Ethics Quiz: Is “Hidden City” Flying Unethical?

Hidden City

Last month, United and Orbitz filed a lawsuit against a website called Skiplagged, which among other things helps consumers plan trips with cheaper airfare using a tactic called “Hidden City.” Hidden City travel is when a traveler wants to go to a city that costs more to fly to directly than another city that uses the real destination as a connection. Thus, if you want to go to Charlotte, you book a cheaper flight that involves a change of planes in Charlotte, and just take your carry-on luggage and skip the last leg of the trip. Anyone can search and book Hidden City flights, but it is a chore.  Skiplagged makes it relatively easy.

Airlines punish frequent flyer passengers who use the method. They argue that gaming the system this way makes it difficult to track passengers and unfairly takes advantage of the hub-and-spoke system, where airlines fly to hub cities and add connecting flights from there. The lawsuit is trying to shut down Skiplagged,  alleging “unfair competition” that promotes “strictly prohibited” travel. The suit seeks $75,000 in damages, and 22-year-old site creator Aktarer Zaman is fighting it, seeking funds, so far successfully, on GoFundMe, where he originally sought  $20,000 to afford his legal bills and is closing in on twice that amount. My guess? If this gets to a jury, Zaman will win. The Streisand Effect is also in play: the airlines risk making everyone aware of this cost-saving maneuver, while getting bad publicity as well.

Zaman argues that the Hidden City ploy is legal. You know my answer to that ( Rationalization #4. Marion Barry’s Misdirection, or “If it isn’t illegal, it’s ethical”)and it’s also the first  Ethics Alarms Ethics Quiz of 2015:

Is the Hidden City tactic ethical?

Bloomberg refers to Hidden City flying as a “scam” and “cheating.” Is that a fair description? The ticket purchaser has paid for the whole flight, so why is it cheating to get off half-way through it?

I think it’s a close call, but I have to side with the airlines.  The closest analogy that I can come up with is card-counting in blackjack: it’s not cheating, and it’s not illegal, but the casinos have a right to prohibit it in their own interests. The rationalization (Rationalization # 18. Hamm’s Excuse: “It wasn’t my fault.”) is that the existence of a loophole is the airline’s problem to fix, and if they can’t fix it, taking advantage of it is fair. But it isn’t fair, any more than it is fair for travelers to avoid baggage fees by taking large bags through security to the gate, and then passing them off, at no cost, on the way into the plane. It’s dishonest, and the Hidden City trick is also dishonest. You pay the airline to take you to a specific destination. How they get you there is irrelevant: a ticket to Minneapolis is a ticket to Minneapolis, and if you use it to get to Chicago instead because the airline charges more to go there, you engaged in bad faith negotiation.  The ploy is also unethical because if it becomes widespread, airlines will have to raise fares, and all air travelers will suffer.

One of Zaman’s arguments also positions him on my bad side: he points out that his site merely shows the airfares, and that the passengers book the tickets. Right. That was the same argument made by radical pro-life websites that posted the names and addresses of abortion practitioners so fanatics could track them down and kill them. Pro-anoerexia websites don’t starve young women, they just encourage them to starve themselves. If Hidden City flying is cheating, he’s facilitating it.

Reluctantly, I have to agree that it’s unethical.

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37 thoughts on “Ethics Quiz: Is “Hidden City” Flying Unethical?

  1. In some situations, that skipped flight might be a federally subsidized flight to a rural small airport. The reason the flight is cheaper is because of the subsidy the traveler never knew was applied. Essentially, this would then amount to stealing a subsidy you otherwise wouldn’t qualify to receive. If that’s the case, the analysis is infinitely more clear.

    • How is the subsidy stolen? Imagine I order a steak and potato. It also comes with broccoli because broccoli is subsidized to encourage diners to eat it. If I leave the vegetables on my plate am I stealing the subsidy?

