Airlines hate so-called hidden-city ticketing. They believe it flouts their fare rules and threatens how they do business. But are they being too aggressive as they try to thwart it?
United Airlines wants airport agents to monitor what it calls a “a growing trend” of so-called hidden-city ticketing, or passengers who book cheap fares to cities they do not intend to visit to save money. United is asking agents to cite possible scofflaws to its corporate security department, according to a new internal memo.
Hidden-city ticketing is not new. Sophisticated travelers know they often can save by booking a cheap one-stop flight — say Newark to Santa Ana, California to San Francisco — and getting off at the midpoint. Airlines have long hated it, saying it violates their contract of carriage. If a customer buys a ticket to San Francisco, they say, the customer must fly there.
“This practice can potentially offer discounts on airfare and [is] not aligned with United’s contract of carriage,” the airline told airport customer service workers. “As the practice grows, we need to ensure that we’re both supporting our customers and properly enforcing the contract of carriage rules and United policies.”
This growth comes as websites commercialize the practice. Most famous is Skiplagged, a site United unsuccessfully sued four years ago, which helps consumers find advantageous hidden-city legs. It’s still a niche operation, but earlier this year, Oliver Dlouhy, CEO of Kiwi, a large online travel agency, told Skift his site might follow.
United is not the only carrier trying to thwart the practice. Many carriers monitor repeat offenders and at least one — Lufthansa — has filed suit against a passenger for it. Airlines argue they price tickets based on origin and destination, saying the fare system breaks down if passengers can get off in the middle of their trip without repercussions. Others, like Skiplagged founder Aktarer Zaman, say customers who buy tickets can do whatever they want with them, including stopping the journey earlier.
In an email, United spokesman Jonathan Guerin said hidden-city ticketing violates United’s rules. “It is against our ticketing policies to purchase an additional segment with no intention to fly,” he said.
He added United sent the memo, “to provide a reminder to our employees about how to address issues that arise when customers purchase hidden-city tickets and travel with checked baggage.”
For airlines, hidden-city ticketing has two problems.
First is lost revenue. It depends on the route, but passengers can save considerable money by repeating the practice. Last year, the blog No Mas Coach! published one letter United’s corporate security department had sent to a passenger, accusing the person of buying 38 hidden-city tickets in a multi-year period and demanding restitution of $3,236.76 for lost revenue.
If the person did not respond within 10 days, United said it could take several actions, including referring the matter to a collections agency, canceling the person’s loyalty account or banning the person from United, the letter said. The Points Guy noted in a recent story that American Airlines sometimes sends similar letters to customers.
Tom Bacon, former vice president of revenue planning at Frontier Airlines, said money lost from hidden-city ticketing is probably not material, considering United made more than $41 billion in total revenue last year. Still, he said, airlines may have a “few real abusers” that they’d like like to catch, which is why they periodically remind airport workers to monitor fraud.
There is a second challenge. Customers who unwittingly buy hidden-city tickets through Skiplagged may not know what they’re buying, and may check bags to their final destination. In that case, they’d get off in the middle of their itinerary but the bag would go on. (Skiplagged warns customers not to check bags on its website.)
United then must fly the bag to where the passenger is, at its expense, so the customer can pick it up. When that happens often, it can cause logistics challenges for the airline. It can also annoy passenger who do not know why their bag didn’t follow them.
Kiwi’s Dlouhy brought up the bag issue earlier when discussing why the site hadn’t yet sell hidden-city tickets. He said he feared customers wouldn’t know what they’re buying, so they would check bags and get caught.
Agents Told to Be Careful
Since the Dr. Dao incident in April 2017 — that’s when United airport agents in Chicago called security officers who dragged a passenger from an overbooked airplane — United has asked its employees to use care when confronting passengers.
In this updated guidance, United is asking its employees to understand a customer’s predicament before making accusations of hidden-city ticketing. “Ask questions and understand the customer’s situation,” the memo said.
Perhaps, United said, the customer needed to get off early because of a medical situation. Or maybe the passenger decided to change plans because irregular operations like a canceled or delayed flight made it impossible for the customer to continue.
But if that’s not the case, United said, agents should alert the airline’s corporate security department.
“Our priority is to safely get our customers and their baggage to their final destinations, so always try to understand the customer’s situation and avoid confrontation when handling hidden city ticketing instances,” the memo said. “Corporate security is better positioned to follow up on the situation and taking appropriate action to ensure customers are following contract of carriage rules and United policies.”
But Charlie Leocha, president of Travelers United, a consumer rights group, said in an email that that carriers should focus on making their bookings more transparent rather than going after violators.
“I have no sympathy for the airlines,” he said. “They have created this airfare mess and have to live with it. The more that passengers get away with the hidden city bookings, the better, as far as I’m concerned. But, passengers should remember that airlines can be vindictive and get back at creative passengers by canceling frequent flier miles and by canceling future reservations.”
Have a confidential tip for Skift? Get in touch
Tags: united airlines
Photo credit: United Airlines is asking airport agents to watch for the "growing" trend of customers buying hidden-city tickets. United Airlines