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Skiplagging: The travel hack hated by airlines is now the subject of a lawsuit (abc.net.au)
57 points by adrian_mrd on Aug 26, 2023 | hide | past | favorite | 78 comments



The airlines can get all worked up about it, but there's no way they can stop it. (At most they can see a passenger doesn't make their connection the majority of the time and impose a penalty fee after so-many missed connections; but then they'll juse lose any revenue from that passenger.)

And why should they care? I paid the full price of the ticket. What's it to them where I get off?

Sure they might think they can sell me food or drinks in flight or annoy me with their stupid branded credit card on every single flight, but the fact is I paid for the seat. If I don't show for my initial departure flight, they don't get worked up about that. Why is skiplagging any different?

Because they want to make more revenue by making it more expensive to fly to my intended destination? Well... don't do that. This is the natural, economic response to their pricing games. If you make it a game, people will play the game. Don't cry when you can't win 'em all, airlines.


If anything, wouldn't they be saving on the fuel costs of not transporting you?

Alternatively, the airline may be able to have another paying passenger fill the empty seat.


They are already overbooking the seats and have a list of standby passengers to fill it. They have already optimized this problem away, to the detriment of passengers in many cases!


Yep - a quite famous UK author was complaining on Twitter the other day about losing his seat as the plane was oversold. https://x.com/beathhigh/status/1694689915718512942


Is empty but is already paid. That's what I don't get here. I can buy two seats, one for me and one for my imaginary friend, and the airline won't get less money. But it seems that they dream about selling the same seat twice.


The problem is they don't price flights based on cost, they price flights based on a model showing the most popular routes and recoup costs on losing flights by jacking up the price of the more popular ones. Layover flights are less popular.

The issue of skiplagging is obviously the direct result of their pricing model. And I don't see a solution for them, direct flights will always be more popular than layovers, and so more in demand. They are stuck in the position of doing what they do, or dealing with demand they can't meet with by pricing based on fuel cost instead of demand.


So why don't they just simplify their pricing model? It's highly confusing.


> impose a penalty fee after so-many missed connections

Even that might be dicey in a lot of jurisdictions, both based on aviation tariffs, and consumer protection laws.


They could give a "partial refund" for "not missing" your connection or, in plain language, make people pay an amount up front any time they have to make a connection and keep it as forfeit if they skiplag. That's obvious enough the airlines would be doing it if this skiplag stuff really bothered them.


If I were to guess it’s the lost of potential revenue, that empty seat could very well mean another traveler from the middle stop to the final stop, which they could sell for more than the original layover traveler.


So let me tell you I won't make that flight and give me $10 back while you can resell it. The pricing scheme here is the problem, not the way it's being used. Unless they're being reimbursed by the destination cities for the number of people disembarking from each flight, there's nothing about the final leg that makes them money.


Well yes, but that is very much their problem. The "lost revenue" is the direct result of their own pricing structure.

Their circus, their monkeys.


They also save by not refunding an oversubscribed seat too. Win win win for airlines.


> The airlines can get all worked up about it, but there's no way they can stop it.

They might be able to greatly reduce it. If they wanted to discourage people booking A->B->C and then leaving at B they could start randomly picking an A->B->C flight and not selling A->B tickets for that particular flight, so that everyone onboard has booked A->B->C.

Then after everyone has boarded announce that the flight has been upgraded for free to direct A->C.


They can’t do that. It’s not a bus. There is a ticker for each flight and they buy spots at airports. Even if they can do it, it is a change of flight and would probably open them to other issues (like refunds).


I strongly doubt airlines can change flight plans after everyone has boarded.


While not quite like that, the airline could totally "upgrade" your specific ticket to A-->C, or A-->Z-->C, and then you have a problem.

Or even a later A-->B segment that still gets you to C on time, which may not work for you.

This isn't really unlikely because the airline knows your desired A-->B trip is really valuable (which is why you skiplagged in the first place!).

One reason airlines like selling flights with connections at a discount is because it gives them flexibility to get you to your "C" destination on time.


This is why I can't see myself buying skiplag tickets.


I remember this time in Asia I booked a flight to go back to Japan. I got Covid, so had to cancel the flight (the company considered I had to cancel the flight, not that they would not allow me in, as per their TOS).

