The Legal Victory that Lets You Save Big Money on Airfare

Regular readers may be familiar with the indispensable guide to saving money on airfare using hidden city and throwaway tickets.

In the guide I explain how to find extra flights for your ticket that allow you to save money, I outline the risks and how to make best use of the techniques.

Take for instance Washington National – Phoenix non-stop.

Book those same one-way tickets with a connection onward to Tucson (that you don’t take) for less.

Two years ago a new website called Skiplagged launched to help find those extra flights that save you money.

A year ago Orbitz and United sued to shut down the site. Orbitz settled shortly thereafter leaving United to pursue litigation alone.

  • United sued in Illinois, and Skiplagged is in New York. United’s lawsuit was thrown out for lack of jurisdiction.

  • United’s substantive claim, that Skiplagged was violating its contract of carriage (a contract oddly between the airline and passenger, which Skiplagged was neither) wasn’t ruled on.

Hidden city ticketing is not illegal (and the New York Times “Ethicist” endorses it), but it’s generally against airline rules, and there are some basic practices you need to follow to make sure you or your bags don’t wind up in the wrong city.

  • You’re buying a ticket from A to B to C, where A to C is cheaper than buying A to B, but getting off in B.
  • You can’t check bags or else they will go to C.
  • In the event of weather or cancellations, an airline may want to reroute you to C via a different connecting city (“D”).

Airlines see themselves as selling you a ticket from A to C, rather than a seat on a plane for A-B and also B-C where you have the right not to sit in the B-C seat.

United’s lawsuit against Skiplagged was all over the media at the end of December and that allowed the founder of the site to raise a legal defense fund. He asked for $10,000 and raised $81,000. United has not refiled its lawsuit, and the founder of Skiplagged will donate the leftover $23,000 to a travel charity.

It also raised consumer awareness about the practice of throwaway ticketing, so the lawsuit didn’t exactly help United (or other airlines).

At the time of the dismissal, United said:

We remain troubled that Mr. Zaman continues to openly encourage customers to violate our contract of carriage by purchasing hidden-city tickets, putting the validity of their ticket and MileagePlus status at risk.

Yes, they are warning customers that they’ll find you and shut down your mileage account.

And I’ve always warned that if you do this frequently and put in your mileage number, you do have risk. You may prefer to credit throwaway ticket flights to a partner mileage program instead. And read the guide.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I think everyone has the right to do this, and United has every right to come after those who do and shut down their accounts, charge them for the fare differences, and even refuse to do future business with them, if they choose. All that said, the risks may be low.

    “Crazy” pricing that makes this all an issue is a fundamental factor of supply and demand, the marketplace at work. Right now I’m looking at a United flight from Wichita to DFW, connecting in Houston. The fare is $111 one way. Just to fly Wichita to Houston on the same itinerary without connecting to DFW is $457. I actually do want to go to DFW, and American is pricing twice as high for my date, so I guess I’ll fly United and make the connection. If I actually wanted to go to Houston would I book that extra leg to DFW and throw it away? Tempting indeed.

  2. I’m not clear why an airline should feel you’ve violated their business by abandoning the final leg. Your absence actually saves them fuel, since they’ll be transporting less weight (your body weight is missing, and your carry-ons, plus you saved them weight in luggage on BOTH legs because you didn’t bring any).

    The only time this could EVER hurt anyone is if a third party needed that leg but couldn’t buy the ticket due the flight being sold out. However, since airlines guard against that situation by overselling, I can’t see how they’d ever prove YOU were at fault.

    The fact that hidden-city practices is still a money-saving option shows that ticket pricing has very little to do with the airplane’s true flight cost. If the airline doesn’t want people to use the prcing they advertise, then they should quit offering it. Rather than trying to blame a smart consumer for the airline’s own stupidity.

  3. @Lindy, you opine:

    “The fact that hidden-city practices is still a money-saving option shows that ticket pricing has very little to do with the airplane’s true flight cost. ”

    Absolutely. But there is no general requirement that price correlate to cost of delivery except that, over time, any provider will need for price to exceed the true cost of delivery. The contracts of carriage require that the passenger will take the entire trip. Any deviation may be construed as a violation of the contract.

    As such, when I misconnected in Juneau on the outbound a SEA-JNU-GST-JNU-SEA, I took care to have an agent notate that I made the 41 mile JNU-GST leg by private prop plane, “forgiving” my deviation.

  4. My question is… why would the airline write that in their contract? Is there any reason OTHER than them wanting to knowing & openly rip you off??

  5. Lindy,

    The above example is an excellent one – AA apparently believed that its profit maximizing (or loss minimizing) price on a non-stop DCA-PHX (where they are the only non-stop carrier) was $476.

    Equally, they thought such a price for a DCA-PHX-TUS was $261. Neither of us is privy to the data AA uses in their yield management algorithms, but perhaps the $476 fare reflects AA’s efforts to enjoy its position as the monopolist in non-stop service in that market, while they have to compete in the DCA-XXX-TUS market with United, Delta, Alaska and Southwest because ALL of the carriers offer only connecting service in that market. It seems that AA will meet the market fare in the much broader, more competitive, DCA-XXX-TUS connecting market, even if they route the passenger through PHX.

