In a recent legal move, American Airlines has launched a lawsuit against Skiplagged. This innovative travel website offers travelers a unique way to save money on flights by utilizing “hidden cities.” This tactic, which exploits a pricing system loophole in the airline industry, has not only intrigued passengers seeking cheaper options but has also raised concerns within the airline industry. If you’re struggling to afford your flights but want to book directly with the carrier, check out the best travel cards with 0% APR so you can pay your balance over time rather than all upfront.

What is skiplagging?

Skiplagging is when you purchase a multi-leg journey ticket with a layover in your desired destination city. Rather than taking the connecting flight to the destination you bought, you would exit the airport during the layover, saving money on your ticket. This strategy has proven to be economically advantageous due to airlines’ complex pricing structures that encourage passengers to opt for multi-leg journeys, which are often more operationally efficient for the airlines. For example, you might want to travel from New York to Atlanta. A direct ticket might cost $300, but you could pay just $200 for a ticket from New York to Miami with a layover in Atlanta. You’d book the ticket to Miami but leave the airport in Atlanta and never get on the flight to Miami.

Skiplagged has ingeniously tapped into this opportunity, operating a user-friendly website that assists travelers in finding these hidden-city flight options. By facilitating direct bookings through its platform, Skiplagged has gained popularity among savvy travelers looking to minimize their airfare expenses.

What is the lawsuit about?

American Airlines’ lawsuit, filed in a federal court in Texas, challenges Skiplagged’s authority to form and distribute contracts on the airline’s behalf. The airline contends that Skiplagged’s business model violates its terms of service by impersonating regular consumers during ticket purchases. The lawsuit asserts that Skiplagged charges customers more than they would be charged through legitimate channels, including imposing a $10 or 10% fee on top of the airline’s advertised fare.

Furthermore, American Airlines accuses Skiplagged of misleadingly using the airline’s trademarked logo and name to promote its ticket-selling service. The suit argues that this practice falsely implies that American Airlines endorses hidden-city ticketing and will support any arising issues. American Airlines describes Skiplagged as an unauthorized intermediary between the airline and consumers. It claims that the complications stemming from Skiplagged’s practices result in unwarranted blame on the airline when problems arise.

Surprisingly, Forbes conducted a comprehensive analysis comparing prices on Skiplagged and American Airlines’ official websites. The study revealed that Skiplagged could offer lower prices through the hidden-cities strategy for specific flights. However, it’s important to note that these cheaper options were limited to particular routes and were indicated on the Skiplagged website. In addition to these unconventional tickets, Skiplagged also provides standard flight options for travelers.

Who is Skiplagged?

Skiplagged, founded in 2013 by Aktarer Zaman, emerged as a solution to an existing strategy. Zaman recognized the pre-existing hidden-cities approach but identified a lack of accessible resources for travelers seeking these deals. The company’s journey has not been without legal challenges; previously sued by United Airlines in 2014, Skiplagged overcame accusations of unfair competition when the lawsuit was dismissed due to jurisdictional issues. Orbitz, another plaintiff in the case, eventually settled with Skiplagged, involving restrictions on website redirection and the use of copyrighted materials.

While hidden-city ticketing isn’t illegal, airlines like American Airlines view it as a violation of their policies and attempt to curtail the practice. Instances like American Airlines’ ban of a teenager using the tactic and Lufthansa’s lawsuit against a passenger exiting during a layover exemplify airlines’ opposition. To address potential misunderstandings, Skiplagged includes a warning reminding customers that airlines disapprove of this practice due to its impact on flight operations.

American Airlines defends its stance by highlighting that hidden city ticketing disrupts operational efficiency and leads to empty seats that other travelers could have used. A representative from Skiplagged counters that the company empowers travelers to save money rather than directing funds toward airline executives and shareholders.

Bottom line

As the lawsuit progresses, keep an eye on the verdict. American Airlines is aiming for a permanent injunction against Skiplagged’s ticket sales on its flights, alongside compensation for alleged damages resulting from the company’s operations. This lawsuit underscores the evolving landscape of unconventional travel strategies as airlines grapple with innovative methods that challenge their existing pricing structures and operations.

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