Company paying for expensive flights - is there any precedent for re-allocating that money?

Question

I'm being relocated to a different country in a few weeks. As part of the package, the company pays for 4 roundtrip flights (travel time is around ~20 hours) in business class (so I can travel back and forth from home country). This amounts to about $30,000 USD.

I'm more than content flying economy and was wondering if there was any precedent for asking that money to be reallocated (the first thing that comes to mind is paying off my student loans :) )

Figure the answer is no for a variety of reasons, but wanted to pose the question.

Answer 1

There's no harm in asking, but you probably shouldn't be expecting them to allow you to take a cash alternative.

The chances are that they're paying for business class flights because they want you to be able to get off the plane at the other end in a fit state to start working and not because it's a luxury perk.

My suggestion is to make the most of it, because dealing with the jet lag/travel fatigue after a journey of that length is going to be grueling enough.

Answer 2

I am pretty sure that those 4 round trip flights would be considered a business expense. However, if your company paid off your student loans this would not be considered a business expense. There are tax implications.

Answer 3

There are reasons why your company might want their employees to fly business class instead economy class:

• They see a business value in ensuring that their employees are relaxed when they arrive at their destination, because they believe that it will help them to work better.
• It's a prestige thing. They want to show everyone that they care about their employees and that they can afford it, so they insist on having them fly business class.
• They might have a deal with the airline which gives them a bulk discount on business class flights, so they don't actually save any money by having you fly economy.

So you can offer to them to fly economy class, but they might have good reasons to deny the request.

Answer 4

precedent for asking that money to be reallocated

YES. I have heard of at least two companies that offer Business Class as an entitlement on long haul flight but will give the traveler a fixed amount bonus if they book into Economy. Meaning, Business -or- Economy + $1000.

The only thing OP needs to do is ask their Manager is such a deal exists. The bonus will likely be taxable.

Please, let's stop assuming OP is trying to scam the company. Also, it's likely the amount is notably less than $30k due to contracts, rebates etc.

If there's a company rule that says Flights > X get Business class, then that's just what happens. They understand the cost and are prepared for it.

Answer 5

1. The flights may have been pre-ordered and you're simply using them up. They're not paying any extra.

   Some businesses that require many frequent travel will order a block of tickets between their sites so it can be expensed ahead of time, so as to not fluctuate their monthly expenses. They're not going to give the money to you, but will simply use it another time.

2. They need you to work without any extra downtime.

   4 flights at $30,000 USD are long flights. After 20 hours in economy, I'll be surprised if you can even walk, nevermind working the next day. Just because you can handle economy, doesn't mean there will not be a cost. The business wants you to work for them after the flight with as little downtime as possible. If you're important enough to fly you there, your work must affect many people.

Answer 6

Usually the business will have set aside that amount for a reason. Buying business class flights is only done in my company when the employee is expected to fly long haul, and still be able to work the following day (so to minimise jetlag). With a 20 hour flight this is probably your case.

You can't lose much by asking to reallocate some of the money, but you are far more likely to be granted something like 8 flights instead of 4 when using economy, than something that doesn't benefit the business in any way. (And as mentioned by other answers, tax/business expenses etc will play into this)

In the past, I've been able to downgrade from business to economy in exchange for an extra conference later that year, not the same thing but shows that it can happen, especially when it benefits the company, & they don't lose any money.

Answer 7

I'm more than content flying economy and was wondering if there was any precedent for asking that money to be reallocated (the first thing that comes to mind is paying off my student loans :) )

There is precedent for this: operation slam dunk.

In 1994, the National Basketball Association employed 54 referees....The travel expenses for referees were to be reimbursed by the NBA once a travel report was submitted. The NBA paid for a first class airline ticket for flights lasting longer than two hours and a full fare coach seat on flights shorter than two hours. In turn, the referees were permitted to downgrade their first class tickets and pocket the cost difference. This was considered a fringe benefit of the position and a way to supplement their income. The NBA did not withhold taxes on this income or report it to the IRS and the referees did not declare this income on their tax returns considering it a fringe benefit provided by their employer.