      • You forgot the 3rd party. Imagine you order $10 Steak and Potato Meal but the government wants you to eat Broccoli too. To encourage this, the Government pays $2 for every patron who eats Broccoli. Since the Government settles directly with the Restaurant, you never know about the subsidy. It costs the Restaurant $1 to put the Broccoli on your plate and they advertise it as an alternate option: the $9 Steak, Potato, & Broccoli meal.

        Restaurant takes your $9 and you leave the Broccoli on your plate uneaten. Later, the Government finds out that a lot of people still are not eating Broccoli though the subsidies have been paid. It investigates and finds that the Restaurant is claiming subsidies for “Broccoli Served”, not “Broccoli Eaten”.

        Deciding that government intervention isn’t a prudent use of money, the government is forced out of the subsidy business and consumer prices increase to $11 for Steak, Potato, & Broccoli. But people, being price sensitive, decide to just save a dollar and order the $10 Steak & Potato.

    • I have seen this phenomenon many times — that is, it’s way more expensive to fly to an intermediate airport than to a final destination — and it’s *never* been the case that any of the airlines were in small, rural locations.

      Some examples: You can fly from many of European capitals to Montreal or Boston (connecting in Iceland) for *less* than costs to fly from Iceland to Montreal or Boston. Like, many hundreds of dollars less.

      I have seen similar phenomena in the continental U.S., where flying to/from Minneapolis can be ridiculously expensive while flying *through* Minneapolis from coast to coast, from one relatively large airport to another (say, Seattle to Newark or Hartford) is a lot cheaper.

      These sort of situations frustrate travelers because there is simply NO WAY it costs the airline more to fly to these intermediate points. It feels like price gouging in situation where people have no choice. Like, if you *live* in Iceland, you have no choice but to fly to get anywhere.

      It’s hard to feel bad for the airlines or to think that people not using the entirety of their ticket is unethical. Seems the real ethical problems are with the airlines.

  2. I did a quick review of the complaint and it looks like there are significant contractual issues. He had an agreement with Orbitz and may have violated that agreement. Thus, even a jury might not side with him, if it even gets that far.
    Assuming no contract issue, I’m less ethically bothered. Tim’s federal subsidy still gets the plane to the airport, just a few pounds lighter. It’s not a full-service fare–you don’t get to check luggage or book a round trip ticket.
    Let’s get it out of air travel–if you are a huge fan of Musician X, but you can’t afford a ticket to his concert. However, little known, but publicly available, information shows that Musician X will be opening for his little brother, cheap Musician Y, is it unethical to buy a ticket to Musician Y’s concert and leave after the opening act? No. Similarly, it would not be unethical to compile the information about all opening acts and share it with the public.

    • Jay, I think that the airlines could probably win on the law, but that juries would be likely to side against the hated airlines and in favor of David, fighting Goliath.

      I’m not crazy about the singer analogy: in that case, the ticket is still for whatever is on the program. A closer example is a Multiplex where there are several theaters, and one is showing a premium price 3-D film. Your ticket to a cheaper film sill gives you access to all theaters, so you go see the 3-D, using your own glasses. I’ve actually been in this situation, and yes, it’s unethical to use your low-price ticket to see the high-priced feature, even though the theater is responsible for the loophole.

    • Maybe I’m not thinking this through, but doesn’t this still draw money that would otherwise be spent on the higher-priced ticket, subsidy or not? Doesn’t it still result in a net loss?

  3. I disagree. In the movie theater context, you have paid for the right to only go into one film. Going into another film is a trespass. In the flight context, you have the inherent right to exit the plane with other passengers.

    • Or, for those of us old enough to remember the double feature, I leave before the second movie comes on. The same movie cineplex is showing Big Blockbuster at 8 pm in theater A. They are showing a double feature of Big Blockbuster and Independent Film at 8:05 in theater A for a cheaper price. I leave before Independent Film is shown. My seat is empty, but how have I cheated the cineplex? I’m not asking them to change the film, just not make me watch the second film.