This company had no-refunds for the flight I purchased, and I confirmed with a rep that I was never going to get the flight money back, no matter what I did, even if I cancelled.

It also costed money to cancel the flight though! And even then I would not get the money back. So the "cheapest" option was to watch my date come and a seat go empty. Which is really absurd, had I been allowed to cancel (for "free") even if I didn't get my money back it'd have been a big win for the company which could double book their now free seat and still get the money.

I should probably have pursued it further, I'm 100% sure the whole ordeal would have breached multiple regulations back in Europe, so probably in Asia too, but with Covid and I had just had a motorbike accident wasn't in the mood to fight it.


> had I been allowed to cancel (for "free") even if I didn't get my money back it'd have been a big win for the company which could double book their now free seat and still get the money.

don’t worry they 100% sold the seat if the flight was at capacity. flights are always overbooked, and if everyone shows up they offer money until someone takes the offer to get on a different flight


I wonder if that was true, for over 1 year, including my anecdote, I loved flying through Asia because flights were always at half capacity, at best. Which might actually explain why they didn't care about cancelling though.

I've also noticed incidentally overbooking seems to be a common occurrence in the USA, but I've never seen it in EU/Asia (not that it doesn't happen, just that it seems a lot more common in the USA).


Asia has much less regulation than the EU or even the US. Interestingly, the service is kinda okay and very cheap because they care more about the reputation and repeat-customers. Given the prices airlines like AirAsia flies with, I’d say they beat the US/EU by a wide margin.


> It comes after the airline barred a teenager from boarding a flight in the US after airport staff discovered he was planning to disembark at his stopover city.

Isn't that like, criminal interference in the welfare of a minor?


I think airlines actually face a lot of liability around the transport of unaccompanied minors--what if they lost the kid? The few times I traveled unaccompanied as a minor, the flight attendants were always checking in on me, knew my itinerary, etc. My parents had to come to the gate and the airlines would not release me to anyone else nor let me wander off.

From that perspective, they face huge downside if they fail to convey a minor to the contracted final destination and then the minor goes missing. A minor who announces the intention to wander away not according to plan sets off alarm bells in someone who has this perspective.


Seems reasonable to refuse service. Entirely and fully in their rights as it should be. This person was not going to fulfil their side of contract that is travel to end destination. So service was refused. And it wasn't under any protected class.


A contract is based on the exchange of value. The value coming from the customer/passenger is the dollars for the plane ticket. Nothing more or less. There is no value in warming a seat for the last (or any) leg of the flight. Therefore, that cannot be regarded as a contractual obligation.


Uh, the airline did not pay the passenger to travel somewhere. holy shit the mental gymnastics to figure some way to pretend that something isn't absurd.


Here is more

> The plan was for the teen to get off the plane in Charlotte where he lives, his father told local television station Queen City News, but before he could board his flight, he was stopped by gate agents and taken to a room.

I find it interesting that no one finds this extremely disturbing. This a staggering abuse of laws to make use of state/federal officers (armed guys) for something very trivial; and the icing on the cake is that the target is a minor.

The idea is that the USA is the land of the free is eroding faster than the North Pole ice.


"It claims the website improperly acts as a middleman, "inserting itself between American [Airlines] and flight consumers", and promises to deliver savings, but often charges consumers more than if they had booked a ticket directly with the airline or an authorised agent."

Authorised agent? What does that mean? As far as I know, all the flight search engines use the ITA matrix service (https://matrix.itasoftware.com/). Are they saying that's not a legitimate business? My point is, how is skiplagged different than the other search engines other than offering the hidden city ticketing option?


I didn’t read the whole pdf, but it sounds like they’re saying Skiplagged pretends to be the the user and goes to aa.com on their behalf and purchases the tickets ? Personally I haven’t used the skiplagged website, but wondering why it would do that vs just outputting you an itinerary like “Here, book this itinerary with whichever booking agent you want”

Now I’m wondering if when they say “promises to deliver savings, but often charges consumers more than if they had booked a ticket directly with the airline”, they mean booking the skiplagged ticket via their website vs skiplagged, and not vs price of direct flight…

Btw you also can’t book anything with ita matrix, that’s only a search engine. After finding an itinerary you need to take the fare construction code and provide that to an iata accredited agency who can then input the booking into the GDS.

