American Airlines sues a travel site to crack down on consumers who use this trick to save money

American Airlines has initiated legal action against Skiplagged Inc., a travel website that offers tickets enabling customers to save money by taking advantage of a specific pricing anomaly within the airline industry.

The lawsuit was filed in a federal court in Fort Worth, Texas, with American Airlines accusing Skiplagged of deceptive practices. The airline further warned that it might invalidate all tickets sold by Skiplagged.

This controversy revolves around a technique known as skiplagging or hidden-city ticketing, where passengers book flights with at least one stopover but disembark during the layover, bypassing the final destination. Even though this practice is not generally unlawful, airlines argue that it breaches their terms of service.

In a recent incident, American Airlines removed a 17-year-old from a flight and imposed a three-year ban after he used this method to travel from Gainesville, Florida, to Charlotte, North Carolina, rather than his ticketed destination of New York City. This option was less expensive than a direct flight to Charlotte.

In the legal documents, American Airlines contends that Skiplagged misleads customers by suggesting that they can exploit a hidden “loophole.” The airline also asserts that the website, acting as a regular consumer, buys tickets and instructs clients to keep the airlines uninformed of the scheme. American Airlines emphasizes that Skiplagged is not authorized to resell its tickets, labeling the website’s behavior as “deceptive and abusive.”

Skiplagged’s system can operate because of the competitive dynamics of the airline industry, where longer flights might sometimes cost less if several airlines compete for the longer route and fewer for the shorter one. Those who opt to use this method must avoid checking bags, as they will be sent to the final destination, and often purchase one-way tickets or use the tactic only on the return journey to mitigate the risk of the airline canceling the rest of their trip.

Skiplagged, headquartered in New York, is no stranger to legal battles. In the past, both United Airlines and the online travel agency Orbitz took legal action against the company’s founder, Aktarer Zaman, accusing him of promoting “prohibited forms of travel.” Zaman, who started Skiplagged around 2014 when he was in his early 20s, resorted to crowdfunding to cover his legal expenses. He eventually settled with Orbitz, while the lawsuit with United Airlines was dismissed.

As of the date mentioned, there has been no public comment from Skiplagged in response to the lawsuit filed by American Airlines.

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