American Airlines Sues Skiplagged, Alleging False Savings Promises and Deceptive Practices

After lawsuits over the years by United, Orbitz and Southwest, American Airlines has joined the fray and filed a federal lawsuit against “hidden city” flight provider Skiplagged, charging copyright infringement, deceptive practices and “other misconduct.”

In a lawsuit with similar allegations, American in July also sued Czech Republic-based online travel agency Kiwi.com. It likewise sued Dallas-based air travel consolidator GTT Travel, alleging fraud and mishandling of contracted sub-agencies.

In the Skiplagged lawsuit, filed last week, American alleged that Skiplagged sells its flights and uses American’s intellectual property without authorization, misleads flyers with deceptive offers, and harms the airline’s operations by counseling passengers on best practices to get away with surreptitiously deplaning at stopovers instead of continuing on to their ticketed final destinations. (You can view the lawsuit embedded below.)

“Skiplagged’s improper actions have caused American considerable harm,” the complaint said. “When things go wrong with tickets booked through Skiplagged, American gets blamed, even though those problems are the direct result of unnecessary complications caused by Skiplagged’s improper practices. Further, Skiplagged’s liberal and unauthorized use of American’s protected intellectual property suggests falsely that American is working with Skiplagged, authorizing its activities, and will assist customers when Skiplagged’s practices harm customers. American then loses more revenue when it tries to help solve its customers’ problems that Skiplagged created.”

Charging violations of its Conditions of Carriage and the Lanham Act, the Fort Worth-based airline seeks a preliminary and permanent injunction against Skiplagged’s practices, and “damages, including disgorgement of Skiplagged’s ill-gotten profits.”

Asked to comment on the lawsuit, Aktarer Zaman, founder and CEO of the 8-year-old company, stated: “Skiplagged will fight to the end to protect consumers’ rights to find the most favorable airfares and we will prevail.”   

In 2015, in previous litigation, a judge in Chicago tossed United’s lawsuit against Skiplagged for a lack of jurisdiction, and Orbitz and Skiplagged reached a settlement with Skiplagged agreeing not to link off to Orbitz or to display its trademarks. Southwest likewise reached an undisclosed settlement with Skiplagged earlier this year. Skiplagged no longer markets Southwest flights.

Hidden City Bargains

While Skiplagged sells standard one-way and roundtrip flights (read more about it below), where the passenger deplanes at the ticketed last stop, it is renowned for offering hidden city flights, where passengers looking for a bargain get off the aircraft at a layover.

American cites one example promoted by Skiplagged where a traveler wanting to deplane in Cincinnati was promised a $7 savings – a $169 fare for a Charlotte-Cincinnati-Chicago flight versus a $176 airfare for a direct Charlotte-Cincinnati flight on AA.com. But, the lawsuit claimed, the traveler would end up paying $9 more on Skiplagged, or $185, because of a 10% service fee.

“The very basis on which Skiplagged touts its market disruption ends up being a complete lie,” American alleges in the lawsuit.

In this example, the travelers would have been ticketed all the way to Chicago, but would have deplaned in Cincinnati in trying to get a bargain fare.

Hidden city flying comes with numerous potential hassles. You can’t check luggage because you’re not continuing on to the final ticketed destination. Skiplagged encourages flyers to bring only a backpack that would fit under the seat because of the risk the airline could check your bag at the gate. You also have to hide your intention from the airline to deplane at the layover, and you risk having your return ticket cancelled and being banned from the airline if discovered.

But hidden city flying indeed can provide bargains — contrary to American’s statement.

On Thursday Skiplagged was offering an American Charlotte-JFK-DCA flight (the flyer would deplane in New York instead of continuing on to Reagan National in Washington, D.C.) in a main cabin seat for a $231 total fare. Skiplagged’s pledge of “$127 off” was accurate. American offered the Charlotte-JFK direct flight for $358.

Many airline buffs or frequent flyers have long known about the hidden city proposition, but Skiplagged has popularized the practice. Flyers can take advantage of a risky bargain at their own peril.

Airlines like American hate hidden-city ticketing, which breaks no laws, but does violate conditions of carriage.

“With respect to hidden city bookings, when a passenger skips the final leg of her flight, American might delay the flight unnecessarily to track down the passenger,” the lawsuit says. “If the passenger still does not show, American has to determine whether she has checked luggage through to the final destination, because the luggage would need to be removed from the plane as a serious security matter, causing a flight delay. Additionally, when the passenger does not show up for the second leg of her flight, the rest of her itinerary is automatically cancelled and she and will not have a valid ticket on her way home.”

Are Skiplagged Rates a Sham?

One consistent theme throughout American’s lawsuit against Skiplagged is that it “consistently ends up charging the customer more than they would pay on AA.com.”

Although our example above shows that’s not necessarily the case.

The lawsuit has a couple of alleged examples of higher fares on Skiplagged or partner Kiwi than on AA.com. The lawsuit cites an American Airlines roundtrip to Ontario and Reno, Nevada, that Skiplagged initially showed as a $441 fare – a $14 savings compared to the $455 cost on AA.com. But Skiplagged’s total price turned out to be $459.40 after the service fee. The lawsuit said that Skiplagged’s service fees range from $10 per flight to 10% of the advertised base fare.

In another example, the lawsuit states that Skiplagged users often get charged a higher rate than on AA.com when they click on a Book Now button on Skiplagged that has them navigating to Kiwi.com. The lawsuit stated that Skiplagged displayed a $751 airfare for a one-way ticket from Washington, D.C. to Bellingham, Washington, but it would turn out to be $826 if the user tapped the Book Now button and booked the flight on Kiwi.com. American sold the flight for a total price of $751 on AA.com.

American stated that Kiwi, like Skiplagged, isn’t authorized to sell American Airlines flights.

Among Skiplagged’s allegedly “deceptive and abusive” practices, according to American, is that it poses as a consumer to buy American’s tickets for Skiplagged’s customers. “Skiplagged knows any ticket it issues is at risk for invalidation, and that American could simply cancel the ticket if detected, so Skiplagged hides its activity,” the lawsuit alleges. “It also tells its customers to hide it from American. Skiplagged does this by purchasing tickets on the AA.com website while pretending to be a consumer, in violation of the AA.com terms of use.”

Skiplagged has to respond to the complaint no later than a few days after Labor Day, depending on when a summons was served notifying the company of the lawsuit.