22-year Old Sued for Exploiting Inefficiencies in Air Ticket Pricing

Who would have thought that launching a website to help people buy plane tickets could land you in trouble? This is exactly what has happened in the case of twenty-two year old Aktarer Zaman, who founded the website Skiplagged.com last year. Skiplagged.com assists travellers in booking cheap plane tickets via a strategy called “hidden city” ticketing, which exploits loopholes in air ticket pricing. This strategy has come under fire. United Airlines, along with its travel partner, Orbitz, recently filed a civil lawsuit against Zaman with the aim of recouping $75,000 in lost revenues.

So how does “hidden city” ticketing work? The main idea behind this strategy is that you buy a plane ticket that has a layover at your actual destination. Suppose you want to fly to Portland from Las Vegas. You book a flight from Las Vegas to Seattle with a layover in Portland. Once the flight lands in Portland, you get off there and ignore the final leg of the journey. Of course, this strategy will work only if you don’t have any checked bags; otherwise your baggage will simply go off to Seattle while you disembark at Portland! Moreover, for this system to work, you need to book a one-way flight.

As airlines often offer cheaper fares for some destinations that aren’t regional hubs, travellers usually end up saving hundreds of dollars through this strategy. Frequent flyers have been exploiting this loophole for years to get discounted airfares. This may be why United Airlines filed a lawsuit against Zaman – to discourage widespread knowledge of this travel hack. United and Orbitz have called Skiplagged “unfair competition” and alleged that the website is promoting “strictly prohibited” travel. What Zaman is doing is not illegal. On the downside, it can cost airlines dearly and result in widespread cancellation of flights. Moreover, if you do this often enough, your airline might terminate you from their frequent flyer program.

Bangladesh born Zaman lives in Manhattan and works at a technology start-up that he declined to name. He grew up in Brooklyn, N.Y., and holds a bachelor’s degree in Computer Science from Rensselaer Polytechnic Institute. According to Zaman, Skiplagged is just a side project. He has made no profit from the website, and his only intention is to help travellers get the best prices by exposing an inefficiency that insiders have been aware of for ages.

This is not the only inefficiency that prevails in the air ticket pricing system. Even an air ticket’s point-of-sale, the place where a retail transaction is completed, can affect the online price of any flight with an international component. Generally, when booked from the destination country or from the country where the airline is based, air tickets turn out to be cheaper. For example, even after taking into account the applicable foreign transaction fee surcharge, a one-way ticket booked from New York to Bangkok might turn out to be cheaper when booked from Thailand instead of the U.S. And all that you need to do in order to take advantage of this discrepancy is change your country to Thailand and your language to English while booking your ticket on the airline’s website.

Zaman recently said that he had no intention of shutting down his website, as giving in to pressure from big corporations will set a bad precedent. He is not alone in his fight either – thousands of donors have already contributed tens of thousands of dollars to help him pay his legal expenses. From the way things are moving, it seems that even if Skiplagged.com shuts down, other people will come forward to scrape fares and make them available to travellers. For the time being, it seems that “hidden-city” ticketing is here to stay.