War on Skiplagging Escalates
The airlines hate hidden city ticketing and are cracking down.
There have been several stories in recent weeks about airlines going after a company called Skiplagging.com, going so far as to strand teenagers in strange airports after refusing to honor their tickets. American Airlines is the latest to sue the company.
A new lawsuit brought by American Airlines against a controversial ticketing website is bringing renewed attention to “skiplagging,” or “hidden city ticketing” — a technique used by some passengers to get lower fares.
What is skiplagging?
It works like this: Say a passenger wants to travel from New York to Charlotte, N.C., but the nonstop route is pricey. So instead, they book a cheaper flight that takes them from New York to Denver, with a layover in Charlotte. Rather than fly all the way to Denver, they simply get off in North Carolina and ditch the rest of the ticket.
The practice isn’t exactly new. “Travel agents have known about hidden city fares for decades, and in some cases travel agents would knowingly tell their customers,” says Henry Harteveldt, a travel industry analyst at Atmosphere Research Group.
I’ve been well aware of the practice for a very long time, although I don’t believe I’ve ever engaged in it. Nowadays, living relatively near two major airports, booking relatively inexpensive direct flights isn’t much of an issue.
Regardless, Skiplagged offers a service to help fliers find cheaper flights by using the practice.
Last week, American Airlines filed suit against Skiplagged in federal court. In its complaint, American alleges that Skiplagged’s practices are “deceptive and abusive.”
“Skiplagged deceives the public into believing that, even though it has no authority to form and issue a contract on American’s behalf, somehow it can still issue a completely valid ticket. It cannot. Every ‘ticket’ issued by Skiplagged is at risk of being invalidated,” the airline said.
Officials for the site could not be reached for comment. But Skiplagged, which has been around for a decade, has survived past lawsuits from the likes of United Airlines and Orbitz. It even brags about these victories on its site, boasting, “Our flights are so cheap, United sued us … but we won.”
It’s not at all obvious what’s either “abusive” or “deceptive” about Skiplagged’s service. It’s right there in the name, after all.
Why do the airlines dislike skiplagging?
Skiplagging is not illegal. But most major airlines, including American, Delta Southwest and United, don’t allow it.
For one thing, airlines lose money on the practice, says Tim Huh, a professor at the University of British Columbia’s Sauder School of Business, who co-authored a study on skiplagging last year. For a non-direct flight, “they have a lower price ceiling for it compared to direct flights so that they can attract customers.”
When someone skips out on the final leg of a trip, airlines can’t fill the empty seat, which would have sold for more money had it not been booked as part of a multi-stop itinerary.
“They are selling that seat with a 95% probability that you’ll show up,” Huh says. “That’s what the airline accounted for. So that’s a [big] loss in the system.”
That explanation, frankly, is nonsensical. How can an airline possibly lose money if a customer, having paid full price for the ticket, simply doesn’t get on a flight? If anything, they’re saving a small amount because they’re carrying less weight. They’ve already been paid for the seat so of course they can’t sell it to another customer.
Now, if the answer is simply “We want to be able to charge more money for direct flights,” I get it. But, if they’re selling tickets from City A to City B and cheaper flights from City A to City C via City B, one can hardly blame customers for seeing the inequity in the system and taking the cheaper flight to City B.
In addition, failing to board a connecting flight can cause confusion and delays at the gate, Harteveldt says. The airlines “will make announcements [such as] ‘paging passenger John Doe or Jane Doe.’ … The airline doesn’t want to leave people behind.”
So that’s actually a valid argument! But the obvious solution to that problem is to stop trying to enforce a stupid policy and have customers who won’t be on the connecting flight let the airline know.
Oddly, even though the airlines have lost every time they’ve sued Skipplagging the company, they’re still allowed to enforce their own policies against skiplagging the practice:
If an airline finds out what you are doing, it could simply cancel your ticket or even ban you from flying with it. That’s what reportedly happened recently to a North Carolina teen who booked an American Airlines flight from Florida to New York but disembarked at his Charlotte connection. The boy’s father told Insider that American banned him from flying the airline for three years.
