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Jury awards American Airline $9.4M from website behind 'skiplagging' hack
- jmward01 2y agoSeems like this practice in general shows that a true free market doesn't exist in the airline industry. If it did exist then flights like these wouldn't be profitable to sell in the first place.
- diziet 2y agoI could imagine situations where airlines need to get pilots/crew/planes to some location for the next flight and somehow recoup costs there, and are willing to cut prices on such multileg flights to take business away from their competitors... but I generally agree with your statement.
- animal_spirits 2y agoYep, it is not just travelers going to destinations that compete for chairs on an airplane but also workers of the airline too. The larger airlines have to balance these priorities
- jmward01 2y agoThat doesn't explain why that would make the price cheaper to keep someone on the flight than letting them get off. It may be a meaningless difference, or even the same price, but cheaper to have the extra leg doesn't make sense if there is competition. That person has weight if nothing else and that costs money to haul.
- qotgalaxy 2y ago[dead]
- o11c 2y agoReminds me of the famous Interstate Commerce Act of 1887.
- akira2501 2y agoWe tried a free market airline industry. We rightfully second guessed that for the huge safety problems it created. We then recognized that the skies belong to the public, collectively, and access to it must be licensed as such and commercial activity within it strictly regulated. Which would all probably work were it not for the obvious pathway to regulatory capture this creates. You need strong regulators that are heavily incentivized towards the American public and not the particular private airlines that happen to currently have a contract. I wonder, if like banking, it would be smart to separate the companies that own the planes from the companies that actually operate them. A disinterested third party that actually holds the assets might serve as an actual wedge between the FAA and the "major airlines."
- readthenotes1 2y agoThere are almost no industry without some regulatory restrictions on them.
- hilux 2y agoThe airlines industry is heavily regulated, as most big-money industries are. "True free market" does not mean "complete absence of all regulations"!
- librish 2y agoI'm surprised that this common enough that it's worthwhile for airlines to fight it. It requires both: - Flight being meaningfully cheaper using hidden city and - Traveller is willing to deal with the restrictions (no carry-on, risk of route changing, no frequent flyer etc).
- radpanda 2y agoAgreed. I like the idea of being hostile to the airlines so I’ve used Skiplagged to search for flights before but I’ve never found a hidden city itinerary that I actually wanted to take. I’m guessing it probably makes sense with certain airports with high fees near concentrations of wealth? E.g. maybe London->NYC costs more than London(->NYC)->Albany because NYC airports have high fees and airlines presume wealthier clientele bound for NYC?
- nneonneo 2y agoI don’t even think it’s a “wealthier clientele” thing. Some routes are literally subsidized - for example, the Essential Air Service program pays airlines to run flights to places that would otherwise be unprofitable to fly to, and due to the grants the airlines can offer the complete route for (relatively) cheap. So, for example, it might be expensive to fly New York to Chicago, but subsidized (and cheaper) to fly New York to Podunk via Chicago. But if lots of travelers catch wind of this, and pretend to go to Podunk only to get off at Chicago, then the air carrier doesn’t get their subsidy.
- jmward01 2y agoThe missing point in your argument though is that the people doing this didn't want to go to the destination. So if this wasn't an option, getting off before the subsidized destination, they wouldn't be flying anyway and the airline still wouldn't be getting the subsidy. I'm still not seeing any real answer how this practice can exist in a true free market and how it doesn't indicate collusion in the airline industry.
- 2y ago
- x3n0ph3n3 2y agoI don't understand the airline's argument that they couldn't resell the seat. Of course not, it was already paid for! Can someone make sense of their argument for me, as it seems prima facia illegitimate.
- altairprime 2y agoLegacy US airlines don’t always price their seats logically based on fuel, tax, time, and wear costs. The price for a given multi-leg trip is sometimes discounted by Some Amount from the actual price you would pay buying each leg individually. This is exploitable by purchasing a discounted fare with (H) hops at price P(H) in order to fly (H-X) hops, where X > 0 and P(H-X) > P(H). I offer no speculation as to their motivations in selling a ticket where P(H-X) > P(H) but I certainly don’t think kind thoughts towards them for the outcomes it creates in airline pricing. Their complaint against consumers is, in summary, “we could have charged a higher price P(H-X) for the seat that was left empty if the customer had not exploited this P(H) loophole in our pricing, and we deserve to be paid that difference.” This is not strictly relevant to the lawsuit, which is against an agency rather than a consumer, but helps explain their motivations for prosecuting an agency site for exploiting it. Their complaint against the third party website is both different and more nuanced, but ultimately stems from a site making it trivial for consumers to find and exploit this loophole without domain-specific knowledge known primarily to travel agents and hobbyists. Thus their extreme focus on trademark; if they had succeeded in that claim, they would potentially be able to weaponize the judgment against any site that doesn’t pay them a bribe for showing their logo in association with interpretations of flight pricing data, which would let them harvest millions of dollars of new passive revenue streams; as well as having the option to terminate the existence of any site they dislike that shows their logo or brand. Their trademark claim was denied in full. The airlines are within their legal rights to cancel tickets and refuse business from customers who exploit this loophole, so long as they do so indiscriminately with respect to the protected characteristics of the individuals refused. There are no regulations requiring simple coherent pricing where leg+leg+leg = multi-leg fares, either, which is why ITA Software’s Matrix and its ability to resolve traveling salesman pricing problems across the fare code hellscape was worth a billion of dollars to Google.
