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Brickell305
Posts: 675
Joined: Sat Jun 24, 2017 2:07 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:11 pm

ScottB wrote:
LAXintl wrote:
The whole airline pricing model is based on individual market dynamics. So a ORD-SFO-LAS journey might be cheaper than simply a ORD-SFO booking.


Consumers aren't responsible for the airline pricing model. The airline is perfectly free to NOT price the longer journey lower than the shorter one, thus avoiding this issue entirely.

LAXintl wrote:
Yes some passengers think they are clever by skipping a last leg, airlines imo very much have a right to go after such customers and in egregious cases should seek the fare difference or do things like suspending their frequent flyer account if applicable.

Ultimately when you buy a fare, you agree to the terms. Just like the airline needs to compensate you for deviations from the agreement, the customer should be held liable for their end of the agreement as well.


Except that airline contracts of carriage by their very nature are contracts of adhesion, and apart from very limited circumstances (i.e. special agreements with large volume customers) customers have no leverage whatsoever in negotiating the terms. The airlines to date have eschewed suing customers for violating these contracts not because they wouldn't love to get the revenue, but rather because they fear that there's a very real possibility that the provisions against hidden-city ticketing would be found to be unenforceable.

And the U.S. airlines only compensate passengers for deviation from the agreement in rare occasions. Got you there two hours late due to a mechanical problem? You'd be lucky if they even apologized.

Exactly. There's a major risk to the airlines in trying to pursue this legally against passengers.
 
ethernal
Posts: 88
Joined: Mon May 06, 2019 12:09 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:18 pm

RDUDDJI wrote:
AEROFAN wrote:

Fraudulent used a more expensive service, you said, How so? Which part of the service is more expensive? Is the water being served different, more expensive? Does the seat change? More fuel used?Different air? Do you get different food? What makes this more expensive?


Ummm, yeah, slow clap. You talking about *airline* costs, those are irrelevant in this equation, airlines don't use a "cost +" model (very few vendors do). Please try to follow along.

Filght XXX-YYY is say $500 one-way. Flight XXX-YYY-ZZZ is $300. If customer pays $300 to travel XXX-YYY-ZZZ, but intentionally only flies XXX-YYY, the airline has lost $200. It really is that simple. I can't believe I had to explain this, again.

Then like I said, the airline potentially loses the chance to sell the YYY-ZZZ seat that the cust never intended to use.


The YYY-ZZZ seat is a red herring and even under the strictest and most airline favor interpretation has no bearing. The only interpretation that has any relevance is XXX-YYY. The reason is that this was real demand. A passenger wanted to fly from XXX-YYY - that was demand that was in the marketplace. YYY-ZZZ never had that demand, and therefore the counterfactual (OP not flying that leg) has no economic , financial, or legal relevance. Of course in the first event, if the passenger bought XXX-YYY, then yes, United could have sold another YYY-ZZZ ticket. But United voluntarily foreclosed on that option when they sold the ticket and more importantly, that demand never existed and, therefore, there is no loss. United would not have sold that YYY-ZZZ ticket at a higher price, or if they could have, they should not have sold the passenger XXX-YYY-ZZZ.

The reason why YYY-ZZZ matters is because there was real demand that could have bought the ticket but instead bought the hidden-city ticket instead. The fundamental question is whether or not the passenger would have bought the YYY-ZZZ ticket at the price and terms listed. This is where proving damages becomes extremely difficult. Would the passenger have bought it? Maybe, or maybe not. Perhaps they would have flown another carrier, or perhaps they would not have taken the flight at all because it was just too expensive.

Since there are no liquidated damages referenced in the contract of carriage (at least from the passenger's side), there is absolutely no way a court would ever rule in the airline's favor here - especially in a unilateral adhesion contract.

So whine all you want about it being "unfair" or some strained definition of "theft" or material fraud, but given the grey area that the airlines operate in (schedule changes, overbooking, and so on), what matters is what is legal and what is supported by courts and regulatory bodies. And the answer here is that, for all intents and purposes, hidden city ticketing is perfectly legal (at least in the US).

This is no more or less "theft" or "unfair" than an airline doing a material schedule change. Sure, they'll rebook you on another itinerary for free, but it may be inferior. Or they will give you a refund and tell you to go rebook another airline. But, oh, wait, now comparable tickets are 50% more expensive than they were before. Is the airline going to compensate me for that loss? No, they won't. Just because the unilateral adhesion contract protects the airline in every way imaginable doesn't somehow make this "better" from a moral or legal perspective. There is just as much ground (and to be clear, there isn't much ground at all) - if not more - to sue United under the guise of promissory estoppel or similar for selling a ticket that they schedule change on that results in me incurring additional costs than there is for United to sue a passenger for hidden city ticketing.

As I said before, good luck to United. They are free to do what they wish as it relates to allowing passengers to do hidden city ticketing or not - whether that is revoking frequent flyer status or banning them from flying. But making claims that hidden city ticketing is theft from the airline, material fraud, or would be considered illegal in a criminal case or result in damages in a civil case is just nonsensical.
Last edited by ethernal on Fri Aug 02, 2019 2:20 pm, edited 1 time in total.
 
