Airline Sues Passenger, Starts Clamp Down on “Hidden City” Ticketing Used By Many

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The following is via CNN:

A method commonly used by airline passengers to get cheaper fares is at the center of a court row between a German airline and one of its customers.

Lufthansa has taken a passenger, who didn’t show up for the last leg of his ticketed journey, to court in an apparent bid to clamp down on “hidden city” ticketing.

The practice involves passengers leaving their journey at a layover point, instead of making a final connection.

For instance, someone flying from New York to San Francisco could book a cheaper trip from New York to Lake Tahoe with a layover in San Francisco and get off there, without bothering to take the last leg of the flight.

According to a court document, an unnamed male passenger booked a return flight from Oslo to Seattle, which had a layover in Frankfurt. The passenger used all legs of the outbound flight, but did not catch the Frankfurt to Oslo return flight. He instead flew on a separate Lufthansa reservation from Frankfurt to Berlin.

Lufthansa saw this as a violation of their terms and conditions and is seeking €2,112 (around $2,385) in compensation.

A Berlin district court dismissed the lawsuit in December, but Lufthansa’s spokesperson confirmed to CNN that the company has “already filed the appeal against the decision.”

Back in 2014, United Airlines and Orbitz filed a civil lawsuit last month against 22-year-old Aktarer Zaman, who founded the website Skiplagged.com, which helps travelers find cheaper flights by using the “hidden city” strategy.

The case was thrown out in 2015 after the judge in the Northern District Court of Illinois said the court didn’t have jurisdiction over the case because Zaman didn’t live or do business in that city.

(Souce: CNN)




18 COMMENTS

  1. The problem is not abiding by the “terms and conditions” that most people just click or sign without really reading them. They constitute a contract between you and the company providing the service. If you breach the terms and conditions it is a breach of contract.
    FYI: many business credit cards state specifically that they are only for business use – if you use the card for personal use (even if your company is okay with that) the cc company may not be.

  2. I think it’s pretty straightforward.

    It is not important to understand the math. The fact is that the airline’s actuaries have determined that it is profitable for them to sell the flight to Lake Tahoe for less than the flight to San Francisco. This does not affect the value of a flight to San Francisco. When you pay the lower price and take the more expensive flight, you are essentially stealing the difference from the airline.

    Whether it is a technical violation of לא תגזול or not, it is clearly not ישר to manipulate the system in this way.

    The existence of a legal loophole does not (in all cases) necessitate or even justify its exploitation.

    I would imagine that this practice also has a hidden cost in that the airlines probably have to factor this loss into their prices, so it drives the cost of flights higher for those who play by the rules, both to Lake Tahoe and to San Francisco. By doing this, you take money out of my wallet.

  3. The problem is the flight with one stop at the airport where the passenger wants to get off is cheaper than if he took a non-stop to that same destination. Here is an example from American Airlines. Let’s say a person wants to fly tomorrow morning from JFK in New York to LAX in Los Angeles. A non-stop coach ticket on American Airlines leaving at 7 AM costs $579. If, instead he books a coach ticket from the same airline from JFK to San Francisco with a stop in LA, leaving at 8AM he will pay $396.

  4. It most likely falls into g’neivass dass.
    But
    What i dont understand Is why it is in the “fine print”
    If this is a common breach as the airline is claiming, it should be in large bold letters, not in fine print

  5. Catch yourself:
    “I think it’s pretty straightforward. It is not important to understand the math. ”

    I take that to mean that it IS NOT STRAIGHTFORWARD at all. I do NOT in fact understand the math.

    Yes, I do understand that they are unhappy that people are taking advantage of a loophole and are violating the terms of their agreement. But not why it works that way,

    Here is what I am thinking:
    Airline N has X costs associated with taking Passenger Y from City A to City B, and then again from City B to City C. “Straightforward math” would seem to dictate that if Passenger Y decides not to fly the second leg of his trip, the costs to the airline HAVE to be lower, since it it carrying one less passenger from City B to City C.

