Why Airlines Need Hidden City Ticketing to Be Possible but They Also Can’t Let You Take Advantage of It

Welcome back from the holidays. I’m sure you’re trying to ease back into things at work, but there’s no time for that here. Let’s dive right into an airline pricing discussion on the topic of hidden city ticketing. This practice has been in the news a lot lately thanks to United and Orbitz suing Skiplagged for trying to help people take advantage. And while United has been beaten up in the press pretty much across the board (its own efforts only make the airline look worse), there is a good reason this policy exists the way that it does. With that, I’m going to try to do the impossible; defend something that is universally hated.

What is Hidden City Ticketing?
I suppose to begin this discussion, we need to make sure everyone understands just what “hidden city ticketing” means.

Hidden City Ticketing

Let’s say I need to fly one way from LA to Washington/Dulles on July 10 next year. I can take the 955a flight on United for $588.10, or I can buy a ticket to Boston (using the exact same flight to Dulles and then connecting) for only $215.60. I just don’t get on the connecting flight. That’s hidden city ticketing.

This isn’t anything new. People have used this for years to circumvent airline rules. To make it work, it requires a one way ticket where the part you don’t use is the last part of the ticket. (Once you no-show for any flight on a ticket, the rest of the flight reservations are canceled.) You also can’t check bags or they’ll go to the ticketed destination. And of course, you need to have a hub on one end or else the connecting options won’t be available.

It sounds restrictive, but there are still a ton of opportunities to take advantage of this because fares into a hub are often more expensive than fares through a hub. And that’s why most airlines prohibit the practice. Take a look at United’s contract of carriage, and you’ll find the prohibition in Rule 6, Section J, part 1.

Why Airlines Don’t Allow It
The initial premise seems strange to most people. Why would it cost me less to buy a ticket for two flights (LA to Dulles to Boston) than it would for just one (LA to Dulles)? After all, it costs the airline more to fly both flights. The reason: airlines don’t price based on cost. Airlines price based on demand (taking into account competition, of course). And the one thing people are willing to pay for more than anything is the convenience of a nonstop flight over a connection. Even though travelers are technically getting “less” (fewer flights), they’re really getting more of what they want.

The Rise of the Hub, and Why That’s Important
After deregulation in the 1970s, airlines started to realize that people not only wanted to pay for nonstop flights, but they wanted frequent nonstop flights so that they could get where they were going exactly when they needed to be there. The airlines had a problem though. They didn’t have enough demand to fill all those seats on a bunch of nonstop flights. That’s when the hub was born.

Airlines figured out that while there wasn’t enough nonstop demand in a market to justify nonstop flights all day long, there were other ways to fill those seats and make enough money to survive. By creating hubs, the airlines could provide the frequent nonstop flights that their high-paying customers needed while also creating opportunities to connect other people via those same flights. Airlines grew fast and expanded their footprints.

Connecting opportunities fell into two types. There were some small markets that didn’t have a lot of competition and behaved more like nonstop markets. Think of Morgantown, West Virginia today. I can fly United on that same flight via Dulles to Morgantown for $677.10. Some hubs have more places like that around them than others, and Dulles is not one of them. But think of a place like Charlotte. It might not have the biggest local market, but it has a bunch of small cities around it that act like nonstop markets from a pricing perspective. (US Airways serves 9 airports in North Carolina alone – I had no idea there even were that many available for commercial service.)

But the flip side involves big city connecting markets like LA to Boston. Everybody flies that route nonstop. United does it twice a day, but American flies it 5 times. Virgin America has three a day, as does JetBlue. Delta flies it twice a day. Those five airlines competing for nonstop traffic means that there will be heavy price competition. Then by the time you get to connecting options, you’re really competing almost entirely on price.

The airlines figured out that if they had an airplane with 100 seats but they could only fill 50 with high dollar nonstop or small connecting market traffic, then a flight wouldn’t work. But if the other 50 are filled with low dollar connecting traffic, then it can be profitable overall. It’s the delicate balance that makes this all work.

Hidden City Ticketing Makes It Fall Apart
When people take advantage of hidden city ticketing, it upsets the balance. The high dollar passengers now become low dollar passengers and the total revenue on that airplane drops a lot. That can push the flight into the red, leaving the airline with a few options. First, it could cancel the flight outright. Now, United isn’t going to pull out of the LA-Dulles market entirely, but it might think that its 7 daily flights should be only 6… or 5. Or it could look to use smaller airplanes because there is just too much low dollar traffic filling those big airplanes for them to be profitable.

What this means is fewer options for travelers needing to fly from LA to Dulles nonstop regardless of price and fewer seats on low dollar connecting flights for that group that wants to take a family vacation to Boston.

In the past, few people did this so it wasn’t a big problem. But now that websites are making it easier to find hidden city options, it becomes a real threat to the airline model. This isn’t an issue for low cost carriers that skim the top markets that have enough nonstop demand. It’s a big issue for the legacy carriers that are able to provide incredible schedules in many markets. Think of Delta with 9 daily flights between Louisville and Atlanta, US Airways with 9 a day between Charlotte and Wilmington, American with 8 a day between Dallas/Ft Worth and Springfield , or United with 5 a day from… Dulles to Boston. These are routes that simply wouldn’t have that frequency without this mix of traffic. And some routes might lose nonstop service entirely.

