Airlines Cannot Stop Hidden City Ticketing Without Breaking Their Own Pricing
Lawsuits against Skiplagged keep failing because skiplagging exploits the way airlines price nonstops versus connections.
Half as Interesting · Why Almost Every Airline Has Sued This One WebsiteAirlines cannot stop hidden city ticketing without undoing the pricing system that fills their planes and protects their profits.
Hidden city ticketing means booking a cheaper connecting flight and getting off at the layover city instead of taking the final leg. A traveler who wants to go to New York books a cheaper trip to Boston that connects in New York, and then simply does not get back on the plane.
The trick exists because of how airlines price flights. A nonstop costs less to operate than a connection, which requires two planes, two crews, and more fuel, yet the nonstop sells for more because more travelers want to fly direct and will pay extra to do it.
The hub system, in which airlines route most passengers through a few large hub airports, makes that gap much wider. An airline that dominates nonstop traffic between two of its own hubs can charge a premium for that nonstop, while the same airline faces intense competition for connecting trips, where rivals can offer many different routings. That competition pushes the price of the longer, costlier connecting itinerary below the price of the shorter nonstop.
Airlines know they are offering seats on a nonstop flight at a discount to connecting travelers, and they use the discount to fill planes. They try to fill each hub flight with as many high paying nonstop travelers as possible, then fill leftover seats with lower paying connecting passengers who otherwise would leave those seats empty. Hidden city passengers disrupt that balance by occupying the discounted seats without taking the onward flight, leaving that second plane with empty seats.
Major airlines have gone after Skiplagged.com, the fare search site that surfaces these itineraries, with mixed results. A Lufthansa suit against a passenger was dismissed, and United Airlines had its case against the site dismissed because skiplagging, or telling people how to skiplag, is not illegal. Aktar Zaman, the founder and chief executive of Skiplagged, settled out of court with the travel site Orbitz. American Airlines sought more than 94 million dollars and was awarded 9.4 million dollars, half for Skiplagged's use of its copyrighted logo and half in disgorgement of revenues.
The only fix would mean setting fares in conflict with how the hub system is designed to fill seats. Zaman puts the average saving from a hidden-city booking at about 180 dollars per trip. At an estimated 300,000 buyers, that works out to about 54 million dollars a year.
Questions people ask
Can I get in trouble for getting off at the layover?
No. Buying a ticket and skipping the second leg is not a crime, and courts have dismissed airline claims against passengers and against Skiplagged on that basis. Airlines do prohibit it in their contracts with travelers, so they say they can cancel return flights, take away frequent flyer miles, or refuse future sales.
Why can't I skiplag every trip?
No checked bags, because a checked bag flies to the final ticketed city. You also generally need a one-way ticket, because once you miss a leg the airline usually cancels the rest of that reservation. International trips add passport and customs complications.
What is the hub and spoke system?
After 1978 deregulation, the U.S. government stopped setting routes and fares. Most large carriers reorganized around hubs, funneling passengers from smaller cities through big hub airports. That concentrates nonstop pricing power in hubs while connecting markets stay highly competitive.