But yeah screw the airlines here. And the irony of them claiming skiplagged has “deceptive ticketing practices” They should figure out their pricing models if they’re unhappy people are exploiting their game.

https://storage.courtlistener.com/recap/gov.uscourts.txnd.38...


Good points. I dug up a few other lawsuits but didn't have the patience to decipher them or find out more about their context and what happens after.

www.govinfo.gov/content/pkg/USCOURTS-ilnd-1_14-cv-09214/pdf/USCOURTS-ilnd-1_14-cv-09214-0.pdf

https://skift.com/wp-content/uploads/2021/07/1-main.pdf


So, I just went ahead and tried it for a sample flight: a 1-way JFK-LAX-(SMF) DL305 departing at 5:00pm Aug 31st, Economy.

Skiplagged: $219.10 = $184.20 (ticket price) + $34.90 (Skiplagged Service Fee)

AA.com: $184.20 = $148.84 (base fare) + $35.36 (taxes, fees, charges)

So, honestly, that's kinda not cool from Skiplagged. They're basically charging you an extra $34.90 which goes to them, even though you can buy the exact same ticket on AA.com with minimal effort, but the checkout page doesn't show that.

I get that whoever made Skiplagged wants to profit out of it, but it does feel a little bit dishonest. I dislike subscriptions, but I think a per-month subscription access to their search-engine would "feel" better here, at least for me.


So it seems the strategy is to search there and buy elsewhere


Also, if AA doesn't like it, can't they just demand to be unlisted like Southwest, for example?


I'm pretty sure they pay to be listed. Southwest doesn't want to pay, that is why they aren't listed


Not true according to https://www.nerdwallet.com/article/travel/why-southwest-not-... but it was nice of you to be overconfident


This sometimes works with trains in Europe too.

I discovered once through Seat 61 that if you want to travel from Amsterdam to Berlin, it's cheaper to book the train all the way to Prague. You can just get off the train in Berlin.

I did this a few years ago, but ended up going to Prague anyway.

https://www.seat61.com/


Yes, I used that strategy in Germany a couple of years ago, but I think the Deutsche Bahn changed their fare structure so it stopped working there.


Buses too in Canada. The bus from Toronto to Ottawa would cost more than the bus from Toronto to Ottawa to Montreal.

Had to do with in-province fares being tariffed and set in advance, while inter-provincial fares were free-market.

Technically illegal for the bus to drop you off in-province, but they can't really stop you.


Related:

American Airlines sues travel website Skiplagged over ticket price ‘loophole’ - https://news.ycombinator.com/item?id=37202856 - Aug 2023 (40 comments)

American Airlines barred teen for 3 years for "skiplagging" claims his father - https://news.ycombinator.com/item?id=36779893 - July 2023 (1 comment)

Teenager detained at airport after trying to use “skiplagging” trick - https://news.ycombinator.com/item?id=36701669 - July 2023 (78 comments)

Teenager ‘taken to security room and interrogated’ for throwaway ticketing - https://news.ycombinator.com/item?id=36684460 - July 2023 (151 comments)


A greedy airline is mad because they can’t be greedy enough! That’s basically it, if the tickets were priced properly and fairly, this wouldn’t be an issue to start with.


Imagine you go to a restaurant and order a menu because getting the menu is cheaper than just the entré and mains, and the leave before eating the desert and the restaurant is telling you that not eating your desert is against their terms of service!

The former airline executive considers it imoral? Give me a break the only thing the airlines want is that they keep an information assymmetry for determining price, they are allowed to play all the tricks to optimise the price but somehow consumers don't? If anything is immoral (and should be illegal) it is terms of service that disallow this.


Ha, that's not too far off how some places work now.

I remember a friend getting into a huge argument with a girl behind the counter at a fastfood joint. He wanted a burger and fries and no drink, but the girl said it's cheaper as a combo with the drink. He said he doesn't want the combo because he doesn't want the drink. She's saying but with it it's CHEAPER! Just take the drink! He's saying I don't want the stupid drink, if you give me the drink I'm just dumping it in the bin! She's getting annoyed and saying but it's CHEAPER with it, take the damn drink! He's getting frustrated and says fine give me the combo and then YOU keep the drink - she says they can't do that because then its not a combo! He's now yelling what the hell is the difference, just charge me for the combo and keep the drink, and she's yelling but then it's NOT THE COMBO, YOU HAVE TO TAKE THE DRINK!