You won’t hear United explaining it this way, because it’s complicated. Instead, United is defending itself in a way that just makes people hate the airline more. United says that when people don’t show up for the Boston flight, that’s a seat the airline could have sold to someone else who wanted it. But of course, airlines overbook all the time. If more people no-show, then the airline will just start overbooking more. (This does become a problem if it’s random and not consistent, because they can’t adequately forecast and bumpings will rise, so keep that in mind.) United also says that it can delay the Boston flight because it throws off the weight and balance calculations. But those of us who have stood at the top of the jet bridge when the airline slams the door shut 10 minutes before departure know that’s bullcrap. That’s why they close the doors early.

United appears to be grasping for a message that’s easily understood, but it’s failing. Meanwhile Skiplagged looks like a hero when, if you read the lawsuit, there are some pretty shady things going on here. At least now you know why these hidden city opportunities exist. It’s also why the airlines prohibit the behavior. If this becomes widespread, then there could be consequences. But if the airlines wanted to get serious about this, they should really start chasing the people who are breaking the rules and buying these tickets. Make it publicly known. That’ll put a stop to it quickly.

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Gary Leff
Guest

Oddly, United’s prohibition on hidden city ticketing in their contract of carriage is relatively new. When Justice Scalia admitted to throwaway ticketing in 2004 he was in violation of US Airways’ contract of carriage — but had he flown United he wouldn’t have been.

http://viewfromthewing.boardingarea.com/2004/03/18/supreme-court-justice-endorses-throwaway-ticketing/

Grichard
Guest
Grichard

I get the idea that hidden-city antics kill off the high-dollar tickets that subsidize cheaper connecting flights. I’m not sure that I understand why the conclusion is that hidden-city antics “make it fall apart.” Seems to me that the result would be that airline pricing would regress closer to a constant “X dollars per mile flown” scheme. (Constant across different origin/destination pairs, I mean. Widespread hidden city gaming shouldn’t affect the ability of airlines to raise prices close to the date of the flight.) You could argue that this would be desirable or not, but I don’t see how it’s… Read more »

MeanMeosh
Guest

The basic premise against distance-based pricing is actually pretty simple. DFW to Detroit via Chicago is farther distance-wise than DFW to Chicago, but if I ran an airline, and have 100 business travelers ready to pay top dollar to go to Chicago vs. only 30 to go to Detroit, then why wouldn’t I charge more for a ticket to Chicago? Further, as Cranky pointed out in his post, a faster nonstop > a slower connection in the eyes of many consumers, because the convenience of a nonstop has tangible value. The problem is that the airlines haven’t done a terribly… Read more »

Jehu
Member
Jehu

>>You ask, “if I ran an airline, and have 100 business travelers ready to pay top dollar to go to Chicago vs. only 30 to go to Detroit, then why wouldn’t I charge more for a ticket to Chicago?”

Because in a competitive environment, you’re competition would be willing to charge a price between your top dollar price and what it costs to actually transport the passenger.

Nick Barnard
Member

But airline seats are perishable products. Sometimes (OFTEN!) you charge below your costs just to get something for the seat.

I’m not quite sure what the marginal costs per passenger are, but I’m guessing its below $20.

>

Grichard
Guest
Grichard

I’m not advocating for distance-based pricing. I’m just saying that if hidden-city ticketing becomes widespread, the system will trend in that direction. And distance-based pricing would have winners and losers among consumers, but wouldn’t be an all-around disaster.

Jehu
Member
Jehu

@James: Nice economic rationalization for the pricing that makes many of us feel like we are being taken advantage of. You are saying that carriers can serve more cities due to prohibiting hidden cities discount. Some of us think that is only part of it and that Airlines, when they get pricing power at a hub, use it. The evidence would be, as soon as Southwest enters a city, and there is real competition, that fares tend to drop. Skiplagged also finds the “prohibited” throw-away round trips. For extra credit, using your same model, please explain the benefits of prohibiting… Read more »

francis
Guest
francis

Something tells me that in a more efficient and competitive world, there would be only about 100 airports in the country with regular commercial airline service. People living anywhere else would ride an airline bus for the trip to the nearest one of those airports for a nonstop flight to wherever they’re going. Door to door travel time probably wouldn’t change much for most people. Prices would drop and fuel efficiency would improve. Delays would go down due to fewer flights and no more having to hold planes for connecting passengers. People traveling on business to/from smaller cities would be… Read more »

David
Guest
David

The PhDs who’ve done the maths around pricing seem to have decided that because a rule exists in the conditions of carriage, that they can rely on it to be enforced when doing the maths around pricing algorithms. The problem is they forget that those conditions of carriage aren’t always easily enforceable. In maths speak – someone has chosen the wrong boundary conditions of their pricing equation. In financial speak, the airlines have allowed themselves to be arbitraged. I appreciate why demand pricing is usually a good thing, but while ticket prices are quasi-arbitrageable, hidden-city ticketing will go on. The… Read more »

AW
Guest
AW

I understand the business end of the transaction, the frustration is how it plays out. Growing up in the Memphis area back in the Northwest hub days, last minute flyers would save hundreds (or sometimes thousands) of dollars by driving to Little Rock or Nashville and flying to their destination, ironically connecting through Memphis en route. Perfect legal action by any standard. So you have passengers spending more time and money in fuel to fly in such a way that also cost the airlines more to operate.

