United Airlines and its travel partner, Orbitz, are suing a 22-year-old entrepreneur from New York City who built a website to help people buy cheaper airline tickets by exploiting a loophole in the airlines’ pricing structures.
The strategy is called “hidden city” ticketing and Aktarer Zaman’s website, Skiplagged.com, shows visitors how to take advantage of it.
As CNN Money reports, users take exploit the loophole by booking a flight that has a layover at the intended destination. The example given in the article is a traveler who wants to fly from New York to San Francisco, but books a flight from New York to Tahoe with a stop in San Francisco. The Tahoe ticket is cheaper in many cases, but the traveler can get off in San Francisco and skip the connecting flight.
It’s a strategy that only works for one-way flights and when the traveler doesn’t check bags — which would arrive at the booked, final destination.
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But United and Orbitz say Zaman’s site amounts to “unfair competition” and is promoting “strictly prohibited” travel. They are suing him for $75,000 in lost revenue and trying to get his site shutdown. The companies filed the lawsuit last month alleging that “Zaman has intentionally and maliciously used Skiplagged to damage [their] businesses.”
Zaman, however, says he is not profiting from the site and is only providing information on how to book the flights by exposing the “inefficiency” in airline prices. He has another job and calls the site, which he runs from his Manhattan apartment, a “side project.”
“[Hidden city ticketing has] been around for a while, it just hasn't been very accessible to consumers,” Zaman said.
He maintains that what he is doing is not illegal, although he admits he expected a lawsuit.
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Yahoo Travel Executive Editor Laura Begley Bloom recently told CBS News she believes United just doesn’t want people knowing about the loophole.
“This has been a dirty little secret of the travel industry for a really long time,” Bloom said. “Then along came Skiplagged, and your average traveler suddenly knew about it.”
And that could mean the airlines are losing out on other ticket sales.
“Think about it; they could have flown you at a higher rate into that middle city and then booked somebody for that next leg too, so it's a revenue loss for them. If they catch you on it, they say that they'll freeze your frequent flier miles,” Bloom added. “They might not let you book tickets in the future; they might not let you take a return flight. It's really pretty threatening.”
Orbitz told CBS News that Zaman’s argument that he isn’t actually selling tickets or profiting is “disingenuous.” United said the lawsuit is only meant to “protect the vast majority of customers who buy legitimate tickets.”
Zaman said the money he uses to run the site is getting low and is now accepting donations to help him fight the lawsuit.