In 1989, the IRS introduced new regulations that required an arrangement like the fringe benefits supported by the NBA to be reported as income. However, during the introduction of these new regulations, the NBA and the referees association were locked in a bargaining period over a new contract. During the negotiations the NBA changed the rules frequently which resulted in an unclear process on how to report the income causing many referees to continue the fringe benefits as they had in the past...

...In 1993 the IRS received a tip that the referees were not declaring the airline ticket money as income resulting in the IRS launching "Operation Slam Dunk." On September 12, 1994, the IRS announced its investigation and notified more than 50 referees that they were part of a criminal tax investigation.

In the end they had to pay back taxes, interest and penalties.

The point is that you can ask, but even if they say yes there will probably be tax implications for you. Many companies will not do this becasue of the additional paperwork on their end, and the need to determine what the true cost of the tickets would have been. They also don't want to make this the normal business practice.

Answer 8

You might consider asking for an economy class flight and a "relocation bonus" which would be a cash payout - the difference between the business and economy class ticket prices. You might couch the question something like this:

Hey boss, I've got some expenses that I'll have to deal with during the relocation. I greatly appreciate the offer of the business class tickets, but I'm willing to fly economy if I could get that extra money as a "relocation bonus". It won't end up costing the company any more money than they're planing on paying out anyway, and this way it will help me out a bit more.

By saying "during the relocation" you're not explicitly tying the money to the relocation itself, only things you'll be paying for while you're an ex-pat. Some may consider this splitting hairs, but you are not actually claiming it's a relocation expense. Whether you consider this a reasonable hair-split or not is up to you.

Of course, the cash payout to you would be recorded as income (as any employer paid bonus would be) and would have the tax implications tied to it that your regular salary would, as well.

Answer 9

I wouldn't ask because 1.) it's quite improbable (for reasons already said in other answers) and 2.) they might decide to fly you in economy class instead without giving you extra cash (already mentioned in a comment) and you really do not want to lose that privilege for 4 20 hour flights.

Answer 10

I'm more than content flying economy and was wondering if there was any precedent for asking that money to be reallocated

Contrary to other answers here, I'm going to say near enough an outright no.

They won't be able to give you a cash alternative for all manner of reasons (processes likely not in place for it, tax implications, additional admin time spent processing an odd request, etc.)

So the outcomes, realistically, of this scenario will be the following:

• Either you mention it, they say no, and nothing changes;
• ...or you mention it, they think "hey, this guy's happy to fly economy, that'll save us a few bucks", and you end up flying economy for a 20 hour flight with no additional compensation. Many companies have policies where you can volunteer to fly economy to save them money, and I suspect this is the camp you may unwittingly land in.

Needless to say, that means it's a question not worth asking in my book.

Answer 11

To answer specifically the question about whether there is precedent for reallocating the money: Yes! For example this company offers a service for employees to receive gift cards in exchange for choosing less expensive travel options, equivalent in value to about 50% of the costs saved. (Note: I am not affiliated with this company, I just happen to know people who have used their service.) Obviously gift cards are not quite as good as cash, but with careful planning you can probably take advantage of them to save on things you would have bought anyways, making them almost equivalent to cash. So what I would recommend is asking your company to look into starting a program like this -- it may actually save the company quite a bit of money in the long term!

Assuming your trip is coming up fairly soon though, you probably don't have time to actually implement this right now. Something to keep in mind for next time though!

Answer 12

How is this being paid? Are they paying for the flights directly? Are you receiving a stipend?

If it's a stipend you are already getting what you are asking. If not I don't see any harm in asking for the stipend but also wouldn't be surprised if they deny that request. I would also expect them to want to break it up if it turns into that. No company wants to pay a full stipend in advanced for the potential loss of your employment in the future.

If you receive that stipend it will be taxed and included on your W-2

I receive a stipend every 90 days for my flights (14 hour international). So, anyone saying you'd have difficulties with that time frame can easily be wrong. I ALWAYS get economy and occasionally i'm 'bumped' up to business class.

Answer 13

is there any precedent for re-allocating that money?

Yes, quietly reallocating funds is sometimes done in order to scam money out of a company or government by unscrupulous employees or groups of employees, sometimes in much more imaginative ways than this.