American Airlines sues Skiplagged over offering pricing 'loophole' to customers

Travellers use website to book itineraries that include at least one stop but get off during a layover

An American Airlines Airbus 321 sits at the gate at Ronald Reagan Washington National Airport in Arlington, Virginia. AFP

American Airlines is suing travel website Skiplagged, which sells tickets that allows people to save money by exploiting a quirk in airline pricing.

The airline took Skiplagged to federal court in Fort Worth, Texas, this week, accusing the website of deception. It threatened to cancel every ticket that Skiplagged has sold.

In a practice called skiplagging and hidden-city ticketing, travellers book a flight that includes at least one stop, but they leave the plane during a layover. Generally, skiplagging is not illegal, but airlines claim that it violates their policies.

Last month, American Airlines booted a 17-year-old from a flight and banned him for three years when he tried to use the tactic to fly from Gainesville, Florida, to Charlotte, North Carolina, on a ticket that listed New York City as his destination.

This was cheaper than booking a flight directly to Charlotte.

In the lawsuit, American Airlines accused Skiplagged of tricking consumers into believing they can tap “some kind of secret ‘loophole’”.

It said the website poses as an ordinary consumer to buy tickets but warns its customers not to tip off the airline about the arrangement.

The airline said Skiplagged has never been authorised to resell the airline's tickets.

“Skiplagged’s conduct is deceptive and abusive,” the airline said in the lawsuit. “Skiplagged deceives the public into believing that, even though it has no authority to form and issue a contract on American’s behalf, somehow it can still issue a completely valid ticket. It cannot.

“Every ‘ticket’ issued by Skiplagged is at risk of being invalidated.”

There was no immediate response to a request for comment left with Skiplagged.

Skiplagging is possible because of the way airlines compete on price.

Long flights usually cost more than shorter ones, but the reverse might be true if many airlines compete on the longer route while only one or two fly the shorter one.

Travellers who use the tactic avoid checking a bag, since it will wind up at the ticketed destination, not the layover airport. They often book one-way tickets, or only try this strategy on the return trip – if the airline notices someone skipping out, it might cancel the rest of their itinerary.

Skiplagged, which is based in New York, has been sued before.

United Airlines and online travel agency Orbitz accused Aktarer Zaman, who was in his early 20s when he started Skiplagged around 2014, of touting “prohibited forms of travel”,

Mr Zaman started a GoFundMe to pay his legal costs. He settled with Orbitz and the United lawsuit was dismissed.