- friedtofu 2y agoImportant note: "skiplagging" while frowned upon and grounds for an airline banning individuals from using them; is not why skiplagged is paying AA $9.4M. From the article: Paul Yetter, an attorney for American with Yetter Coleman in Houston, told jurors during opening statements that Skiplagged is not an authorized agent of the airline yet "dresses up" its website with American's trademarks to look legitimate and fool consumers into thinking they are buying from the airline.
- x3n0ph3n3 2y ago> no damages being awarded on the trademark claim
- downWidOutaFite 2y agoso authoritative yet so wrong
- ejddhbrbrrnrn 2y agoIt might be why (in the sense of motivation, not law) the suit was filed though.
- xethos 2y agoHalf right: > "They ordered New York-based Skiplagged to pay *$4.7 million in disgorgement from the travel site’s revenues* and another $4.7 million for copyright infringement." The fine is half trademark infringement, half for "costing" AA money through not letting them resell the seat themselves
- pabs3 2y agoThe damages were for copyright not trademark infringement, they explicitly didn't give any damages for the trademark infringement.
- xethos 2y agoDamnit - I should know by now not to use the two interchangeably (especially after using the correct term in the quote!). Thanks for the correction here and below
- wongarsu 2y ago> Skiplagging is not illegal, but airlines view it as a policy violation that is grounds for termination of a traveler’s entire itinerary since the airline can't sell the empty seat in the onward flight. The poor airline, unable to sell an empty seat because ... checks notes ... the seat is already sold to someone, and that person decided not to show up. Truly the horror. Just think of all the revenue the airline lost because they couldn't charge more for a shorter flight and now have to fly the last leg with less weight But it seems like the entire court case was mostly centered around the legality of the branding of the website. I guess overall the guy behind skiplagged will be happy to have gotten away with what amounts to 10% of revenue in exchange for a lot of publicity.
- m463 2y agoMaybe the site should rebrand itself. Tell people to get off if the meal on the next leg is ... checks notes... a safety hazard.
- exe34 2y agoyou can develop allergies at any point in life after all, so it would make sense.
- blactuary 2y agoYup, and since they routinely oversell flights, I have zero sympathy for them. Negative sympathy even
- ddingus 2y agoAnd the big four more or less quit going hard on price.
- doctorpangloss 2y agoDo you think ticket prices should be lower, or higher? What remedy do you prefer to achieve your goal?
- 2y ago
- bhouston 2y agoWell, Skiplagged is still in business and this probably just drives more traffic to their website as this raises awareness. Apparently they have had more than $100M in ticket sales, if not much more.
- radpanda 2y agoAny idea what percentage of their sales are actually hidden city itineraries? Every time I’ve searched with them I’ve seen few or no hidden city results, but I guess it’s neat to be aware of the option if it does exist.
- exabrial 2y agoFunny, in the rental market, most states literally _very enthusiastically_ enforce a housing regulation where is staunchly illegal charge rent to two people for the same property, regardless of whatever contracts they've signed. So you know, how the airlines might book 103% of capacity on a plane? oh yeah, straight to jail. Guy signed a lease and defaulted, you find a substitute renter and you don't cancel the original tenant's payments? also, believe it or not, straight to jail.
- pushedx 2y agoExactly, so it's very likely that the seat that they are concerned with will actually be filled, based on the way they operate right now.
- alex_young 2y agoExcept this happens all the time in hotels…
- teo_zero 2y agoHouses are perhaps the exception, because hotel rooms, b&b's, cars, and many other rentals that are sold as services don't benefit from the same protection. I'd postulate it's because a house is not considered replaceable with another one or with a refund, while car rides, flights and short-term accommodations are.
- ejddhbrbrrnrn 2y agoI am on the airlines side really. They set the fare from A to B. If you start have people skipping they can no longer offer the competitive fares. The solution could be fines for doing it as a general principle. They also may cause delays due to final calls, security and manifest checks etc.