“If you’ve done this repeatedly, [the airline] is going to say you owe us money,” Harteveldt says. “They may be willing to settle for a certain number of cents on the dollar. Maybe they want to collect all of it. But airlines can and will take steps to protect themselves.”
There are other drawbacks as well, he says. Even if your attempt at skiplagging is initially successful, it’s only likely to work for one-way travel. Once the airline realizes you didn’t fly to your ticketed destination, it is almost certain to cancel your return.
Finally, any checked luggage would arrive at the ticketed destination without you. So, carry-on is it.
I can’t remember the last time I booked a one-way flight. It was probably my return stateside from Germany when I left the Army in 1992, although the Army likely booked the flight.
Airlines overbook flights routinely. So what they’re mad about is that they sold a ticket from Charlotte to Denver with a 100% chance of a no show instead of their expected 5% no show chance. Which means they should have overbooked the flight more than they did. Thus, they “lost” money.
It’s not exactly an argument that makes you feel bad for the airlines, though.
There’s an obvious answer to this: figure out a way to make it work. Allow it and figure out a way to “sell” the remainder of the split ticket.
Airlines need to get with the program. Constantly squeezing customers into ever-smaller seats and all of the other indignities of flying don’t engender a lot of sympathy. Cracking down on customers who are making economically rational choices is stupid. FIND A WAY TO MAKE IT WORK.
I spent about a decade in various US cities, a few international ones on a gig.
The hiring company is on the hook to house you appropriately and repay you for travel expenses.
A lot of folks in my position would choose to go home every weekend. I very often chose not. I was single, had not pets, no children, and my loved plants died years ago. The only one I really cared about was the bansai tree.
Going home meant many hours of utter bullshit. The flight itself is easy. It’s the bullshit involved with getting there and getting home that is annoying and troublesome.
Besides, some times I wanted to check out the local scene on the weekend.
When you are the new person in town and your social skills don’t entirely suck, locals will squire you around town. Local pride is a thing. They want to show off how cool and cosmopolitan their town is. Just ask a person about the best low-key restaurants and sight-seeing opportunities in town for me, the lonely traveler, and you get about a 40% uptake rate to landing somebody who takes it upon themselves to show you around. Squire you.
I have had more “come over to my house” meals than I can recall.
Sometimes it got weird. Um, I’m not a swinger or I’m not gay. I’m here for camaraderie and local flavor.
If the chuds at work were super lame and I did not want to temporarily bond with them, the next best choice was the upscale dive bar. Every town has one. Introduce yourself to everyone. Tip well. Buy a round. Buy two. Don’t be an asshole. Ask people about their interests. Compliment them about odd things they have no control over.
I am lifelong anxious as hell and a bit agoraphobic, but I can make new friends in a new town in four days guaranteed.
The trick is to 1. Indicate up-front you are brand new in town, 2. Ask a local about fun things to do in town, specifically ask about cool stuff to do in town, 3. Bring humble and self-deprecatiion. Buy a round in a super low-key way. 4. Leave ’em wanting more. Dip out at eight PM.
1.A. Be honestly open.
Even my dumb ass can make new friends fairly easily.
I am anxious by nature and more than a bit agoraphobic, but if I were parachuted into Yakutsk in a month I would be buddy with the mayor. It’s not even that hard.
The AA lawsuit stands a good chance, because Skiplagged is selling AA tickets without AA’s consent.
Buying tickets through third parties, like travel agents, is an old tradition. But these have agreements with the airlines to do so. I can’t sell you a ticket on AA, or any other airline, even if I can physically carry out the steps to get your exact ticket at the price I quoted.
@Ben:
Few things get me to feel bad for the airlines.
I don’t want to get into the intricacies of pricing flights, or even how much a flight costs an airline, I’ve other things to do this month. But, IMO, they need a more customer friendly pricing model.
