Summer air travel is in full swing, and people are getting ticket shock at what it costs to fly.
Airlines use a complex system to price their tickets, a consequence of the hub-and-spoke system used by legacy airlines such as Delta, United and American and dynamic pricing models that squeeze every last dollar out of every seat to make it more likely for airlines to stay profitable.
One consequence of this is hidden-city ticketing, sometimes referred to as skiplagging.
If a person wishes to fly from Roanoke, Va., to O'Hare International Airport, they can purchase a direct flight on United. Alternatively, they can purchase a connecting ticket on United from Roanoke to Madison, Wisc., with a stopover at O'Hare, and not use the Chicago-to-Madison segment. In doing so, they may save a little money.
Why would someone buy more flying? Because direct flights, particularly out of or into hub airports, are valued by flyers and can be priced at a premium compared with connecting itineraries.
The concept of hidden-city ticketing has parallels to pricing models used in other service industries.
Cellphone, television and Internet providers offer bundled packages that may include a collection of channels and services, some of which customers are not interested in. If users decided to individually purchase only those services they would like, they would find that their total cost may be higher.
If a traveler wishes to exploit this loophole, they may be rewarded with a lower cost to travel. They will also be assuming some risk that their planned stopover airport gets changed due to a flight cancellation or disruption. Airlines have no obligation to deliver the same route that was purchased, just the same destination.
The number of people employing hidden-city ticketing is likely small compared with the total number of travelers they carry. This means that the economic impact of hidden-city ticketing is also negligible, even if the optics of people using the strategy may be what is at the core of the airlines' dislike of the practice.
Hidden-city ticketing is not going away anytime soon. There is nothing intrinsically illegal about it, even if it gets under the skin of airlines. It is also a self-inflicted wound (and cost) of their highly successful economic model.
Congress recently re-authorized the Federal Aviation Administration. If the FAA really wants to help passengers, it should work across all airlines to create a standardized set of principles common across all contracts of carriage that all stakeholders can understand and agree to. It would also be a good time to remove threats against passengers associated with hidden-city ticketing, accepting that it will occur.
The most reasonable policy is to place the burden of responsibility on passengers who choose to use this ticketing approach, so if flights are disrupted, they, not the airlines, must accept the consequences of not flying through their connecting city. With such a sensible policy, hidden-city ticketing will likely remain a small fraction of all tickets issued.