American Airlines sues travel company over sneaky pricing

American Airlines is suing travel company Skiplagged for selling unauthorized airfare tickets and marketing them as cheaper and more affordable, according to a Dallas Morning News report by Irving Mejia-Hilario. 

Skiplagging—also known as hidden-city ticketing—is the practice where travelers book flights with multiple stops and end their trip at a layover rather than the final destination, per the explanation offered on Skiplagged’s site. Because flights with layovers are generally cheaper, Skiplagged is able to show users lower prices.

In the lawsuit filed on Thursday, the Fort Worth-based airline alleged that the company is deceptive and has no authority to sell its tickets. “Every ‘ticket’ issued by Skiplagged is at risk of being invalidated,” American Airlines attorneys said in court documents obtained by the Dallas Morning News. “Skiplagged also deceives the public into believing that the American fares it displays will give the consumer access to some kind of secret ‘loophole.’ But many of the fares displayed on Skiplagged’s website are higher than what the consumer would pay if they simply booked a ticket on American’s website or through an actual authorized agent of American. It is the classic bait and switch: draw consumers in with the promise of secret fares, and instead sell the consumer a ticket at a higher price.”

While skiplagging is not illegal, airlines have policies against it, reported David Koenig with the Associated Press. It’s only made possible because of how airlines compete in pricing, depending on the length of flights. 

American Airlines stands firmly against skiplagging. Just a month ago, the airline issued a three-year flight ban to a 17-year-old boy who was trying to travel from Gainesville, Florida, to Charlotte, North Carolina, by using a ticket that listed New York City as the final destination.

“If a customer knowingly or unknowingly purchases a ticket and doesn’t fly all of the segments in their itinerary, it can lead to operational issues with checked bags and prevent other customers from booking a seat when they may have an urgent need to travel,” an American Airlines representative said in an email to the Dallas Morning News.

Skiplagged’s site warns customers against overusing hidden-city itineraries. “Do not fly hidden-city on the same route with the same airline dozens of times within a short time frame,” the company posted on a FAQ page. “You might upset the airline, so don’t do this often.” 

The lawsuit claimed that Skiplagged encourages its users to mislead American Airlines employees. “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. It also tells its customers to hide it from American,” court documents said. 

This is not the first time Skiplagged has faced legal action. In 2014, shortly after its founding by company CEO Aktarer Zaman, United Airlines and the travel site Orbitz sued the then-22-year-old Zaman for allegedly promoting “strictly prohibited” travel and claimed it was deceptive and “unfair competition,” reported Insider’s Natalie Musumeci. Another lawsuit came from Southwest Airlines in 2021. All three were either dismissed or settled out of court, according to Musumeci.

In a 2014 interview with CNN Money’s Patrick Gillespie, Zaman defended his company, saying he did not profit from the site and insisting he is only exposing an inefficiency in airline pricing to help more people. “[Hidden city ticketing] have been around for a while, it just hasn’t been very accessible to consumers,” Zaman said back then.

Neither Zaman nor a company spokesperson has responded to the latest lawsuit from American Airlines.