Here’s a simple thought experiment:
Ask 100 people who bought a six pack of Coke at the same Walmart over the course of a week what they paid for it, and chances are they paid the same price, or nearly so. Ask 100 passengers in the same flight what they paid for their ticket, and you’ll get a wide range of responses.
The last time this came up I mentioned that not all airlines hate the practice. Australia limits the number of flights Qatar Airlines and others can fly into a short list of major airports. But with a badly drafted exception they allow any number of flights to secondary airports. So qatar added flights to Adelaide from the Middle East, with a stop in Melbourne. They expect to fly the plane empty on the hour plus legs to and from Adelaide. Sauce for the goose.
I’ve done this the other way. I used to fly from Cincinnati. A couple of times I found cheaper round trips from Dayton to my destination, with a stop in Cincinnati. Besides the price, the parking and terminal situation at Dayton was well worth the extra 45 minutes to drive to Dayton.
@gVOR10: Odd. I neglected to capitalize my second “Qatar”, but I didn’t get Edit.
I did this unintentionally yesterday.
I was on the road early this week driving with my daughter out to college, and then I flew back home one-way yesterday. I live south of Denver, such that Denver International Airport and Colorado Springs Airport are roughly the same distance and Colorado Springs is closer if Denver traffic is bad. I much, much prefer Colorado Springs because it’s not a constant shit-show like DIA – pretty much in every way it’s a better airport except it doesn’t have nearly the number of flights that DIA has, which is admittedly a major downside. But I’m happy to trade a low-stress experience to add a leg which usually goes through DIA anyway.
So, on my flight back, I booked through to COS, and since this was United, there was a layover in Denver, which is a major United hub. But a series of weather delays meant I missed my primary and secondary connections and would have to wait at DIA for over three hours, so instead, my wife came down and picked me up. I told the United customer service desk that I was doing this and explained the reasons, and they were totally cool with it and thanked me for letting them know.
Clearly, this is a different situation than intentional skiplagging. If my layover had been in, say, Chicago, well, then I would have waited those 3+ hours for the next flight.
@gVOR10:
I think Frontier and Breeze are on record that they are ok with skiplagging.
I’m not acquainted with how Breeze operates. Frontier makes more money off fees than fares. Maybe they don’t care if you ever get on the plane, so long as you paid the non-refundable fees.
The photo illustration is the star child from 2001, trapped on a Southwest flight.
“Ask 100 people who bought a six pack of Coke at the same Walmart over the course of a week what they paid for it, and chances are they paid the same price, or nearly so. Ask 100 passengers in the same flight what they paid for their ticket, and you’ll get a wide range of responses.”
Yes but… the Coke has an (almost) unlimited inventory whereas the seats on a plane are a very finite resource. The same thing applies to sporting events, concerts, etc., and not just because of WHERE you are sitting but because of WHEN you buy your seats. I know that sports began using dynamic pricing years ago.
That doesn’t mean that airlines don’t need to address their pricing models, both with regards to skiplagging and just in general. But I don’t think comparing airline tickets to other consumer goods really makes sense and I don’t think it is reasonable to expect that everyone pays the same price for a plane ticket.
@Kazzy:
Nope because their “reasons” are not reasonable in the slightest.
If not the exact same price all the time then it should be fairly close – there’s no reason for large discrepancies between pricing when you can literally have the website time out on your picking seats (life happens) and watch the price jump $40+ per ticket. That happened to me earlier in the year and pissed me off so bad I called to complain and see if I could get the org price as I had a screenshot of the offer. When denied, I went with a different airline and adjusted my plans. There was ZERO reason for 10 minutes to make a difference in pricing other then sheer greed – they knew I was interested and instead of being reasonable or even offering a slight price drop of a buck to seal the deal, they jacked up the price for no sensible reason.
Airlines have no moral high ground in this. Even if they could make a sensible case for dynamic pricing, they are abusing the concept to justify blatant money grabs that have nothing to do with logistics, finite resources or complications and simply about getting every penny they can.