      • See… I get what you’re saying. But in almost any other situation, taking a fringe benefit as the main benefit wouldn’t be an issue, because you paid for the entire package. If I order a meal from Red Lobster and gorge myself on those delightful biscuits and leave my seafood behind, I doubt the business would really care overmuch. To take that example and carry it forward, this situation is like Red Lobster charging more for their biscuits as a side than the meal they would come with normally. We’re at this point, I think, because the airlines have been dicking people around.

        • Their service, their rules. The menu analogy isn’t any better than Jay’s double bill analogy. You don’t buy every city you fly over, or every city that you stop at on the way. A plane isn’t a train. Again, you but a city, at the price for that city. You haven’t bought the cities that the company sends you thru to get there. It doesn’t have to be that was, but it’s the airlines’ call.

          • I’m going to commit a logic sin here and make this anecdotal. When I fly, I know that because of where I live, a direct flight to damn near anywhere I want to go is almost impossible. So when I book a flight, I peruse the choices, and that stop (or stops) in the middle is a material part of my decision making process: How many stops are there? How much time does this add to my trip? Have I been there before? Did I like it? How long will I be there? Do I need a hotel? Do I like the hotels nearby? I have made decisions for longer, or more expensive flights based on the answer to those questions, and so I think that the assumption that you buy the destination city and nothing else is flawed. If that were true, airlines wouldn’t disclose stops.

            The more I think of this though, the more I think the airlines have something to answer for here. Another logical way of thinking about this is that everyone DOES pay the same amount to get from point A to point B, but in the case where people travel on to point C, there is a partial refund, and the airlines are unhappy because people are taking that partial refund without also sitting in the plane. It’s a very odd business practise, and I feel I’m missing something.

  4. I look at this from a value perspective. It sort of boggles my mind that airlines can make flights that land in city A and then make another trip onward to city B for less than direct flights to city A. I would love to know the economics of that. And if part of those economics are “idiot customers going to these particular locations will pay more, and not because there is a commodity based reason to” I have a lot of sympathy for someone who works out a system to save other people money and monetize it. In order for me to side with the airlines on this, I would have to be shown some reason that a trip from New York to Chicago would cost more than a trip from New York to Miami, through Chicago.

    • The answer is “just take your carry-on luggage “. the trip from New York to Chicago costs more because they have to haul your checked-in baggage as well as you,.

  5. Here’s my dissenting opinion.

    First off, I have to take issue with your comparison of airlines to casinos. While airlines, like most companies, make it their business to provide as little service for as much money as they can get away with, they do provide a tangible service as part of a legitimate transaction*. Casinos shill excitement for the unlisted price of a negative expected value for a customer’s winnings. Casinos very occasionally lose, but anything which can sufficiently guarantee a positive expected value for a customer’s winnings breaks their implicit contract with the customer, which is why they explicitly reserve the right to only retain statistically-illiterate suckers and people who merely want the thrill of not knowing the exact amount of money they’re going to lose.

    In other words, casinos are actually harmed by people who count cards because they break their (barely ethical) business model. Airlines are already paid for their services, and so whether the customer actually uses them doesn’t harm the company.

    Secondly, I don’t think an airline can “strictly prohibit” a passenger disembarking at an unscheduled airport just because the destination doesn’t show up on their ticket, if they are already there. (Please note: I do believe that an airline has every right to keep a person from disembarking mid-flight.) The passenger may feel ill or uncomfortable, and the airline has no business forcing them to board the next plane, fine print be consigned to oblivion. For this reason, a website taking publicly available information and using it to help people get a good deal is no more unethical than a retired person who cuts coupons and trades them to their friends for small favors. It is not “unfair competition” to hold a business to its promises to exploit a sloppy business model for the benefit of the customer until the company tightens its incentives packages.

    Speaking of sloppy business models, I, too, am boggled at the idea of a composite package that costs more than even one of its parts. Usually (and logically) such packages are more expensive than any of the individual parts, but less expensive than the sum. If the airline sets up a bizarro discount system like the former, it seems to me that is its own fault, and passengers taking advantage of any special offers and using them in ways the airline did not intend are not committing an unethical act against the airline. I repeat: the airline has already been paid in full for its promised service, and it doesn’t harm them if they are not held to the full promise. I would go so far as to say the reasons for offering such a ludicrous discount to the full package ought to apply to each leg of the journey, but they were just overlooked when offering official discounts because it wasn’t worth the trouble.