MIflyer12
Posts: 5827
Joined: Mon Feb 18, 2013 11:58 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:19 pm

LAXintl wrote:
Yes some passengers think they are clever by skipping a last leg, airlines imo very much have a right to go after such customers and in egregious cases should seek the fare difference or do things like suspending their frequent flyer account if applicable.

Ultimately when you buy a fare, you agree to the terms. Just like the airline needs to compensate you for deviations from the agreement, the customer should be held liable for their end of the agreement as well.




You know, LAXintl, you assert that, but contract terms are found unenforceable by U.S. and state courts every day. The fact that a term is in the contract doesn't, itself, mean it's enforceable. That's why I'd LOVE to see this go to court (and UA lose) - even better than an FTC ruling (which carriers would surely try to have struck down), a court victory would confirm to millions of consumers that prohibitions against hidden-city use are nonsense. Then the cat would most emphatically be out of the bag for every itinerary starting or ending in the U.S.
 
afcjets
Posts: 2889
Joined: Thu Jan 01, 2015 6:20 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:33 pm

77H wrote:
I was asking for examples of nonstop flights that people are likely to employ the hidden ticket fare scheme. So for instance, TUS-SFO-SEA where the desired city is SFO. While you’re right, that UA is the only airline that flies TUS-SFO, WN and AS serve the same market. So why employ this scheme when there are other options? If you are willing to employ this scheme, it’s likely you’re chasing the low fare. People chasing low fares are often less concerned about the convenience of 1 airport over another within the same market.

But this is beside the point. The premise under which people are most likely to employ this scheme is on high demand routes where UA or another carrier can get top dollar. So the premise is that one would buy ORD-SFO-TUS instead of buy ORD-SFO because the airline is likely to offer a lower fare through to TUS to stimulate demand on the SFO-TUS leg, rather than the ORD-SFO leg. Which brings me to my original point that UA doesn’t have a monopoly on ORD-SFO. So instead of buying a ticket to TUS, why not use another carrier that operates nonstop or use a carrier that gets you to that market.

I’m trying to look at this from the stand point that anyone looking to employ the hidden city scheme would likely have to plug in numerous city pairs while ensuring the connection point is the hidden city you truly want to go to. Seems like time consuming work when one could check AA, DL, NK or even WN out of MDW...


I think the point your missing is most people who use hidden city do it where the hidden city fare is lower than any published fare in the market on any airline. It is somewhat a misconception that airlines charge a premium for nonstops on a widespread basis in that while fares to and from hubs in absence of ULCC competition and other nonstop competition tend to be higher, US3 often have the exact same fares where the nonstop and connecting flight on another airline are the same price. If you are finding a lower fare on a US3's connecting flight, it is often based on inventory management. US3 legally collude on pricing in that if DL posts a fare in DFW that AA doesn't like (i.e DFW-SNA), AA will return the favor and do the same in ATL (i.e ATL-SNA), and of course DL will raise the fare in DFW to AA's liking and AA will then cancel or raise the ATL fare. What makes it legal is during this time of collusion, they are offering the lower price for sale and the DOJ ruled that benefits the consumer (even though in the long run it doesn't but it would be hard to enforce anit-collusion in this manner anyway)

Also, hidden city only works one-way and there are other risks too, so it is unlikely the average flyer would try it. In your example if ORD-SFO is more expensive than ORD-SFO-TUS, it only works on the outbound where you skip your last flight. It would not work SFO-ORD because once you no-show TUS-SFO, your SFO-ORD is cancelled and UA is not going to let you board in SFO without paying a higher fare (which is probably even higher last minute) and a $200 change fee. And on the outbound you have to have carry on only (with UA actually only a personal item if you purchase Basic Economy where they don't even allow carry-on) because they are not going to check your bags just to SFO. And in the case of a flight cancellation or delay, they may have to re-route you via a different hub. You could always ask for a refund in that case and likely get it, but you would likely have to pay way more than you would had you originally booked a ticket to SFO at the point.
Last edited by afcjets on Fri Aug 02, 2019 2:46 pm, edited 4 times in total.
 
USAirALB
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:39 pm

I guess I am interested in where UA would be willing to draw the line in regards to making exceptions for customers and what "proof" they would require from customers.

Case in point: a friend of mine flew EWR-MAD-IAD-EWR the other day. At the time of booking, her itinerary in that order was $281 R/T on a Basic Economy ticket. When she booked her flight to MAD, I looked at tagging along, but every UA flight ex IAD to MAD was at least $1000.

Long story short, her father was in DC the night that she landed back in IAD and skipped the IAD-EWR leg to have dinner with him, and then just took the train home to NYC. She tried to have an agent in IAD cancel the next leg, explaining the situation, with the agent claiming she wasn't permitted to do so and she would have to continue, "because the she originated at an international destination". She ended up just walking out of the terminal.