    $476 is a relatively high fare, and I suspect it is in a rather high fare bucket – one often purchased by business travelers who will pay a premium for non-stop service, and in that market, they are captive to AA. You seem to think of this as ripping the customer off. It can be equally termed trying to extract what they can out of passengers who will pay a premium for non-stop service.

    Were passengers routinely able to engage in hidden city ticketing, airlines would lose out on opportunities where they have some market opportunities. I hope this provides an example (and no doubt there are more) of why a nonstop can cost more than a connecting flight beyond the subject destination.

    Hidden city ticketing is a very hazardous enterprise – you might purchase DCA-PHX-TUS, only to be rerouted on DCA-CLT-TUS, as permitted in the carriage of contract. The effort in saving a couple hundred dollars is rather much lost when that occurs.

  6. What @jfhscott said — except that while there is some risk of being re-routed I’ve never had a problem insisting on my original routing, just saying I need to connect in X (I lost something in the club there that I need to pick up, etc)

  7. It seems that the original lawsuit was merely a harassment tactic and not serious litigation. United’s high-priced attorneys did not even bother to sue in a location where the court had jurisdiction over the defendant. lol Like United doesn’t have attorneys in New York.

  8. @jfhscott, Brilliantly explained! In any area of commerce, price and the cost to the provider are not directly linked. Price is set at the point where maximum profit will occur, regardless of the cost. It is not set at cost plus a percentage as some think. Nor in the case of airlines is it related to distance flown or number of legs. When an airline has monopoly nonstop service, prices can be set high. When there’s a connecting service that competes with other connecting services, or with nonstop service on another carrier, competition keeps prices lower.

    In my Wichita-Houston example above, United is the only carrier offering nonstop service. Their prices are thus often sky-high. However, from Wichita to Dallas, United only offers connecting service, while others (AA and WN) serve the cities nonstop. If United wants me to fly United from Wichita to DFW, they’d better do it at a very competitive price.

    The airlines have to at least make an effort to prevent hidden city ticketing, or many more people would do it and the airlines would lose their opportunity for getting the premium prices that many are willing to pay for nonstop service. They would also see a marked increase in no-shows on connecting flights out of their hubs.

    So I see both sides of the issue. Engage in hidden city ticketing, but be aware there are risks.

  9. I think the bigger issue is that airline pricing is counterintuitive to the average person and full of contradictions. A $1 fare is a mistake until it has $500 of fuel surcharges attached to it. An elite is worth a minimum $0.12 RASM until premium cabins go on sale for $600 rt. There’s basically no other product or service where the pricing isn’t at least somewhat tied to consumption

  10. @jfhscott, Lindy is exactly right. The DCA-PHX example is a consumer rip off.

    You state: “Neither of us is privy to the data AA uses in their yield management algorithms, but perhaps the $476 fare reflects AA’s efforts to enjoy its position as the monopolist in non-stop service in that market, while they have to compete in the DCA-XXX-TUS market with United, Delta, Alaska and Southwest because ALL of the carriers offer only connecting service in that market.” What you euphemistically refer to as enjoying its position as a monopolist is better known as a consumer rip off. Monopoly pricing is the epitome of a consumer rip off. That is why we have had anti-trust laws for more than a century.

    The price for the longer trip, DCA-PHX-TUS, is significantly lower than DCA-PHX because there is more competition on the longer route. Its pretty simple. Mongo say competition good…monopoly bad.

  11. I did try the SkipLagged website, but after a few searches the “Hidden City” checkbox option disappeared. I noticed that the flights listed were priced incredibly higher than flights thru Kayak’s website.

  12. My question is if it’s ok for my young girls to traveling with me on skiplegger . And if I’m on a flight that is bound for Canada do you have to show your passport before boarding a flight that is leaving from the US and has a lay over in the US before leaving to Canada

  13. TWO REASONS I FEEL NO GUILT:

    – I purchased a ticket from Vegas to Minneapolis, but with intermediate stop in Dallas. Due to pilot illness the last leg was canceled, and I argued I should get the FULL ticket back since they did not fulfill the contract (deliver me to Minneapolis). The airline refused saying “We got you halfway there.” I got back just 1/3rd of my original cost.

    – If airlines can refuse to deliver a passenger to his/her destination, and essentially split the ticket into two separate flights with two separate charges, why can’t we do the same?

    – I used to fly direct from LAX to PHL but when US Airways & American merged the direct cost increased from $350 to $750. Same flight…. but now they had a monopoly on that direct flight.

    – So I started splitting my ticket by buying LAX to NYC or LAX to BWI (with stop in PHL). That brought my price back to what it used to be, and I felt zero guilt because US Airways/American screwed customers when they raised the price $750 for the same Direct flight that used to be $350.

    – Megacorps are Things like rocks. They have no souls or morals and therefore don’t care if they rip-off the customer.

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