@KM: I just had the opposite experience. I was looking for 3 tickets and the prices were high. Still a few weeks out so I was stressing a bit. Woke up at 1am, decided to check and lo and behold the tickets were $75 cheaper. Bought them. Slept well after that. And in the morning, the prices were back up. Today they are even higher. Makes travel very miserable.
@KM: Inflation could never possibly involves just rank greed and nothing more tho. Pricing is always just the invisible hand of the market or something.
The dumbest trip I ever took was to the far west of Chicagoland. I didn’t need to be there. Like at all. Some dba’s on the project were at a Sybase outpost in Chicago. Way west.
Itasca? Something village. It was about 7 miles from O’Hare, but I landed at Midway for some unexplained reason. I took a taxi and the fare was was 80 something dollars. I tipped forty.
Some office park in the middle of exurban nowhere. The purpose was to validate the front end software (I believe it BusinessObjects) could connect to and query a Sybase IQ dbms on a such and such configured server.
Pointless busy work. It was a milestone on the project plan. A t that needed crossing. Utterly pointless. It wasn’t our server, it wasn’t our network. This proved nothing.
I was there all day. My input required about ten minutes of my time. I validated that BusinessObjects could indeed connect to and query a Sybase IQ database. I mostly sat outside reading a magazine and smoking cigarettes.
I knew two folks there and kvetched about my stupid long taxi ride out here. One guy said to call up the town car service. It’s cheaper and easier.
On my ride back to Midway we drove directly next to O’Hare. I could see it. It was probably seven miles away from the office park. But no, I had to go essentially downtown to Midway.
Crikey freaking Moses! Dumb trip for basically no reason that I did not have to be there for, and really poorly executed logistics.
A limo is cheaper than a taxi.
@Kazzy:
I concede to cherry picking. If you asked 100 buyers of the same type of car, they’d also report varying amounts.
Still:
@KM:
There are some reasonable motives for a lower or higher price. If you buy a ticket a month in advance, a discount for having the money sooner makes sense. In essence trading money for time.
Nor are other products exempt from demand pricing. Usually, though, such things are seen as price gouging. See for example how much people pay for gas when an approaching hurricane causes an evacuation. There are justifications for this I won’t get into, but the optics plain suck.
Airline prices are pretty much set by demand, consistent with the estimated costs of operating a flight. If only fifty passengers want to fly from, say, Chicago to Podunk on Tuesday at 7 pm, their fare won’t quite reflect the small demand, assuming this flight is operated by a 160 seat A320.
On the other hand, if this flight attracts 400 passengers, the fares will cost a ludicrous amount.
I get the need to balance periods of low demand with ones of high demand, but not without limits.
@Kazzy: No.
Dynamic pricing based on supply and demand might make sense if there was a free-market, where tickets could be freely bought and sold and there were strong protections to prevent someone cornering the market on various routes, but that’s not at all the case. Here you have someone with a big thumb on the scale setting prices Willy-nilly to extract as much money as possible.
There are a lot of industries that are basically about wealth extraction, and they are all awful. Just a burden on society. Payday loan levels of bad.
My general thought on airline tickets is similar to apartments — we need regulation that provides price stability, if not actual price controls. Limit the price variation over time so people can plan.
@Kathy:
I find it implausible that the airline doesn’t have models to estimate demand when planning routes.
@gVOR10:
The Cincinatti airport has to be weirdest in the US. It is bizarre. The layout. The “spokes”. Way worse than DFW.
If a bright 8 year old child could design an airport, it would be Cincinnati.
I have slept there twice. Once mostly upright and once on the floor against the outer wall.
@Jen: I recently dropped my daughter off at college, and was astounded that, at a time when millions of American families are doing the same thing and have been doing so for decades, the airlines have no way to jointly make a reservation for a one-way ticket (the student) and a round-trip ticket (the parents). You have to make two separate reservations and hope the flight doesn’t fill up between making the two reservations.