A
Guest
A

AGREE COMPLETELY. Hidden city bookings actually benefit the small market airports by giving them cheaper airfare than their city actually deserves. An example is a few years ago I was looking at booking MSP-LHR nonstop and the price was something like $1500. RST-MSP-LHR was significantly less, by about $500! Same goes for FAR-MSP-LHR. The 2-3 hour car ride out to a rural airport was saving hundreds to put butts in seats on planes that weren’t full. Then again, a RST-MSP flight was probably $500 alone because you “only book that flight if you need it.” It’s asinine, the people in… Read more »

Neil S.
Guest
Neil S.

I’m sure I’m making this simpler than it is, but it’s hard to feel bad for the airlines. They make pricing endlessly complex – are there two seats on any flight that have paid the same fare? – and they make all benefits pro-airline and con-consumer. As a simplistic example, if I flew a 380 mile leg on United, I’d get credit for 380 BIS miles, but I’d need to use a 500-mile certificate to upgrade. (I don’t fly them anymore, no idea if this is still the case.) But the point is, it’s always working out against the consumer.… Read more »

Shane
Member
Shane

I am not sure Uber is a good example. Uber is operating while ignoring legal requirements and is actually just as opaque than the establishment taxi system. Did you know that if you do not tip your driver above the agreed to fare you will receive a lower rating from the driver? Future drivers can and do discriminate against you and not take your call because you have a lower rating. My point is that Skiplagged is exposing a loophole that is covered by a contract and Uber is not making things transparent. They are plowing through/breaking laws and regulations… Read more »

Neil S.
Guest
Neil S.

Fair enough. I was trying to make a “disrupt the status quo” point, but you’re right that I chose a bad example.

Todd
Guest
Todd

Have you actually used Uber? There is no tipping.

Shane
Member
Shane

There is no official tipping, but I there is documentation of drivers mentioning that you need “5 for 5” or other such suggestions ($5 for a 5 star rating as a passenger).

FreeMarkets
Guest
FreeMarkets

I use, on average, 12 to 15 Ubers a week in cities all across the country. I’ve never had an Uber driver ask or suggest I tip, and I know for certain that I have a very high customer rating. In fact, I once tried to tip an Uber driver who drove like hell to get me to a flight I was about to miss and he refused to take it. I find that people who make these crazy comments about Uber are typically people who have no concept of how free markets (or our economy) actually work.

Linda Sledehammer
Guest
Linda Sledehammer

I agree with Neil when I read the “Uber” line. Anything that is cheaper and easier to use will gain popularity. Uber is cheaper and easier to use. Skiplagged is easier to use AND saves money. IF, big IF, United wins, another 20-year-old will come up with a similar website and here we go again.

Carl
Member
Carl

Airlines are a for-profit business, and they can and should price their product in a profit-maximizing way and provide what customers will pay for. In most cases there is enough competition to limit what they can do. Competition comes in many forms. Driving instead of flying. Flying to a lower cost city and driving from there instead of paying a premium for a flight to an airport with limited service. Airlines with different pricing and service models like Allegiant, Spirit and Frontier. Shuttle and bus services, both for the whole trip or to augment a cheaper city. And among the… Read more »

Carl
Member
Carl

I think this topic will blow over quickly enough so as to cause no lasting damage to anyone, including UA’s reputation. Airline dorks understand hidden city pricing, and may even occasionally remember to try it. The vast majority of people don’t understand it, won’t want to risk trying it, and it will again become a non issue. The airlines can afford to tolerate a modest volume of leakage due to hidden city ticketing. They cannot afford to have an automated service that makes it high volume. Hence the lawsuit. So long as hidden ticketing is kept low key, it will… Read more »

djsk
Guest
djsk

I think all the publicity is going to make more people try it. I can name 5 friends that had no idea this existed, but now are actively searching, seeing if it “works” for southwest, etc… No one has booked one yet but it’s amazing how fascinating people find this topic.

David D.
Guest
David D.

@ Carl Actually, I don’t even think it’s legal. It just shows how crappy oversight is in this country when it comes to business practices. Think about credit default swaps. With something like that, how does this practice rate on some prosecutors radar?

Nick Barnard
Member

David, Credit default swaps are legal! They’re actually an intelligent tool when used properly, and mimic insurance on money that has been loaned. However they’re mostly used to turn gamble.

I’m not sure what you are calling illegal, but I’m quite sure the lawyers at the airlines are quite comfortable that their pricing mechanisms and carriage contracts are legal.