We eventually had to calm them all down and I think someone else took the drink haha.


That's hilarious. Both the employee who is so eager to give the customer a better deal and the customer who is so intent on not getting additional, effectively free, product.


I had a similar dilemma a few years ago when I moved to another country.

The round trip was about 1000€, but the one way trip about 5000€, which is just bullshit.

I would bet that as for skiplaggers, many people just get the round trip and never show up for the return one. Rather than a morally dubious choice, I ended up finding a one way ticket with Aeroflot for 700€, where I had a terrible experience that I'd rather not try again.

As a customer, I hated to be forced into this choice, especially for obviously complete nonsense like this.


I have absolutely no sympathy for the airlines. As I write this, I’m in the process of suing a well-known Canadian airline for lying about conditions leading to a flight cancellation. Unfortunately this is not a rare occurrence based on the forum I participate in.

Point being, they can shove their terms and conditions. They can start by following the law.


The exemple of the bottle of milk is not complete : it's like a bottle of milk cost 5$, but a bottle of milk and a Mars bar is 4$. You take the bottle of milk and the Mars bar and as you are on a diet, you leave the Mars before the shop. How is it illegal?


Why is the direct flight to LA more expensive than the flight to San Jose with a stop in LA? You'd think the price for the San Jose flight would be the price of the LA flight plus the price of the LA to San Jose flight.


That's when greed meets reality. Except for reading this through the prism of maximizing profit, it makes absolutely no sense.

They will pay extra landing fees, burn more fuel, fly further, and have one more cycle on their very costly engines to bring you from A to B, so by all metrics, it should be more expensive.

But hey, people are "willing" to pay more for the direct flight, so why not charge them as much as they can, while suing the skiplaggers for "costing" them money..


The airline probably sets pricing based on a model that predicts the maximum amount of profit based on supply/demand, popularity etc.

Similar reason I can get a flight from London to Rome for £20, yet Sydney to Queenstown is a minimum of $300.


There’s an interesting blindness on a forum full of tech workers to the idea of market pricing being divorced from COGS. That’s kind of the whole premise of our industry.

Don’t get me wrong, I don’t think skiplagging should be a crime or anything. But I also think the airline is well within their (legal and moral) rights to prohibit it contractually and to enforce that prohibition.


I don’t get it. How can multileg flights be cheaper than single leg flights? Is the system optimizing for length of travel?


In the example given in the story, the kid was flying from JAX to NYC with a connection in CLT (one of the larger AA hubs). In that case, AA probably priced the flight to NYC lower in order to compete with some rate that United or Delta was offering. A "normal" flight to CLT might be a lot more expensive - but it's artificially marked up with a hefty profit. Now American Airlines is whining because they can't squeeze profit out of every passenger because people are doing this. They claim it's against their terms of service... but screw that noise.

I think it should be illegal for them to bar skiplagging. I hope lawsuit blows up in their face and the FTC and Consumer Protection step in to bar airlines from fighting it.


Exactly, they can eliminate the problem by just making the ticket prices make sense.


Especially 1-way fares when they cost way more than half a round-trip. That triggers people into skiplagging, especially when it opens up a route to a competitor that doesn't overcharge for 1-way fares.


It's "explained" in the article. Trips from one large hub to another are in high demand, so the price is high. Trips from a large hub to a small place are in low demand, so the price is lower. The main defense is "the pricing model is complex."

But it's clear for all to see that it's nonsense. First, complexity is no defense for anything. Second, the resource utilization is strictly higher in the skiplag case: the demand on the first leg is the same, so demand can't be justification either.

If the price for a multi-leg trip can be lower, that must be because the earnings on the second part of the trip outweigh the loss on the first part. That would also mean the single leg passengers are subsidizing the remaining legs.


It's simpler than that. AA offers an inferior product for flying from Jacksonville to New York City, because they don't have the non-stop flights that their competitors do. So they have to discount their flights to be competitive.

Meanwhile AA is the only airline flying non-stop from Jacksonville to Charlotte. They offer the best product there, and charge accordingly.

Products aren't priced according to their cost to produce, they're priced according to what the market is willing to pay for.