@Gustopher: I’m not sure I want a free market airline industry. In fact, I know I don’t.
Explain to me how you’d setup a market wherein tickets could be bought and sold freely?
Explain to me how you’d protect against markets being cornered? First though, please provide an example of a market that is cornered.
I just saw a report that the airline industry is excite that net profits are expected to be twice what originally thought for the year. HOLY SMOKES! Even with that improved projection… there net profit margin is 1.2%. How exactly is that a system setup for wealth extraction?
@Monala: Exactly! It seems like something that should have been considered when the system was created. You could certainly do this at a travel agent’s desk, way back in the dark ages of paper tickets.
@Monala:
@Jen:
In the dark days of paper tickets, ticket wallets, red carbon paper, etc., there was no pressing imperative to simplify everything to maximize shareholder value.
@Gustopher:
They do, but some routes are more semi-seasonal than others. that is, there is demand for them, but not as much.
Though my example would make more sense if the flight were from Podunk to Chicago than viceversa.
I once flew from London to Houston on a Continental DC-10. the flight was like 2/3 empty. It was great, with lots of space in coach to spread out and even lie down. Plenty of pillows and blankets, too. This was either late summer or early fall, when demand for transatlantic travel begins to go down. Even taking this into account, the flight was well underbooked.
@Gustopher:
As long as the federal government requires strict identification of ticket holders, there never will be a “free” market like for other types of tickets. And the free market for other types of tickets also gave us Ticketmaster and scalping. It’s a good thing, IMO, that the system does not allow third parties to arbitrage plane tickets.
@Andy: @Kazzy: How are third parties arbitraging airplane tickets worse than first party arbitrage?
Third party arbitrage would be terrible in practice, but would at least work well on paper when certain “free-market” conditions are met that are completely impossible to meet with the current situation. My point was that we basically have that terrible third party arbitrage in place now, except without the third party, and with extra user fees (you can’t change a name on a ticket without hefty fees, etc).
The fact that they don’t do it well is beside the point. They’ve managed to create a situation where no one benefits and everyone jumps through a lot of hoops and hassle.
@Kathy:
I don’t have a lot of sympathy for businesses that do not know that springtime happens each year. Perhaps they can hire an expensive consulting company to reflect upon calendars and history and the cyclical nature of seasons.
I skip lag all the time, and I don’t need any website to do it. And I didn’t know this action had a name.
If I want to fly non-stop to Atlanta from LAX, on Delta, it’s often over $650. A flight to Charlotte on Delta might be $400, but it has a stop in Atlanta. So, for $400 I get a non-stop flight to Atlanta from LAX. I grab my carry-on and backpack, and I’m gone. I’ve never had a problem . If Delta doesn’t like it, they can change the price of the non-stop flight to Atlanta. Sometimes flights to Miami are $750 on American. But a flight to Orlando, with a stop in Miami, might be $450 or even $500. I book that flight on American, and depart in Miami, with zero issues.
I’ve probably done this 30 times in the last 10 years.
The airlines can solve this by changing their prices. But in the meantime, I’m going to take advantage of whatever loopholes they give me.
@Kathy:
… I was a traveler.
Back in the day, my travel agent got tired of changing my tickets all the time, so she finally gave me a roll of “stickers”.
Stickers were magic. You just put them over the existing ticket info and wrote in the new info. The assumption was that fare corrections had been done by the tribe agent before applying a sticker.
It was like I was living in my own version of “catch me if you can”.
(… In a time of chimpanzees, I was a monkey.)
Now, the best deals for traveling, domestically or globally is… ITA Matrix.
@Liberal Capitalist:
I remember stickers.
I got them once, on the flight back from London I mentioned earlier. The return trip was an open ticket, meaning it was paid for but had no fixed return date or time. I went to a Continental ticket office in London, and the agent applied the sticker with the date, time, and flight number over the area that said OPEN.
I don’t think such open tickets are sold anymore.
@Michael Reynolds:
“[ding] You are now free to move about the solar system. Except Europa.”