Andrew
Guest
Andrew

Cranky, I think the problem that the average consumer has with the airline saying “we could’ve sold that seat to someone who wanted it” is that in their mind, they’ve already paid for the seat. If they buy LAX-IAD-BOS, but only fly LAX-IAD, they’ve still “paid” for IAD-BOS, even if they choose not to use it. Typically when you purchase something as a consumer, it’s then up to the consumer to decide what to do with it.

Jason Steele
Guest
Jason Steele

We can of course test United’s theory that the world will end if hidden city ticketing is permitted. Southwest has always permitted it, and I seem to recall fewer (0) bankruptcies there than at United, as well as consistent profitability. While its always tempting to create analogies to other products, the airlines or any other provider of goods and services cannot compel you to utilize the products or services you have purchased, regardless of the terms in their contract of carriage. Consumers can and will always have the choice not to fly all or part of their itinerary they purchased,… Read more »

FlyVC10
Guest
FlyVC10

The airlines can SUCK IT!

David SF eastbay
Member
David SF eastbay

Since just about every ticket is paid with a credit card, when will the day come when the airlines just charge the passenger for the fare difference from what they paid compared to what they used if it would have been higher. That would stop the hidden city issue.

Jason Steele
Guest
Jason Steele

Yes, but they would have to specify those terms very clearly, otherwise it would be an unauthorized transaction. Likewise, travelers could use an alternate method of payment to circumvent this issue, such as cash or prepaid debit cards, when they intend to use a hidden city itinerary. To make this work, airlines would have to require a security deposit, like hotels and rental cars. Imagine a large hold on your card for travel months in advance, to secure against you not flying the whole trip. That wouldn’t go over too well!

Linda Sledehammer
Guest
Linda Sledehammer

Exactly, and the pain and suffering that will come to all of those passengers when after a few months, the hold is still on there and never goes away.

Jehu
Member
Jehu

I think Steel is saying that putting a large hold on everyone’s card to ensure that they don’t take a “hidden city” discount would be impractical. The hold would have to be on everyone and it could be a large amount for a long time period. Therefore, it isn’t likely to be a remedy that an airline would choose. The outcry would (rightly) be loud.

Nick Barnard
Member

Here’s how I expect an intelligent airline (read Delta, Alaska, perhaps the new American) to handle this issue: 1. Track and monitor the issue. Come up with an estimated number of how much revenue this is costing them. 2. If (1) is a large enough number, develop a mechanism (baysian-esque scoring?) to determine which customers might be intending to use hidden city booking. 3a. Contact customers ahead of time with a friendly “Hey we’ve seen that you bought a ticket from AAA to BBB through HHH on flights 523 and 9843. If you’re intending on flying all the way to… Read more »

Jehu
Member
Jehu

I dunno. Airline pricing tries to get each passenger to pay the maximum that they are willing. This is a bit bothersome. Suppose a restaurant charged you based not on which entre, not on portion size, but on how hungry they think you are. That would be ridiculous. Suppose regional rail trains worked this way. If you’re coming from a stop in “rich” suburbia, prepare to be reamed, if the airlines priced the rides. Notice that the lawsuit doesn’t mention (I don’t think it does) throw away round trip tickets. Yet SkipLagged will help you find these too. Reasonable people,… Read more »

Nick Barnard
Member

Your restaurant analogy is flawed. A better example would be a restaurant that charges more for people who eat all courses of their meal at the same table. You could get the same items cheaper if you had your appetizers at the bar, dinner at a table, and ate desert hanging out by the hostess desk. It’d be even cheaper if you order directly from the kitchen, and take the food out to eat. Yeah, why isn’t takeout food cheaper when buying it from a restaurant? I’m not using their tables! This pricing model benefits rich suburbia too! They get… Read more »

Nick Barnard
Member

Oh as for getting people to pay as much as they’re willing: Its a two way street. If people aren’t willing to pay that much the airlines lower their price.

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Carl
Member
Carl

Regional transit systems do try to gouge airport travelers. The SFO BART fare is considerably higher than a similar trip to Millbrae. The NJ Transit fare to the EWR station is far higher than the fare to Elizabeth, which is farther. In Stockholm Arlanda there is a hefty charge to use the airport train station which can be avoided by taking a bus to a nearby suburban station.

Adrian in NZ
Guest
Adrian in NZ

It’s the same in many cities around the world. Public transport fares to/from the airport have a significant price premium. Also, think about the extra fees that ta is and rental car companies charge for airport pick-up or drop-off.

Dale
Guest
Dale

Just about every ticket is paid with credit card but NOT every ticket. Some people do still pay cash, sometimes even at the last minute. I’ve done that more than once.

yyz
Guest
yyz

The problem with charging a customer for not getting on their connecting flight is how do you prove it was not simply a missed flight. Suppose I get off my flight and have an hour to kill till my connection. I grab a quick bite to eat and then hit the restroom where I end up staying longer than I expected and on top of then I go to the wrong gate area. Once I figure out my flight has left without me I decide it’s easier to just rent a car to finish the trip. Should I then be… Read more »

Nick Barnard
Member

IMHO, if you miss a flight for whatever reason, you’d check in at an airline desk or if that is closed, you’d call the airline.