> they're priced according to what the market is willing to pay for.

Wouldn't then the skip-lagged price be the asking price?


No, because the market would (allegedly) pay more if the option didn't exist. Which is why they're trying so hard to stop people from doing it.


Something they know about the destination makes them expect you to be less price-sensitive, so they charge a higher price despite lower costs. A competitor should eat their lunch when they do it, but there don’t seem to be enough.


They add a big premium onto the price of a direct flight, regardless of where to.

Check prices for flights from Paris to Martinique and to Guadeloupe. Each will cost about $1000, with a layover on Guadeloupe or Martinique, respectively. Or, you can pay $1500 for a nonstop to either one.

That $500 buys you the avoidance of 3 hours of your life switching planes at airports.


From the article. most people prefer to avoid stopovers so there is more demand for a direct flight from point A to point C, pushing the price up.

Since there is less demand to fly from point A to point C via point B, the price point is lower.


That explains why A->B->C costs less than A->C, but for skiplagging to be worthwhile we must also have A->B->C costs less than A->B.

What would make A->B more expensive than A->B->C?


It's got nothing to do with incurred cost. Goods and services are not priced at cost + margin, they're priced at whatever the market will bear.

A->B is a higher demand ticket than A->B->C, so the market bears a higher price for that ticket. By getting off at B, the traveler has "stolen" the difference in those two prices from the airline, as the airline would have charged the skip lagger or another direct flight customer a higher price.


Good use of quotes there - a market participant exploiting an inefficiency steals nothing.


Ya it's an interesting economic puzzle, given the unique nature of the airline business.

I think ultimately the incentives work out to exactly where we are, airlines will simply ban travelers from their services when skiplagging is discovered.

There's no reason to offer services to travelers who pay less.


Subsidies?

Quite a few smaller cities offer subsidies to carriers to bring traffic to their cities. Those same cities might not be happy when travelers use the subsidies to go to the big hub for cheaper and instead. It might even be contractually agreed that the carrier has to make sure they go where they're supposed to, thus the rules we see.


A subsidy big enough to pay for the entire B->C ticket?

Why even involve other routes at that point, offer $20 or $0 service on that link.


A few reasons, that can make direct more expensive operationally & lower demand, respectively:

1) Longer voyages use less fuel as a multi-leg because aircraft don't have to load as much to make the full flight direct. See: "intermediate stop operations". Those 15h and 18h flights are really bad for fuel efficiency, and they can't carry as much cargo. That's a reason Asia<->USA cargo flights frequently stop in Anchorage Alaska. They're also more complex for staff (can only fly so many hours at a time, need to carry relief pilot(s) after X hours)

2) Sometimes transiting a particular country is difficult, so that routing would have lower demand. Sometimes I fly from Paris-USA-Toronto, and that incurs extra headaches (visas, ESTA, luggage restrictions (e.g. food)) that many avoid.


The prices are set by the market (ie: the other players). If there is only one airline that does Charlotte direct for $500, then AA is going to price its flight at $490.

The cost of the flight is irrelevant.


How would that cost them money? The ticket is already paid, whether the passenger goes on the flight has no effect.


The issue is they would charge you significantly more for the direct flight to the stopover location.

It's a pricing model that works by charging for what people are willing to pay, not the costs incurred.


In some international cases, it creates tax/airport fee problems. Sometimes transit passengers pay less. Whether that's an airline or passenger problem probably depends.

edit: I actually can't find any examples of "airport taxes" being levied on arriving passengers that are different than transit passengers. The differentiation only seems to be between departing & transit passengers)

Meanwhile, other countries let you get a tax refund on unused flights and airlines probably hate that paperwork


Yes, but that's not costing them money. It might be lost revenue, but that's different. There's no guarantee that I would buy the ticket at all if the full direct flight price was the only option.


The airlines’ pricing irrationality is akin to the https://en.wikipedia.org/wiki/I486SX where it cost Intel extra money to disable the floating point unit.


> Businesses argue the practice amounts to fraud because customers are purchasing flights they don't intend to travel on

I got a set of pots and pans because it was cheaper than buying them individually, but I never intended to use the double boiler. Is that fraud?


Simple problem, simple solution: charge the appropriate value for the flight.


Airline pricing is clownishly bad




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