- SturgeonsLaw 2y agoI'm not sure that's the case, "offering competitive fares" implies that they are trying to charge less, however no business is going to sue for their right to charge less money. They want to charge more, and are using the legal system to help achieve that end.
- Glyptodon 2y agoShouldn't be the opposite? If a route goes ABC, they'd have to sell AB and BC separately instead of bundled? No more "skipping" and any trip that's not direct can freely be assembled from legs on any airline?
- Ekaros 2y agoThat would save lot of money for airlines. After all if the AB and BC is properly treated as legally separate products. Then responsibility of getting to BC with AB even if the AB is delayed would be fully on customer. Too bad we were late, now pay the full fare for BC again. As you failed to show up.
- kortilla 2y agoI implore you to explain how deplaning means they can’t be competitive. If I jump out of the airplane halfway through a flight, how does that change their pricing beyond me saving them fuel? The only way this makes sense is a segment rebate scheme for flights to underserved communities. But I don’t think this is what’s at play here because it’s not mentioned at all.
- samaltmaan 2y agoHalf of HN works in SaaS or similar but it seems I need to explain. Price discrimination is a selling strategy that charges customers different prices for the same product or service based on what the seller believes it can get the customer to agree to. In pure price discrimination, the seller charges each customer the maximum price they will pay. In more common forms of price discrimination, the seller segments customers into groups based on certain attributes and charges each group a different price. Airlines famously work on razor thin margins. If they dont make their $ this way they need to charge more for the NYC full fare, and because all competitors do it it pushes those fares up. Which might be OK but what this means is skippers make it worse for people who legit follow the terms and conditions My belief is people should honour the terms of the fare they paid for. As for a parachute. That is silly. Of course that would add a lot of cost. A similar example is asking a bus driver to stop outside your house. Or let you jump out the open door. Lots of insurance and liability reasons not to do so. The fact that fuel is the only aspect to a fare is obviously misinformed. It is like saying AWS only pay for data centre electricity.
- blackeyeblitzar 2y agoHow about we jail airline executives and fine airlines for overselling flights, forcing people to give up their seats, banning people for skiplagging, kicking people off based on clothing, etc. If they can be so arbitrary and refuse passengers, we should just revoke their license to operate.
- onlypassingthru 2y ago> Skiplagging is not illegal, but airlines view it as a policy violation that is grounds for termination of a traveler’s entire itinerary since the airline can't sell the empty seat in the onward flight. 'Can't' or 'aren't supposed to'? Airlines oversell flights ALL THE TIME. This just allows them to double sell the seat without having to ask anyone to volunteer for a free flight credit on a later flight. Seems like a win-win.
- ketralnis 2y agoAlso... they DID sell that seat. To the person that bought it, and paid for it, and then didn't use it. They didn't cost the airline any money. They paid for the seat. They don't get the money back for the seat they don't use. The airline keeps the money for it, while not incurring the costs of filling it.
- deleted 2y ago[deleted]
- ChrisArchitect 2y agoAmerican Airlines specifically on that title
- smashah 2y agoI don't understand how someone can be barred from an airline because they got a better deal on it. At a certain point there must be an individual who would've been barred from every airline due to this at which point it becomes some sort of cruel punishment on an individual from a whole industry for really doing nothing illegal or wrong or causing a nuisance. Airlines shouldn't be allowed to barr people simply for skipping a leg on a flight, no matter how much it may annoy someone in management.
- Dalewyn 2y ago>I don't understand how someone can be barred from an airline because they got a better deal on it. Because they cause a truly stupid amount of inefficiencies and hassle with their desire to save a buck at the cost of everyone else. I think American Airlines's marketing and legal teams dropped the ball as far as how they impressed the court of public opinion, as demonstrated by this very thread. "We couldn't make more money" will almost never speak to the common man. But speaking as someone who's familiar with the aviation industry and flies very often, shenanigans like this cause tremendous losses of time and money when margins are razor thin. A missing passenger means lost time trying to find that passenger which leads to flight delays. Once a passenger is deemed missing, their checked luggage if any needs to be offloaded which causes additional checks of the flight manifest and the cargo bay, leading to even more lost time and flight delays. A seat unoccupied-but-occupied means that seat couldn't have been used to deadhead the crew for another flight, which can include crews from other airlines. This makes scheduling logistics even harder than it needed to be, leading to inefficiencies and in the worst case flight cancellations. This all causes problems for people on the ground: The ground crew at the airports, the flight crew on the plane, the logistics team scheduling everything, and more. It's not just middle management that everyone here likes to flip off. Also a coup de grace for the audience here: Someone skiplagging means the airline flies an empty seat that should have been occupied, wasting fuel. Skiplagging is bad for the environment. I am very happy American Airlines won this, and I will say the same with any other airline. If you want to fly somewhere, buy a ticket specifically for that. If you engage in skiplagging, you are sincerely a greedy fucking bastard and deserve every blacklisting you get.