The expectation here would be that you’d be expected to be reaccomadated on a reasonable flight. So basically you’d have to be at the airport after your flight had left.

Trent880
Guest
Trent880

UA’s knack for being tone deaf and making things worse is really going to shine here, when the reality is all hubbing airlines–I’m surprised DL isn’t front and center here as well–depend on preventing hidden city ticketing, and that it actually benefits far more people than it ‘hurts’. That itself would make a pretty cogent argument in support of certain barriers that allow airlines to match supply and demand, and you might even get some traction with the public. Or you can go the UA route and talk about safety…

Nick Barnard
Member

UA is probably the only one with enough bean counters up top to sue..

What really surprises me is that Orbitz and United haven’t gone after technological means.. Skiplagged sends customers to us to buy hidden city tickets, so when a customer comes to us via Skiplagged we’re just going to send them to our home page, no ticket search..

Jehu
Member
Jehu

Actually, Orbitz tried, as detailed in the legal Complaint (available here http://skift.com/2015/01/02/the-real-story-behind-orbitz-and-united-suing-the-hidden-cities-startup-guy/ ). It’s kind of comical, because the kid used what they characterized as an antiquated technique to defeat Orbitz’s attempt to catch a URL redirection. For the techies – he used a meta tag to cause the page to refresh to the Orbitz web site. The kid also punked Orbitz by agreeing to a request not to link to Orbitz, and putting up an error message that indicated he had complied. But, only the folks with an Orbitz internet address (IP address) saw the error. It continued to… Read more »

Nick Barnard
Member

I actually should read the legal complaint.. I got it a few days after it was filed via PACER..

That being said, I think Orbitz and the airline’s best solution here is self-help.

If they wanted to they could require that all requests be signed with a private key by the referrer then being able to deny linking to sites that don’t abide by their T&Cs. This means people can still search manually, but it’d push sites like Skiplagged out, since they couldn’t access the data or link to a specific flight.

Jehu
Member
Jehu

With the meta tag, I don’t think there IS a referrer. It would like just like someone choosing a previously bookmarked page that had a flight query in it. That said, I’m sure Orbitz figured a way to stop it. But all that does is make it harder to BOOK. The site still helps you FIND the flights. Yes, you can do this with other software like ITA and google (one and the same now?), but the pain for United is in people doing this. Using Orbitz to do it is just icing on the cake.

Jehu
Member
Jehu
Oliver
Guest
Oliver

punked? I think it is plain stupidity or naïveté to think that you can fool Orbitz or United by showing an error for their IPs only.

Jehu
Member
Jehu

He did fool Orbitz and they admitted it in the Complaint.

We’ll see whether it is legal to link to another site or not and whether if not, the limitation is due to a prior contractual agreement.

planelawyer
Guest
planelawyer

So don’t do it, “for the good of the industry and the flying public?” Really?? That’s the best you’ve got?!?!? On the few times I’ve done it, competitive fares drove the pricing craziness. The airline flies over its hub to compete with the same flight flown nonstop by a competitor (flights OUT of another airline’s hub, for example) or simple price competition (Spirit can cause this). I agree with the comment about “maths”. There are assumptions built into the existing ridiculous model and some have found the key to unlock it. In the end, if a route isn’t profitable, then… Read more »

professorsabena (@professorsabena)
Guest
professorsabena (@professorsabena)

Simply put the law of unintended consequences applies here. IE this is the result of trying to do something and then something else happens. Normally I would side with the airlines as having the right to impose the rules on whatever product they like. But given the REALLY arcane nature of airline pricing – putting in rules that are essentially unenforceable makes a bit of a nonsense of the whole thing. As a former travel agent we used to use hidden city and point beyond all the time. It worked far better for International travel than domestic. All those ticket… Read more »

Jehu
Member
Jehu

As to why Orbitz joined — good question. I suspect United compelled them. Plus, Orbitz was started by a consortium of airlines. The airlines probably still have quite a bit of say in what Orbitz does.

David
Guest
David

Yea, anomalies happen all the time when people are running “schemes”. You’re going to have a hard time convincing anyone they “cost” the airlines money when they paid for the ticket. It’s their seat whether they are in it or not. The airline got it’s money. The fact that the airline could make money on an empty seat (and hence “lost” money), is irrelevant since that seat was already paid for. It was and is not theirs to sell. Good luck convincing that jury. Now if this was about stocks, the SEC would be all over this scheme, but it’s… Read more »

Nick Barnard
Member

Oy! David, the SEC allows investment banks and other parties to participate in schemes that are much crazier than any airline pricing mechanism.

Wall Street is basically a casino where wealthy traders are allowed to see the cards before everyone else.

southbay flier
Guest
southbay flier

I’m just waiting for the day that someone uses one of these tickets with a roller board and the plane runs out of room forcing the passenger to check their bag to their final destination at the gate. This person will become screwed if they need to get their bag elsewhere.