    It is only once you add in much more complicated factors that it could be understood. I don’t know what they are, but my guesses include:
    Airline N ends up flying the plane from City B to City C with below a certain level of occupancy, which perhaps triggers FAA penalties?
    or more likely:
    They already had other flights from City A to City B, (and maybe even from City A to City C) but were short on passengers going just from City B to City C. They would have had to cancel that route, so they lowered the price (possibly below cost) in order to gain passengers going from City B to City C, and also for anyone opting to go from City A to City C through City B. They had no interest in having passengers go just from City A to City B, since they already had other flights available for that – for which the prices were not lowered.

    So Passenger Y, by taking advantage of their lowered price but only going from City A to City B, did in fact cause them a loss (if the price was below cost.) True, he would have caused the same loss even had he stayed on for the second leg. Maybe even a bigger loss (due to the actual cost of physically transporting another passenger.) But whereas the intended trip was a loss they inevitably accepted, the resulting trip is not.

    So the airline is upset. If it were just one passenger once in a while, they would not care as much. But once there are websites advertising and exploiting the loophole, it becomes a headache for the airline, since it messes up their profit predictions. Even though an individual flight for any specific passenger might not in itself be profitable, they have to be able to manipulate their prices and schedules to end up with a net profit or they can’t stay in business.

  6. CY: Breach of contract is not theft under any way shape of form. Breach of the terms simply allows the other party to reverse the transaction or seek compensation. You are allowed to breach a contract if you are ready to accept the financial consequences. Period.

    And you the customer are not responsible to help the airline or their actuaries achieve maximum profit for their corporate entity when selling tickets. In fact, the entire game the airlines play of overcharging customers who buy a ticket later than other customers, and all the other shenenigans the airlines engage in when pricing, is what you should condemn. The passengers who beat the airlines at their own game are to be commended for their entirely legal and upright ingenuity.

  7. I don’t understand.

    I paid for it. If I choose not to use it why should they care? If I buy a ticket to a concert/show, and at intermission I decide to leave, would anyone care?

    Besides, the airline is saving money if I’m not on the 2nd flight due to (slightly) reduced fuel costs b/c of less weight.

  8. It all depends on the accounting procedure. Airlines measure bums
    on seats.
    If the last leg is half empty
    then the airline considers
    it a loss making flight.
    The airline is entitled to choose how they like to
    account
    What they cant do in the above case is keep changing the accounting procedure to suit themselves.

  9. Just shows that flight cost is not based necesarily on cost of getting to that place, rather how much they can charge people to get there.
    They cant win this. Its a free country

  10. How does the person get his checked baggage off the plane at the layover stop, if the airline doesn’t know that he’s not continuing on to the final destination?

  11. This only works if he person does not check in his baggage but only has carry on. Airlines price competitive routes like NY to LA cheaper than other routes that may be shorter distances like LA to Denver. If you want to fly to Denver from LA and find a LA to NY flight that stops at Denver you may save money using this “hidden” city.

  12. Zion and Out of town, the scheme works with checked baggage if you are traveling from overseas and your first entry point into the USA is not your final ticketed destination. All passengers must collect their bags and clear customs. What they do after that is where the scheme kicks in. One can take his bags and leave the airport and not use the last leg of the ticket.

  13. It is untrue that this only works with carry-on luggage. Case in point: TLV to Dulles via Newark. Fascinating to me that Dulles-Newark-Israel and back is cheaper (up to 30 percent less) than Newark – TLV nonstop. Makes little sense to me but anyways… if you are coming from TLV to Newark and switching planes to go anywhere in the USA afterwards, you have to clear Customs and collect your Baggage and re-check it. So walking out of the airport is just that simple. And many times the small plane to Dulles or BWI is delayed or cancelled so just driving home from Newark is often faster. Plus you can daven in Elizabeth and eat dinner at the One Stop Kosher Mart.

  14. It does technically cause them a loss but to me it seems that also can gain because maybe some people would take flights they wouldn’t otherwise take at all because they found this way to get a cheaper fare. And if it’s still not worth it for them I don’t see how it makes sense they should be able force someone to take the last leg of the flight? So to me it seems that they should just get over it.