You've probably already read the press-clippings about the hidden city ticketing debacle going on between United Airlines, Orbitz and their business rival, skiplagged.com. If you haven't, that's alright, here's a brief summary. A 22-year-old tech whiz, Aktarer Zaman, created a web service that helped travelers save money by providing links to hidden city airfares, and now United and Orbitz have engaged in a joint lawsuit, suing Skiplagged for violating their terms and conditions and in effect cutting into their profit margins. The reason Orbitz has decided to join in on the lawsuit is because skiplagged.com was linking to Orbitz' services to monetize its fares, causing Orbitz to unintentionally sell a bulk of hidden city tickets, consequently breaching their contract with United Airlines.
What is Hidden City Ticketing?
Despite this travel strategy having been around for what seems like an eternity, many people are just discovering it now amidst the media flurry surrounding skiplagged.com. So if you're just hearing about this now, here's what's going on: A direct, non-stop fare from New York's JFK airport to San Francisco's SFO may be $800, but a fare on the same airline from JFK to Portland's PDX with a layover in SFO may be only $400. So instead of booking the more expensive direct flight from JFK to SFO, some may be inclined to buy the discounted JFK to PDX fare, and just get off at SFO - ditching the last leg of the flight.
This method is by no means universal, and can take a serious investment of time to find price discrepancies like the example written above. Skiplagged.com streamlined the task of identifying these secret lower fares, and provided links to purchase said fares from Orbitz via United Airlines. At the time of writing, skiplagged.com is online, but not providing airfare purchasing assistance while the legal proceedings are in play.
Sounds like a Smart Idea, What's the Catch?
Known in the airline industry as "point beyond ticketing," hidden city ticketing is expressly forbidden in most airline company ticket contracts. So when you purchase an airline ticket through a middle-man service such as Orbitz, or directly through United Airlines, you are agreeing to abstain from such practices - hence why United is suing skiplagged.com and its founder, demanding reimbursement of revenue lost to providing consumers with direct-link access to hidden city fares, effectively breaching contractual obligations.
Not so Fast! Are United and Orbitz Belly-Aching over Nothing, What's the Deal?
Airline companies, and travel brokers like Orbitz seem to be drumming up controversy over what some may feel is merely a bunch of malarkey, but before jumping to conclusions, let's take a look at why these companies detest hidden city ticketing so much, and why they don't want to just write it off as a "cost of the game."
The reduction of revenue is far and away United and Orbitz' primary motive for seeking legal action against skiplagged.com and its founder Aktarer Zaman, though this shouldn't come as much of a surprise to most, as we live in a society dominated by money-lust, and at the end of the day, the primary goal of every company in existence is to make money - hand over fist.
On a more technical level, the intentional booking of hidden city tickets seriously hampers the organizational efforts of airline computer programs, leading to a number of scheduling and pricing mishaps for other consumers. Here's an example: Airline companies regularly overbook flights under the assumption that a fair percentage of passengers will no-show their flight, according to the airlines this allows them to keep fares lower. Going back to our JFK to PDX example, if a significant number of passengers don't show up for the last leg of the ticketed journey - instead leaving the airport at SFO - it means that the seats on the last leg to PDX will be left unused or un-sold, forcing the airline company to overbook more passengers, potentially miscalculating the availability of seats on a particular aircraft - causing delays, bumps from first-class, and an overall scheduling/organizational nightmare.
But Wait, Why Should I Care About This? Sounds Like Their Problem, Right?
Wrong. Hidden city ticketing can cause problems for the consumer-base as well, and as much as we all want to save a buck here and there, the consequences aren't always immediately tangible.
If a large percentage of airline travelers decide to book hidden city tickets on the JFK>SFO>PDX route and get off in San Francisco, anyone else trying to find seat-availability from SFO>PDX will see that there are very few remaining seats for sale, even though the plane is basically empty from passengers disembarking at SFO. The airline computer systems will see that the last leg from SFO>PDX is nearly full and can increase prices to accommodate for the demand fašade, forcing other customers to pay astronomically high prices for a journey that is normally quite affordable.
Beyond the many fare complications to be caused by wide misuse of hidden city ticketing, the strategy can backfire for those attempting to use it, as bags can't be checked or they'll end up all the way at the final destination. Also, if your plane suddenly gets rerouted due to inclement weather conditions while you are using a hidden city fare, you may no longer be passing through the connecting location you intended to disembark, stranding you somewhere else unintentionally.
The Future of Hidden City Ticketing
Regardless of where you find yourself on the ethical dilemma that is hidden city ticketing, the outcome of the lawsuit brought on skiplagged.com and its founder is still in its infancy, and as the first legal battle of its kind, the outcome will set a national precedent going forward as to whether the practice is acceptable.
Until the verdict is announced, it's safe to assume that more and more people will be purchasing hidden city tickets, which could lead to a number of preemptive outcomes, including the elimination of hidden city fares by airlines and subsequent fare-hikes across the board, or maybe even increased regulations by the airline companies to police passengers more effectively and enforce the contractual obligations agreed upon by purchasing tickets. Either way, it seems like a bleak situation in which neither the consumer nor the retailer can really win.