Nick Barnard
Member

Do all airlines check the bags through to the destination?

When I was on Alaska last it seemed that if your final destination was fulfilled by the flight with full overhead bins they’d check the bag through to baggage claim there.. Otherwise you had to pick the bag up at the gate.

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Oliver
Guest
Oliver

United at least gate-checks bags to the final destination. This’s different from the courtesy cart outside regional jets that have such tiny bins that many carry-one don’t fit. Those end up on another cart next to the plane upon arrival… Or sometimes in the jetway.

LT_DT
Guest
LT_DT

On a recent Delta round trip with a connection through Atlanta, I was forced to check my carry-on at the gate on both ends because I was in group 2 and there was no hope of getting it in an overhead. They checked it all the way through to my destination. I didn’t even think to ask if I could get it back in Atlanta to try my luck carrying on for the second flight. On a more recent United Express flight, on a larger regional jet (ERJ-170), there was no “green-tagging” at the gate but bags that were brought… Read more »

Jehu
Member
Jehu

>Article says, “Meanwhile Skiplagged looks like a hero when, if you read the lawsuit, there are some pretty shady things going on here.” I read the lawsuit here http://skift.com/2015/01/02/the-real-story-behind-orbitz-and-united-suing-the-hidden-cities-startup-guy/ and don’t think SkipLagged is doing anything shady. I don’t think anyone would confuse SkippLagged with United or Orbitz, and if that’s the real problem, all SkipLagged would need is a page that say, “Please click “ok” to be transferred to another website that is not affilated with SkipLagged to book”. I also read the Orbitz contract that SkipLagged signed and I don’t think Orbitz can get them on confidentiality since… Read more »

Jehu
Member
Jehu

p.s. I applaud Crankyflier for its ethics page.

Felix
Guest
Felix

“Southwest has always permitted it”
While there are no cases I know of recently, Southwest no longer states anywhere in it contract of carriage or its customer commitment statement that hidden city ticketing is allowed.

Jehu
Member
Jehu

If Southwest doesn’t prohibit it in their Contract of Carriage then it is not prohibited!

Grichard
Guest
Grichard

Does Southwest’s pricing structure even give the opportunity for hidden-city ticketing?

VectorsToTheILS
Guest
VectorsToTheILS

What hasn’t been said in this discussion is that legacy hub-and-spoke airlines use their pricing power at their hubs to subsidize the cost of service to the less-traveled “spoke” cities. If the airlines abandoned the price model where non-stops to hubs were more expensive than a ticket through a hub, there would be no need to have Rule 6, Section J, Part 1 in United’s terms of carriage as rational, money-motivated individuals would have no motivation to purchase such a ticket. Here’s a real-life example: A certain carrier operates a hub at Chicago Midway Airport. If you want to fly… Read more »

Nick Barnard
Member

Yeah, but that airline often requires that you fly on milk runs across the country.

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J Bird
Member
J Bird

Let say I ran a gym. The week after New Years, I would run the United Special. If you go the the gym at least 52 days during the year, it will cost you $200 for the year. Should you go less than 52 times for the year, it would cost you $1,200 for the year. Since I know that a lot of people that don’t go to the gym make unrealistic new years promises, I bet as a gym owner I would come out pretty good. I would also bet that a court would strike this down on the… Read more »

Nick Barnard
Member

I’d love this gym.. It’d be a great service to motivate me to get to the gym!
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Oliver
Guest
Oliver

What’s deceptive about it?

jeff
Member
jeff

While airlines certainly dont like this, its not passengers they are targeting, its a website that offers an easy way to create a flight that goes against the legally enforceable contract of carriage. Its not worth the time to go after individual passengers who rarely or occasionally drop legs, but it would be worthwhile to prevent a 3rd party for making access to purchasing these tickets.

Jehu
Member
Jehu

Hidden City discounts are getting lots of attention but SkipLagged also finds cases where it is cheaper to buy a round trip ticket and throw away the return than it is to buy a one-way ticket. These round-trip throwaways are also prohibited by United’s contracts of carriage. I suspect United isn’t highlighting these because, while the traveling public might, might buy the arguments for hidden tickets, its is extremely hard to see how a round trip throw-away is a problem. In my opinion, once people see how over-reaching these contracts of carriage are, they will have even less sympathy for… Read more »

Stacey
Guest

I really enjoyed reading this and the comments were great too! You have a really engaged audience Cranky!

Thrasherj
Guest
Thrasherj

Something that comes to mind in today’s complicated need to secure airports. Doesn’t this “hidden city” travel enable a would be terrorist to check a bag to the final destination and then get off the flight safely in another city before the mayhem happens?

I originally thought that this might be a great idea but now I wonder. It sounds like the travelers who do not take advantage of this will be paying for the ones who do.

VectorsToTheILS
Guest
VectorsToTheILS

Technically, the flight to the hidden city could not depart the gate with the non-boarded passenger’s bag on board. Because the airline knows who boarded the flight and whether or not that person checked bag, they are obligated to locate that person’s bag and remove it from the plane if was already loaded.