    However, passengers using such a ploy might be committing small unethical acts against other passengers, in two ways. 1) Flights can be delayed a bit if scheduled passengers fail to show up. On the other hand, there is a standard waiting period after which the flight stakes off without the missing passengers, still on time. 2) Other people could have used that seat. On the other hand, paying for something and not using it does take away the opportunity to buy it from customers who usually would not compete with you, but by that logic, buying things on a whim is unethical because it interferes with the routine of regular customers, especially if you buy the last one. It’s not unethical but merely neutral for me to buy a thing with my own money if it benefits me, just because now someone else has to take an alternative. Wasting food is slightly unethical, but it is not very much so in a country where it is so cheap.

    Furthermore, “space available” travel exists to take advantage of the occasional underbooked flight or no-show passenger. The superfluous seat won’t necessarily go unfilled. The website might even be able to coordinate people to take space available travel for the second leg of the first person’s journey, helping two people travel more cheaply because of the economic ineptitude of the airline.

    There is also the possibility of them raising ticket prices, as you say, but I argue in these cases that the ticket prices are artificially low and that this system would force the prices to reflect the actual resource expenditures and consumer demand for the corresponding flights.

    Also, “difficult to track passengers”? Am I to take this seriously, or is it the best pseudo-legal allegation they could slap together? I am not required, ethically or otherwise, to allow the airport to keep track of what city I’m in or whether I’m still in the airport after I get off the plane. If it helps, I could announce that I’ve left the building.

    Now, do riddle me this: How “fair” is it to charge one passenger $400 to take them from point A to point B, but charge $300 to take them from point A to point B and then to point C? It seems to me that people who want to go to point B are getting an unfair deal, since they’re paying more for strictly less.

    *Obligatory fine print joke.

    • EC Basically said everything I wanted to say, but better. Kudos.

      And fun fact, “Wasting food is slightly unethical, but it is not very much so in a country where it is so cheap.” Reminded me that biblically, gluttony was actually considered the worst of the seven deadly sins for a very long time. It was seen as the first Sin, as Eve biting the apple was in effect putting something in her mouth that shouldn’t have been there, also, there was a time where there WEREN’T enough calories to go around, and so someone eating to excess was technically starving other people.

    • I’ve always understood it as being a natural supply-and-demand thing. Airline passengers would rather get to their destination quicker and without the hassle of changing planes, so passengers going to point C get a discount if the route happens to pass through point B. The hassle of changing planes en route takes away enough value that the price of a shorter flight to point B could very well be higher. In that case it’s just the market setting the prices. I can see how using Skiplagged would seriously mess up the airline’s ability to gauge the market and price flights accordingly.

      I used to get sweet deals traveling to India by being willing to stop in Malaysia, which I loved, because the layover was nearly a full day, and you had time to roam around Kuala Lumpur for 10 hours. A free mini-vacation. Business travelers and other people in a hurry would see no value whatsoever in a full day’s layover, and they surely made up the majority, so their preferences resulted in a win for me. I saved money and got a bonus trip.

      • That raises an interesting point, which helped me finally realize how this could work:

        Let’s say we’ve got a flight from point A to point B and another from point A to point C. They each have different competition. B is a hub, so it’s cheaper for flights to use B as an intermediary. But A and C are right next to each other. Since it’s so cheap to drive from A to C, the airline faces pressure to reduce the price of the A-C flight. Non-air travel from A to B is more expensive, so the air travel can be expensive.

        To reduce cost, the flight from A to C is routed through B, but it still has to be cheap because it’s competing with road travel. The flight from A to B faces less competition from road travel, so it can be more expensive, despite the fact that it is a subset of the A-C flight.

        I say that once they make it possible to get the A-B flight out of the A-C flight, the A-B flight is now also effectively competing with the road travel from A to C, simply because of the logistical overlap with the flight that is directly competing.

