Symbiosis School for Liberal Arts

Current Business and Economic Analysis CA1

Dhwani Shrotriya | 19060322030

Skiplagged
When United Airlines tried to clip the wings of a 22-year-old entrepreneur

There is a hack that passengers found to considerably decrease the price of their airline
tickets- hidden city ticketing or skiplagging. This hack was created by working against a
combination of strategic decisions made by airlines to beat their competition and play by the
market. When one is flying from city A to city B on a non-stop flight, which is in high
demand, it is naturally of a higher price. However, if one takes a flight from city A to city C,
that stops in city B (it is not direct anymore), it becomes cheaper. The hack is to simply book
the flight from A-C, but get off at B and never get on the final leg of the flight. This way the
full price on the stop flight is still cheaper than the direct flight.

Airline pricing is primarily based on the competition, resulting in airlines strategically

lowering fares in certain markets over others. This is a calculated risk taken to avoid losing
market share.

If we take the example of flying from Boston to Las Vegas. This is a holiday market and
therefore is price sensitive. On the other hand, Boston to Houston results in a higher price
range, despite being a shorter flight, because it is a business market. From an economic
standpoint, it is ideal to lower fares in a long, non-stop flight in a leisure market (customers
are looking for the cheapest and most convenient flight for vacation), and therefore get ahead
of the competition. This is a common capitalist approach, wherein flying from or into
cosmopolitan cities and hubs is always more expensive.

The tactic- to skiplag, was difficult to carry out when it came to sifting the required flights
from the array of options provided on websites. Airlines and third-party ticketing partners
have algorithms that naturally put forth their most ideal flights, not the hidden city ones.
Therefore, in 2013, Aktarer Zaman, a 22-year-old software engineer, created a website –
‘Skiplagged.com’, which gave an easy search option for hidden city flights, and hence
became the hub of cheap flight options for frequent travellers. In 2014, United Airlines (a 21-
billion-dollar company) and Orbitz sued him, but he won, and shook the industry to its core.
CNN Money 2014
First report on the case – the why and the how.

This was the first report written post United and Orbitz filing a federal lawsuit against Zaman
and Skiplagged.
It is a detailed article entailing the course of the case, with a strong analysis of the legal
aspects that resulted in a win for Zaman. The case was built against the idea that Skiplagged
was creating ‘unfair competition’ with allegedly promoting strictly prohibited travel. The
case boiled down to the fact that, a passenger can choose not to complete his/her/their journey
at their own discretion, just as a customer at McDonald’s can choose not to finish a meal that
they purchased as a whole. It is not illegal to create a website that helps passengers’ book
complete journey tickets, which they have no intention to complete. The website is using a
similar strategy to coupon codes or promotional discounts.
The catch however fell in the fine print of a particular airline rule- contract of carriage.
The contract between the airline and the passenger states that they make the purchase,
agreeing to fly all the flights. Hence hidden city ticketing is essentially a violation of that
contract. This, as posited by CNN, was an insubstantial argument, as there could be a variety
of reasons to miss a flight, which unless is an emergency, is not refunded by the airline.
Furthermore, a customer paying full price for a product, cannot then be sued further for not
consuming it as a whole.
Post the loss of the lawsuit, Orbitz withdrew and settled with Zaman, however United
continues to pursue it. This article resulted in the case becoming widespread public
knowledge, which fuelled a GoFundMe campaign by Zaman to help him fight against United.
(Gillespie, 2014).

BBC News 2019

If not the entire website, target the users – Airlines threaten skiplagging customers

5 years after the lawsuit was lost, United and other airlines still persist in their efforts to put
an end to this practice. While United continues to try and bring down skiplagged altogether, it
has also individually meted out warnings and request for payments from their customers who
have used hidden city ticketing. This article outlined the possible ethical dilemma that
frequent fliers face while using this hack against airlines that they have used religiously over
the years, and as a result have memberships with. It also pointed out that the New York
Times Ethicist Column explained how this is not an unethical means of traveling, and there is
more fear of losing these memberships or being paid a visit by collection agencies that cause
hesitation amongst travellers. United and Lufthansa together sent out letters for collection and
threats of bans over 3000 customers between 2013 and 2019. The article is clearly on the
passenger’s side as it sums up to the idea of ‘don’t hate the player, hate the game’. This
simply means that airlines must realise that this hack is a result of their own pricing
strategies. (Creedy, 2019).

Skift 2021
Breach of information- a new effort to bring down Skiplagged

Since 2014, following United, a number of airlines have joined the effort to stop skiplagging.
This article covers new information in the conflict between airlines, skiplagged and
skiplaggers.
Southwest Airlines has been in a long-standing battle against third party ticketers for selling
tickets without the airline’s authorization. In 2020, it found a golden ticket to kill two birds
with one stone. There was evidence that Skiplagged partnered with Kiwi (a Czech based
ticketing company) to source their data on airline fares and routes and use them to run the
website. Previously the argument of Skiplagged using hidden information was discounted as
the lawsuit was based on contracts of carriage (which is between airlines and passengers and
not third-party websites).
However, this article reports the flaws in Skiplagged’s system based on the new lawsuit filed
by Southwest airlines. This article has approached the situation by taking the side of the
airlines and blatantly pointing out the risks and consequences of hidden city ticketing.
However, this is also the result of the pending lawsuit from Southwest, that Skiplagged might
not be able to win- media propaganda tends to run with the winning party. (Schaal, 2021).

To conclude with, Skiplagged was created purely as an inspiration of existing actions. It was
a smart business decision that simply acted as a catalyst for a service that was highly in
demand. It played against the pricing strategy that airlines had drawn up themselves. Even if
Skiplagged loses the case, there will always be a way for people to find the cheapest, most
convenient way to travel, or in this case- fly.
References

1. Gillespie, P. (2014). Why is United suing a 22-year-old?. CNN Money.

https://money.cnn.com/2014/12/29/news/united-orbitz-sue-skiplagged-22/
2. Creedy, B.K. (2019). Why airlines are cracking down on ‘skiplagging’- the hack that
savvy travellers use to fly for less. BBC.
https://www.bbc.com/worklife/article/20190226-the-travel-trick-that-airlines-hate
3. Schaal, D. (2021). Southwest Lawsuit alleges Skiplagged and Kiwi collude to deceive
flyers. Skift.
https://skift.com/2021/08/03/southwest-lawsuit-alleges-skiplagged-and-kiwi-collude-
to-deceive-flyers/