Jehu
Member
Jehu

Anyone know if they actually do attempt to remove the AWOL passengers baggage?

Of course, for hidden city discounters, they don’t have any lugguage checked anyway and the airline should be able to pull that up in the computer easily.

Nick Barnard
Member

AFAIK airlines no longer do bag matching.

They used to right after September 11th’ before bomb scanning machines were required for luggage. (Some airports didn’t have room for it, so airports like Dayton International had to put it in the checkin lobby.. It was classy.

Airlines don’t want to do bag matching because it delays departures.

Jehu
Member
Jehu

>>Thraherj said, ” Doesn’t this “hidden city” travel enable a would be terrorist to check a bag to the final destination and then get off the flight safely in another city before the mayhem happens?”

No. This is not possible. United’s Contract of Carry clearly prohibits the would-be terrorist from doing any such thing. :-)

75 Guy
Guest
75 Guy

Most of the small follow on cities served by Hidden Ticket Pricing are supported by the Department of Transportation’s Essential Air Service program. http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service This is essentially a per passenger subsidy paid to the airline on a montly basis out of your tax dollars to keep the airlines flying to cities that don’t financially make sense. Congress authorizes it to keep their consituants happy, but we pay for it. So when a hidden ticket price is bought and the hub to small city segment is not used, the airline misses out not on the money the passenger spent, but the… Read more »

Jehu
Member
Jehu

Wow! 75 Guy, that is the best comment I have seen on this subject!

VERY interesting.

Jehu
Member
Jehu

On second thought, I don’t think most hidden cities on United routes are EAS subsidized ones.

The subsidized cities are really tiny.

But the info you provided is interesting nonetheless.

Jehu
Member
Jehu

The small city subsidy doesn’t explain another “ploy” prohibited by United’s Contract of Carriage.

Aside from greed, is there any explanation for prohibiting round trip throw-away tickets?

goldenage mainlinesurvivor brat
Guest
goldenage mainlinesurvivor brat

The hub was not born after or as a result of deregulation. Hubs existed long before 1977. The key outcome of 1977 was “freedom” from regulation. The CAB previously restricted and regulated airfares and routes. Airlines were suddenly allowed to operate at a loss whenever they so chose. Airlines also gained the freedom to lie at will to their customers, without any fear of retribution. Human behavior plus Management greed resulted in a slippery slope that over the next 15 years did away with Braniff, Pan Am, TWA and Eastern. The gems, like Western and Continental, were consumed. All of… Read more »

Jehu
Member
Jehu

Fascinating history, GoldenAge Mainline Survivor Brat!

Based on that, if I were Southwest, I’d think about funding sites like SkipLagged.com.

Acronyms for folks like me that had to decode them:

CAB = Civil Aeronautics Board
CASM = Cost per Available Seat Mile
HCT = Hidden City Ticketing

Any one know when Hidden City Ticketing Prohibitions first appeared in airline (especially United’s) Contract of Carriage? If post Southwest, that would be interesting.

Nick Barnard
Member

Oh I think thats giving Southwest far too much credit.

Sure, this all happened while Southwest was growing, but the 1980s and 1990s were a rollercoaster for the airline business. Lots of things changed.

Southwest really wasn’t a force to be reckoned with in parts of the country until the later 1990s.

goldenage mainlinesurvivor brat
Guest
goldenage mainlinesurvivor brat

Nick,

You don’t know me, and an anonymous voice on the internet is only that. All I can say is, I watched it happen “from the inside”. I’ve been watching the whole thing very closely, since 1972. The inverse distortion of spacetime and geography in airline pricing models was a direct result of LUV’s massive CASM advantage when the legacies began to lose “share” to LUV on certain city pairs circa 1988.

Nick Barnard
Member

What you’ve said contradicts much more recognizable published histories. From what I recall in those histories these fare rules started around the early 1980s as a result of attempting to put the “charter leisure flight” passengers and the business passengers on the same plane. Yes, Southwest was around, and AA, a major innovator in this area, was aware of them. but they were hardly the huge operation they are today. There were many other low fare operations that also forced airlines to adopt these pricing strategies. Air Florida, People Express, Valujet to name a few..

Samuel Augustus Jennings
Guest
Samuel Augustus Jennings

A train ticket from NYP to WAS cost a whole lot more than the fare from NYP to MIA.

Jehu
Member
Jehu

Are you sure? I’m seeing on Amtrak:

New York Penn to Washington DC is $86
New York Penn to Miami is $144

But, if so, we’ll need SkipLagged for Amtrak!

Nick Barnard
Member

Was. As in historically that was the case.

Sent from my computer that moonlights as a phone. Please forgive any misspellings or terseness.

