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Skiplagged’s founder Aktarer Zaman currently faces a $75,000 lawsuit from United Airlines and Orbitz for promoting unfair competition.
The Hidden Costs of Hidden-City Ticketing January 14, 2015INDUSTRYair fare,
airfare
Hidden city ticketing can be confusing to understand at first, but it’s actually quite simple.
A traveler in San Antonio wants to go to Salt Lake City:
A direct flight will cost her $391.
However, a flight to Las Vegas with a stopover in Salt Lake City costs $186.
The traveler books this flight, and instead of flying all the way to Las Vegas, she disembarks in Salt Lake City, saving herself $205.
The concept is a little counter-intuitive and hard for some to wrap their heads around – it’s not often you get more by paying less – but within the hub-and-spoke model used by airlines, it makes sense. This creative workaround might seem like a savvy way to travel cheaply, but the practice has hidden costs that may cause long-term damage to consumers and airlines alike.
Image courtesy of FlyShortcut.com
Airlines frown upon hidden city ticket booking because it reduces their revenues and meddles with the predictive software gauging how many passengers will actually show up for flights. This changes how those flights are priced, which has a knock-on effect for consumers, who end up paying more. Consumers may even find it more difficult to book seats on planes that appear to be at capacity when they have, in fact, been booked by hidden city ticketers
who have no intention of taking those flights at all. If enough people exploit hidden city destinations, these locations might be cut from flight itineraries altogether. This is bad news for smaller airports, as less-trafficked regions account for the largest portion of hidden city opportunities.
Websites like Skiplagged and FlyShortcut make it easier for consumers to find hidden city flights. Skiplagged’s founder Aktarer Zaman currently faces a $75,000 lawsuit from United Airlines and Orbitz for promoting unfair competition. Airlines can try to mitigate the effects of hidden city ticketing by shutting down these sites, but doing this doesn’t get to the root of the problem. Consumers can take advantage of hidden city pricing regardless of Skiplagged’s existence; at this point, the practice is an open secret. So should airlines look to new pricing models?
We reached out to
The Cranky Flier’s Brett Snyder for comment. He argued that airlines’ current pricing models ultimately benefit consumers: “If they were to price differently, then fares would rise and capacity would likely go down.” Snyder also suggested that airlines could potentially pursue people who abuse the system: “Airlines would have no problem looking up one-way itineraries where people no-showed for the second segment. It wouldn’t be hard to then figure out which ones were trying to game the system.”
In the end, it may be up to airlines to close the loophole and discourage travelers from taking advantage of hidden city ticketing. Until they do, one-way fliers can still capitalize on rock-bottom prices, but unfortunately the attention that United and Orbitz’s lawsuit has generated may have only encouraged more travelers to do so.