        In other words, there is a natural transitive competition between A-C roads and A-B flights due to the fact that the airline decided to make A-C flights mimic A-B flights to compete better with A-C roads. I still say the airline needs to accept the consequences of their actions and price all flights from A to B the same or allow people to effectively price them the same by leaving at point B, whether it is the final destination or not.

        • The problem with this hypothetical situation is that the places you tend to see the most problems are when A and C are quite far from each other — like a coast-to-coast continental U.S. flight (with a stop-over in the Midwest or the South) or a continental U.S. to continental Europe flight where the stopover is in Iceland.

          In these cases, A & C are literally 3,000 miles away from each other — or more! And B is really an intermediary. And there is simply NO WAY that it’s costing the airline MORE to get you from A to B or B to C than it costs from A to C.

          Not sure why people who live in B — or need to fly *to* B — need to be effectively subsidizing the longer-haul passengers who use B as a change-over.

  6. How do you feel about the common practice of business travelers who stay over a weekend to get a lower fare? Offering lower round-trip fares for people who stay the weekend is the flip side of charging more for people who don’t stay the weekend. The airlines goal in doing that is to charge business travelers more than vacation travelers because they know that business travelers typically can afford to pay more. Some companies encourage their employees to stay extra weekend days — even paying for an extra night at a hotel — in order to take advantage of the lower airfare. In doing so, they are effectively trying to disguise their employee business travel as vacation travel.

    Another example The cloud backup service that I use charges something like $14/month to backup unlimited data. They can do this because they know most customers will not backup anywhere near enough data to cost more than the monthly fee. I, on the other hand, backup an awful lot of data, and probably cost them money. Is that unethical?

    I think the emphasis in your casino example is wrong. Card counting isn’t against the rules, but they don’t have to let card counters play the game. But if they do let them play the game, then all sorts of betting strategies are allowed.

    Look, the airlines could easily put a stop to this. Just add language to their contracts so that if someone does this they can charge them for the flight that they took rather than the flight that they booked, plus maybe a fee for the itinerary change. That they don’t suggests to me that they don’t really mind too much. In essence, they’re willing to give lower airfares to people who can’t easily afford the higher fares, with the difficulty of finding hidden city fares serving as a way to identify price-conscious flyers.

    Basically, it’s not really an ethics issue. It’s all part of the game. But as with the casinos and card counters, or the unlimited backup service, they don’t mind it much when people do it occasionally (casinos love card counters who aren’t very good at it), but their business model suffers if everyone does it — thus the anger at Skiplagged.

    • That kinda, sorta reminds me of the cheap Disneyland passes my wife and I once had. Whenever we were in the area with time to kill, we went to Disneyland until we had mastered the art of not paying for parking, food, etc.

      The passes were only good for school days, since the park is less crowded then, and Mickey’s army of accountants knows that it makes sense to offer locals a deal for those days if only to keep the turnstiles moving. But too many locals were thinking like my wife and I. Our passes ended up making our dates at Disneyland cost an average of maybe $5 each. It was too good to last.

      A couple of years ago Disneyland figured out that a family on vacation spends SO much more than a local per day, that it was more profitable to just market like crazy to out-of-state families and price out locals. The prices of those special passes shot way up. It was fun while it lasted.

      • That’s a good example. This sort of thing happens a lot with any business that has low marginal costs and/or perishable goods. Opening Disneyland for the day costs a ton of money, but once it’s open, letting in 1 more person costs almost nothing — at least until the park is full, and letting one person in means refusing entry to someone who might be willing to pay more. On the other hand, if they turn you away because they want to earn more than $5 and nobody shows up to take your place, they just lost $5. Air travel is the same way: Flying the plane might cost $25,000, but each additional passenger only adds about $25 in fuel costs. They want to make as much as they can, but anything over $25 is profit if it keeps no higher-paying flyer off the plane. This is also why standby prices are so good. The value of an empty seat drops to zero once the plane pulls away from the terminal, so if you show up as the door is closing with $26, they might as well let you on and pocket that dollar. Basically, both sides are playing a complex game of incentives and ultimatums. Almost every crazy thing about airfares can be explained with some variation of this idea.