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Cook
Member
Cook

I confess! I do it. In your example, the cost difference is roughly 3.5x. For the hidden city link that I use, (not revealed!!) it is a bit over 4x. For me, that is THREE extra trips for the cost of one, to visit the people that I want to see. Without this option, I could not afford to go. I guess my routing is also fortunate; I live near a major hub from which THREE legacy carriers serve my route. If/when I get ‘busted,’ I change carriers. Do I feel guilty or plan to change my ways? Hell No!… Read more »

David
Guest
David

@CF: “Hidden City Ticketing” is a lie; just a devious misrepresentation of what is really happening: “Hidden Premium Ticketing”. In order to believe in your logic (which you agree is “impossible”), you have to believe that airlines have the right to repossess property you bought from them, and without reimbursing you, resell it for additional money on top of the money they took from you In other words, using your example, if I bought a ticket from LA to Boston, then I own that seat on that flight, including all connections. Whether or not I’m in that seat is irrelevant;… Read more »

Nick Barnard
Member

If airlines did price by cost, like they did back in the CAB days airline fares would be quite expensive.

Airline fares like many products rely on collective pooling of a companies cost divided potentially unequally and billed to a large number of consumers. Many products follow this: Credit Cards, Insurance of all kinds, “Free Checking”, restaurant pricing. There are many industries with high fixed costs that offer discounts to certain customers to better cover revenues.

Joflyer
Guest
Joflyer

@Nick. To respond to you (and an earlier commenter). Your point is excellent and I think it sums up why passengers (of more modest means) find the airline ticketing system so distasteful. I’m limiting my remarks to economy seats. We view flights as commodities, there are certain costs for every step of the way and we expect to pay our fair share. What happens, instead, is that the airline has turned the ticketing process into a street-game of three-card monte. They price tickets on the idea “how much can we squeeze from the customer?” and not, how do we generate… Read more »

Nick Barnard
Member

Well airlines would love to make $100 on that seat, but only if they can sell it quite a bit farther in advance. This is the way they try to filter out people who will pay more. If you’ve got to travel in the next two weeks, you’re going to pay more, because they’ve been not selling that seat for the past 300 days, because they’ve carefully kept the prices high enough to keep some of those seats open for you. But to restaurants. They often ofter the same product at different prices at different times. Happy Hour? There resturants… Read more »

Tree guy
Guest
Tree guy

Here is the bit that is still puzzling me. On the example above, somebody in the airlines pricing section is happy to take a seat on LA to Dulles out of circulation for less than 200 bucks as part of the connecting flight offering. So why not offer some fares, albeit with heavy restrictions, on that flight for that price point. If its a small number and a heavily restricted fare say no check in luggage no changes without heavy extra charge, it won’t effect the high price point business customers.

Andy
Guest
Andy

I just re-read this article, and a couple of thoughts occurred to me: 1. It seems to me that the only surefire way for airlines to put a stop to hidden city ticketing would be to somehow restrict passengers from leaving any airport that isn’t the final destination on their respective itineraries – perhaps, with collaboration with airports, they could consider issuing passengers reaching their final destination an “airport exit pass.” While this may sound like a wild idea, I can think of at least a couple of subway systems that do that (you purchase a ticket for A –>… Read more »

Jehu
Member
Jehu

Andy, The subway exit check is an interesting idea. I think it might be easier for airlines to do this economically. That is, when you buy a ticket that has an intermediate city, the charged price is the larger of the A to B and A to B to C fare. Then, if you go to C, you get a rebate bringing the price back down. On point two, I think that hidden city tickets could destroy the major airlines pricing model. This is why United is going after a 22 (23 now?) year old kid. As an aside, I… Read more »

Nick Barnard
Member

Jehu, I’d be amazed if airlines tried the charge for A to B, then rebate if you go onto C.. People already think airline pricing is complicated enough, that would be even more complicated. IMHO, the best way forward here is for Orbitz, United, et al to properly deploy technological means to limit who is allowed to link. (Sure anyone could link, but it is within the realm of possibility to sign any outgoing link so you can hold your next 22 year old kid liable to the contract for their links, and you can also prevent others from doing… Read more »

Jehu
Member
Jehu

Your technological solution (signing links) is interesting. It might be difficult to pull off because of the affiliates that Orbitz already has. As far as I can tell, to be an affiliate, you get some boilerplate HTML. Add that to your site and wham, you’re in business. If you add the signing, it’s a bit tricky to keep that whole model going. But, suppose that United can prevent direct links? If it is legal to run a search site, then it will still be easy to find a hidden city discount. Booking it is just a matter of punching in… Read more »

Uhg
Guest
Uhg

How is it unfair to the airline to pay them exactly what they’re asking for a ticket that they are perfectly willing to sell? Anyone who defends the airline policies against this practice either don’t really understand what’s going on, or are shills for the airlines. It upsets the algorithms? Really? Then produce better algorithms. Run a better business. This is just another example of disruption of an old, outdated business model that is finally being exposed on a grand scale. This is really no different than record companies complaining years ago about iTunes permitting people to buy single songs… Read more »

David
Guest
David

I suppose the airlines could stop the practice by not allowing carry-on luggage. In some ways I would like that. It would speed up the embarking and disembarking process tremendously.

Mia Rahmanim
Guest
Mia Rahmanim

Does hidden city ticketing work with European airlines? Does Air Berlin allow hidden city ticketing without the risk of flight cancellation of round trip tickets (if I miss the second leg on the way to Europe)?