- 2y ago
- grakker 2y agoI really, really don't understand the airlines' problem with this. The seat was paid for, if nobody is in it, they save a fraction of a penny on fuel. What do they lose if the seat is empty vs the person still sitting in it? They get the exact same revenue. I'm so confused.
- perihelions 2y agoI'm astonished it's currently legal for airlines to ban passengers for optimizing their ticket fares—for taking the offers the airlines themselves publicly tender, and being too competent at choosing at the best one. - "American reportedly removed a 17-year-old from a flight last year and banned him for three years when he tried to fly from Gainesville, Florida, to Charlotte, North Carolina, on a ticket with a final destination of New York City. The ticket was supposedly cheaper than booking a flight to Charlotte alone." There ought to be a consumer protection law about it. Not one specific to airlines, but a universal protection—a "right to optimize", if you will. If you ban customers for taking advantage of a publicly-advertised offer, then why are you allowed to advertise that offer in the first place?
- euroderf 2y agoClearly there is no space under the law for common sense. They are in conflict.
- jfengel 2y agoThe advertised offer says "no skiplagging". It's buried in the fine print, but it is indeed there. You can probably get away with it once, if you convince them that you didn't know. But if you've done it before, they'll say that you knew what the terms of the deal were.
- dreamcompiler 2y agoSkiplagging is a very old practice. What's new here is just the website. Before 9/11 there was nothing the airlines could do to stop it because you didn't have to show ID to match your ticket. So they couldn't ban you even if they figured out you were skiplagging. Now they can and they do. Which is why the airlines love that the government "forces" them to check your ID.
- lifeisgood99 2y agoI also love that I don't have to ride the metal missiles with random unvetted people.
- 15155 2y ago> Now they can and they do. Which is why the airlines love that the government "forces" them to check your ID. Where is this happening? On over 100 domestic flights post-9/11, I've never had an airline review my ID - only on international flights has this occurred. The TSA or their private equivalent will match your ID to a boarding pass, but even now that's going away at major airports in favor of ID scans. Regardless, given the above: there's nothing stopping you from booking a refundable fare on Airline B (or even a $0 Frontier flight), using that boarding pass to get through security, and then using whatever name you want on a flight with Airline A.
- mandeepj 2y ago> then using whatever name you want on a flight with Airline A. Where do you live? Your boarding pass is scanned at the gate; you can’t just board any flight with your boarding pass from any other flight
- dreamcompiler 2y agoCommenter was talking about buying two different boarding passes. But even so the scheme won't work.
- 15155 2y agoYou use boarding pass A with a matching ID to get through security and then board an aircraft with boarding pass B with a random name on it.
- hilux 2y agoSo bogus. For those who are wondering, skiplagging does work, and can save you a boatload of $$$. AND you have to understand the system and have some attention to detail, especially internationally.
- dave333 2y agoOf course they can sell the seat - airlines oversell all the time since they know some people won't show. Just need to predict that with a few statistics and sell some extra tickets for the skiplagged leg. I think airlines should be required to make tickets to intermediary destinations no more expensive than the same class fare to the final destination then there is no incentive to book a skiplagged ticket and it would benefit consumers in less competitive markets. A case of a good regulation. Right now fares to popular competitive destinations are subsidized by price gouging on less popular destinations.
- divbzero 2y agoI didn’t know “skiplagging” was a thing, but I actually did it once myself and almost got in trouble for it. 1. I booked roundtrip A → B → C and C → B → A. 2. I skipped B → C because I needed to spend a few days at B. 3. I booked a separate one-way B → C which was cheap because it was a short hop. What I didn’t realize was that the airline canceled my C → B → A return trip when I skipped B → C. Fortunately, I discovered this early when I spoke to customer service about an unrelated question: the airline kindly explained to me what happened, warned me not to do it again, and rebooked my flight back.
- HeavenFox 2y agoThat is actually a different rule: the tickets have to be used in order. Say you booked round trip A to B back to A and decide to drive from A to B. Tada! Your B to A segment is automatically cancelled as well. In a way this is even more absurd than airlines banning hidden city ticketing.
- canjobear 2y agoI did this once too, and had to pay a “reinstatement fee” to get on the original trip back.