  7. I agree to some extent that encouraging people to violate the terms of their contract is unethical (although, as windypundit points out, there are various violations of the spirit of said ticket agreements that are less bothersome).

    What I don’t get is the airlines using the courts to sue for something they have the ability to resolve themselves: If this is an issue they care to pursue, it’s the individual ticket holders violating their agreement. If they’re not in timbuktu first on their way through chicago, refund that part of their ticket, and tell them the agreement for their transport is broken. The first story or two about that would resolve the widespread use of that travel tactic quickly.

    Using the blackjack analogy, I have no problem with the casino kivking out the card counter (their house, their rules), but I do have a problem with the casino suing him.

  8. I’ve never planned to do this, or done it with a financial motive, but I’ve exited planes and trains at an intermediate destination multiple times (and also boarded trains at a stop down the line). Are you supposed to ask the attendant if you owe them a few more bucks? It seems a silly concept.

    I’d feel better about this being an ethical issue if the airline made it obvious on the website that this is important to them. Not just something buried in the terms and conditions, but something that has to be affirmed specifically by the customer.

    • That confuses me too. The airlines claim it is prohibited: how is it prohibited, exactly? But the website designer presumably knows it’s prohibited: none of hi statements suggest otherwise.

      • On the theory that they want to provide value to the people who want that specific value, they see flight jumpers as denying the value to someone who did want that destination. Now, I don’t fool myself into believing they are purists, so I am confused also.

  9. We need to discuss up front, what the free market & the economy is. The economy exists because people want certain goods and services and other people expending their time and energy providing those goods and services. In short, the free market exists so that people can fulfill other people’s wants – that is to provide value to others. That is the PRIMARY and originating reason of the market. All commercial interactions exist ONLY to provide value to other people. I know that will cause a gasp among many who will say, “WRONG I have a job to make money or commerce exists to make money and generate wealth!”. Nope. Commerce exists to provide value to others. Money and wealth are happy side effects of providing that value WELL. We often go astray when we put the cart in front of the horse.

    The airline industry has decided that the value it provides to the market is getting people from place to place quickly. That seems simple enough that everything ought to be seen as a direct flight. Three cities should have 3 routes. Atlanta to Boston, Atlanta to Chicago, Boston to Chicago. Simple enough right? Each individual jaunt, a single service offered. Only, it’s complicated – part of the value provided is a quick trip between those destinations – for the lowest cost possible. Here’s where economies of scale complicate things further.

    Let’s say the airline runs planes that can carry 100 people each. Let’s say our market consists of 200 people. Only 50 people want to fly on route A-B, only 75 want to fly A-C, and only 75 people want to fly B-C, that is 3 planes that have to mark up each route by a lot to pay for that individual route. In a system that charges exactly what is necessary to pay for the specific plane in question, A-B ought to cost remarkably MORE per flyer than tickets on A-C or B-C.

    Now, after the airline number crunchers have determined they can run A-C (with some of B’s passengers) at 100% capacity, they can run B-C (with some of A’s passengers) at 100% capacity, they can now run only 2 planes, costing the passengers (in aggregate) much less than if they ran 3 separate planes.

    Mathematics now says that the A-B passenger’s route ought to price HIGHER, because each of their legs together cost twice as much as the passengers of the single leg routes. But remember, the A-B passenger’s route is in LESS DEMAND. Under the theory of wanting to provide as much value to as many people as possible, the airline still must reduce their ticket price to provide them value, transferring some of their overhead costs to single route people, whose destination C, is in HIGH demand. All knowing that even A-C & B-C tickets being higher than A-C-B, they are still LOWER than if there were 3 completely separate flights handling direct service. Which means, ON AGGREGATE, the airline is providing the best service for the lowest price than if they ran 30 times more flights that they could barely fill up less than the Titanic’s lifeboats.

