improved monthly travel reports to help management cut travel costs. But too many employees, especially mid- to high-level executives and investment bankers, were opting for higher priced tickets to avoid a carrier they did not like or to travel on an airline that allowed them to easily upgrade based on their membership in high-status frequent flyer programs, employees told Bridge News.

To clamp down on such costs, the bank's travel department on Dec 1 started printing the lowest available "contracted carrier fare" on the travel itinerary and passenger receipt.

"Given this additional information, I am confident that you and your teammates will do the right thing and take the lowest available fare by ignoring frequent flyer programs and upgrade opportunities," executive Marc Oken wrote in a memo to senior management and obtained by Bridge News.

"This additional information will allow the company to limit airfare reimbursement to the lowest available airfare on a contracted carrier—US Airways, United Airlines, Delta Airlines and TWA," Oken wrote.

The policy is stirring up a lot of hostility in Texas, where Bank of America is the largest bank and American Airlines the dominant carrier, employees said.

"At the time of booking, corporate travel agents will inform associates of the lowest available fare and that the fare will be the maximum reimbursable amount," Oken wrote.

The new policy isn't going over well, Bridge News reported. "This policy might make sense to the accountants, but not from a morale perspective," a bank employee said. "To save a few million dollars the bank is ticking off the executives and investment bankers that they're relying on to make this merger work."

Bank of America said it hopes that making the best use of resources will contribute to a stronger share price, thus benefiting employees participating in a companywide stock option program. "We're hoping that creating shareholder value will help employee morale," said bank spokeswoman Melba Spencer.

SOURCE: Bridge Information Systems, Inc. via NewsEdge Corp.