It has been awhile since I’ve written an article, but I’ve found the chatter surrounding “hidden city ticketing,” an approach to obtaining cheaper air tickets to be a worthwhile discussion. Orbitz and United Airlines have recently entered a lawsuit against Aktarer Zaman, the twenty-two year old founder of Skiplagged, a website that helps users find cheap tickets by exploiting a method called “hidden city ticketing.” Zaman earlier this year launched a fundraiser to help him cover lawyer fees and has since gained widespread crowd support. Now, the legality of “hidden city ticketing” is a complex dilemma and the ruling on this case could redefine how airlines utilize the hub-and-spoke system.
What is Hidden City Ticketing?
Let’s say you want to fly from San Diego to Cleveland on ByteRevel Airways. It may not be a highly trafficked route, so a direct flight from San Diego to Cleveland may be somewhat expensive. But ByteRevel Airways offers a flight from San Diego to New York, a popular route, that happens to have a layover in Cleveland. The SD-NY route costs half of what the SD-Cleveland ticket costs, so you reason that you could just buy a ticket for SD-NY but leave the route after your plane lands in Cleveland. You pay as if you were traveling to New York, but you leave the plan just before the last leg of the journey. This type of flight arrangement is known as “hidden city” ticketing, where your real destination is in the middle of the flight route you purchased a ticket for and you don’t complete the entire journey.
What is the problem with Hidden City Ticketing?
At first glance, this scheme seems to be a greater hassle for those buying tickets and reneging on the entire journey. You can’t check in bags, or they will end up at your flight’s destination. It’s hard to make the journey a roundtrip, because if an airline notices that you didn’t complete the flight, it’s likely they will cancel your ticket. Similarly, airlines can dock you miles if it is determined that you didn’t complete your flight’s full journey. But why do airlines hate this scheme so much? They still get money from your ticket; it seems as if they are losing an opportunity to make even more money if they could’ve sold your ticket ahead of time.
HCT causes a few issues for airlines. It disrupts an airline’s logistics especially if many passengers are not boarding flights they paid for.
- If a sizeable number of people aren’t boarding a plane, the plane could be delayed.
- Airlines overbook planes (another questionable practice, but it technically helps keep airfares low even if it messes up a flight queue) and they determine how much to overbook a plane by the historical numbers of people who don’t show up to the flight (a dubious statistical method that has more sociological implications than economic).
- An airline could’ve booked that seat but because of the fact someone bought a ticket, they are required to honor that purchase (although they may try to bump you if their overbooking algorithms fail). This last reason also has another economic implication. The airlines are losing a chance to make more money by booking a San Diego-New York route instead of a San Diego-Cleveland and Cleveland-New York route.
So what do you think? Do you think airlines deserve to have these “arbitrage-esque” situations exploited as they already charge overinflated prices for airline travel? Or do you think Hidden City Ticketing will produce more damage to consumers than the airlines, especially if many buyers use this method to quickly traverse short distances?