    Ok, now that you’ve wrapped your head around that completely clear and simplified explanation, let’s get to the ethics. Mass transit always leads to odd commercial interactions. We want simple one party – one party deals, whereas mass transit is always multiple parties – one party deal built in the construct of one party-one party.

    1) On a simple, once over, hyper-free market view of things, the conduct IS ethical. Passenger X has found a way to get to destination C for less expense, all he has to do is buy a cheaper ticket and skip out on the flight. So what?

    2) Violation of contract? I don’t see it. Passenger X promises to provide $500 dollars to Carrier Y IF Carrier Y gives him a flight to destination B. I haven’t seen a contract yet that doesn’t allow either party to forgive the other completion of the contract. X lived up to his side of the bargain paying for a ticket, he forgives Y the remainder of Y’s obligation when he steps off the plane, never to return. There’s been no violation of contract, unless somewhere in the fine print Passenger X has also promised that he will step off of the plane never to return ONLY at destination B. But, fine print withstanding, I don’t see even a good faith assumption that X has made that promise.

    3) Passenger X HAS denied non-passenger Z (who desperately does want to get to the destination) a seat on the plane by purchasing the ticket. On aggregate terms, I’d say that is unethical, because he’s gamed the system to the detriment of another.

    4) Passenger X also compels the airline to waste resources because an empty seat is now being ferried about wasting FUEL, pilot time, and other overhead. (sure it’s paid for…but that doesn’t mean it still isn’t being wasted when it could be used in other ways, such as carrying a passenger who DID want to go to that destination).

    5) But does #4 mean that in reality, the airlines are unethical for creating a system than leads to unnecessary waste? (to be clear- some waste WILL happen, but can be forgiven if it was unintended and all efforts are made to avoid it)

    After all consideration, I think the behavior is unethical on the grounds of denying another flyer the service by misrepresenting the service desired as well as from the waste of resources angle. I don’t think it is unethical because of some unstated promise by passenger Z to go all the way to his/her purchased destination – rather that in not going to his or her purchased destination, they have via a complex prisoner’s dilemma, screwed someone else.

    6) Why don’t the airlines just run nothing but direct flights and adjust their airline fleet to be a much more versatile one that has a WIDE WIDE WIDE range of passenger capacities, that way the lesser demanded flights, and therefore fewer passengers only have to pay for a less expensive plane? As a hyper free market type, I believe a market is purest and eventually MOST FAIR when things are broken down as much to component as possible… The problem is payroll. Each flight would still have a pilot & crew it had to pay for. Regulations and Unions have driven up the cost on so many of those that for airlines to reduce costs, ALL of it’s number crunching boils down to reducing quantity of pilots and crews…which means reducing #s of flights…which means maximizing capacities of flights…which means aggregating & creating hubs…which means oddly shaped flight plans for people who want what looks like an easy direct flight… which means problems like this. (you know I had to include a gripe about the Government and Unions).

    • I like it. Pretty good post.

      I’ll only be responding to #6 – which is to say that we’re about to jump the shark and go off topic.

      I think what airlines have come to is that they’ve over-committed on their fleet. I would imagine that the planes, regardless of size, have to be run at near 100% capacity to justify the cost of the plane before it needs to be decommissioned due to age. Also, having a variety of planes means having a variety of spare parts, a variety of aircraft specific pilots, a variety of aircraft specific maintenance crews, etc.

      It’s all a bit of a complicated system that I guess works well given the circumstances, though I can’t help but think that there is so much inefficiency in the smaller markets because of regulation and costs on the big markets. I don’t know how many reading this have flown to a small market rural airport, but it is quite an experience. (Northern Middle States, Idaho to Wisconsin & the U.P.) Nearly everything in the vicinity of Minnesota connects through Minneapolis or Chicago.

      Anyways – that’s just my run-on thought and 2-cents.

      • No doubt.

        I flew on Ryan Air or Easy Jet…I don’t remember which now, but we flew from London-Luton (30 miles outside central London) to Dinard-Pleurtuit-StMalo (about 1.5 hours southwest of the Normandy coast). There was 1 flight attendant, 1 pilot and I assume co-pilot. The flight was something like 60 bucks. Our goal was to tour across Normandy on to Paris, so renting a car was necessary and should be included in overall travel expenses.

        Nonetheless…the small airlines found efficiencies EVERYWHERE. After we landed, there was ONE guy handling baggage and it may have been the flight attendant and it was enough. We were the last flight of the day and the pilot ushered everyone out of the airport because HE locked up all the doors and the security gate before driving on to his home in Dinard…

        The only gripe we had is the rental car kiosks were ONLY manned if someone had prearranged a rental at that airport. The asshole who was assigned to our rental apparently decided we weren’t important and never showed up. So we were stuck without a car and a little bit of an adventure getting into town to our hotel.

        Of course, I don’t know how heavily subsidized those airlines may be and how much of our ticket cost was footed by the various countries we were in, but that was a ridiculously inexpensive flight.

        • To add to the anecdotal evidence, our flight from Treviso (about 20 miles north of Venice) to London Luton, a much longer flight, only cost about $150)…

          And I know these were Fall 2005 prices, but even then, comparable distances at the time with the main airliners was still 2-3 times more expensive.

      • And also to be clear, individuals being able to game a system like this merely shows inefficiencies in the system, implying there’s a better way to run the system that IS more fair in terms of real costs being proportionately translated into real prices on a case by case basis. Having (reasonably proven) faith that the free market does find these efficiencies and fairness, this implies to me that something else is compelling this odd arrangement of prices…

  10. There is more on this issue, courtesy of William A. Levinson.

    United Airlines and Orbitz have sued Skiplagged, and United has argued that “hidden city ticketing” cheats the airline of the opportunity to sell the seat that the passenger has abandoned. This is not an honest argument because, had the passenger used the complete trip for which he or she paid, the seat would not have been available anyway. The real issue is that, in this case, an airline is trying to sell a nonstop ticket to LaGuardia for $176 more than it sells a 3-leg ticket that stops in LaGuardia. Compare this to how Chicago’s Metra system prices its tickets, and of course how every toll road in the world charges its users.

    According to their web site: “Metra operates a distance-based fare system consisting of twelve fare zones. Riders are charged based on the number of zones they travel through. Regular one-way fares to downtown Chicago range from $2.75 from the closest zone, Zone A, to $9.25 from the farthest, Zone M.”

    My experience with the Chicago Metra system has been that, unlike the airline industry, it runs like clockwork, and gets you to your destination on time. If Metra imitated United, American, US Airways, and their cohorts, it would sell Zone A tickets for $9.25, Zone M for $2.75, and then wonder why everybody bought Zone M tickets regardless of their destination. This, along with the airlines’ delusion that they can charge money for valueless privileges like early boarding (you get to wait in a cramped seat on the airplane rather than in the waiting area), underscores the perception that they expect to be paid for existing rather than adding value.

    The lawsuit against Skiplagged, even if successful, will merely draw more attention to the issue of “hidden city” fares. A traveler does not need Skiplagged to find these fares by looking for the destinations served by the hub airport in question. I found the Raleigh-Durham to New York example with the aid of a map of smaller airports that are served by LaGuardia; a flight from Raleigh-Durham to any of these airports is likely to stop at LaGuardia. FlyShortcut.com is another resource, and it uses the example of a flight from San Francisco to Aruba via New York that costs roughly half of a flight from San Francisco to New York. I would not advise anybody to act on this without reading the caveats in the Bender article (e.g. if your flight is diverted to another city, you obviously have no recourse). Consumer advocate Clark Howard has more on this:

    “If you do plan to try hidden city ticketing, keep the following in mind: You should only book one way at a time, you shouldn’t use frequent flier miles, and you shouldn’t check in a bag because it will wind up in the final destination city.”

    The bottom line takeaway is, however, that the airline industry really needs to differentiate between value and gimmicks if it wants the trust and respect of its customers.

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