Anyways, I fail to see the logic of coming after pax in situations such as this.
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RDUDDJI
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:45 pm

PSA: Cost and Price are not the same thing. When you buy something, do you see the vendor's cost? Of course not.

PatrickZ80 wrote:

No, it ain't like that.

I'd more likely compare it to a customer walking into a store for a 1 liter bottle of cola. They have them, but they also have a 2 liter bottle on sale for actually less than the price of a 1 liter bottle. But the customer only needs 1 liter, not 2. So the customer buys that 2 liter bottle, drinks half of it and throws away the rest.

Is that stealing? No, of course it isn't. It's just not consuming part of a product you've paid for, which is legal. It's the store who is to blame for selling that 2 liter bottle cheaper than a 1 liter bottle.

This is nothing different. It's the airline who is to blame for selling a 2-leg flight cheaper than a 1-leg flight. The customer is fully within it's rights for only consuming half of the product, no matter if that product is a bottle of cola or a flight ticket.


I got a good laugh out of that. Those two things are nothing alike. In your example the customer bought a good, after that what they do with is irrelevant. A customer buying a *service* is completely different.

Here's a comparison of services that is somewhat similar. Let's say you want to visit the London Eye (took the kids there last week and these are prices I recall). A general ticket may be £27/pp (online) but you have to wait in line for ~45 minutes. But if you want to skip the line the ticket is £37. Both tickets are to take a loop on the Eye. People who value their time may pay the additional £10 and get there faster. At the end of the day, both customers get the same Eye experience, but one saves time (which is of value).

Just like a shorter non-stop flight saves time and reduces risk of misconnections/issues with an additional flight. That is of value which is why people bother with hidden city ticketing as opposed to just buying a connecting flight through another city/airline.

PatrickZ80 wrote:
RDUDDJI wrote:
You obviously don’t understand how airline pricing models work. This makes a difference in two different ways. A) customer paid for a service, but fraudulently used a more expensive service. (Revenue Loss) B) in the scenario of hidden city where customer books XXX-YYY-ZZZ but only intends to fly XXX-YYY, then the airline loses a bookable seat on YYY-ZZZ. In the age of computers, they do a decent job of trying to recover that lost booking through things like overbooking, but it still creates waste (read: cost) for the airline.

I’m not defending the practice, just pointing out that there is a cost to the airline. For peeps to suggest otherwise just because they don’t like or agree with the practice is silly.


No, there is no revenue loss to the airline. The customer paid for a service and fraudulently uses a service that the airline charges more for, that's true.


Your first sentence is false, second is true. Glad you agree they lost the additional revenue.

PatrickZ80 wrote:
Keep in mind, I'm not saying it's a more expensive service like you do. Actually for the airline it's a cheaper service, they only charge a higher price for it.

The revenue loss is entirely to blame on the airline as they shouldn't have sold it below cost price.


The airline's costs are irrelevant to the customer (just like they are in your cola example). Airlines don't use "Cost +" pricing models (neither do cola companies FWIW). I haven't seen anyone say they sold it "below cost", but again, customer's don't pay based on the vendor's cost. I suspect there are many thousands of below cost airline seats sold everyday, but that's the airline's problem, not the customer's. Costs can be subject to change before the service is used anyway (e.g. fuel prices).
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afcjets
Posts: 2889
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:52 pm

USAirALB wrote:
I guess I am interested in where UA would be willing to draw the line in regards to making exceptions for customers and what "proof" they would require from customers.

Case in point: a friend of mine flew EWR-MAD-IAD-EWR the other day. At the time of booking, her itinerary in that order was $281 R/T on a Basic Economy ticket. When she booked her flight to MAD, I looked at tagging along, but every UA flight ex IAD to MAD was at least $1000.

Long story short, her father was in DC the night that she landed back in IAD and skipped the IAD-EWR leg to have dinner with him, and then just took the train home to NYC. She tried to have an agent in IAD cancel the next leg, explaining the situation, with the agent claiming she wasn't permitted to do so and she would have to continue, "because the she originated at an international destination". She ended up just walking out of the terminal.

Anyways, I fail to see the logic of coming after pax in situations such as this.



I wouldn't even consider it on an international flight. TSA and/or Customs scans your passport and itinerary and there is a lot more security with international. It's one thing to end up on United's radar and another to end up on theirs which would be for suspicious activity, and not because they are concerned about how much money United made or lost on your ticket.
 
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TheLark
Posts: 46
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 2:55 pm

My suggestion for a fare policy avoiding hidden cities: You buy a ticket that entitles you to fly from A to B, leaving A no earlier that a specified start time and arriving at B no later than a specified arrival time. As long as these conditions are met, the airline may put you on any flight or flights they may choose, using any route they may choose. Maybe an hour or two before the specified start time you receive a text saying something like "Your flight from A to B today will be flight AB123 via X: departure time 07:35, gate D21."

The price may vary according to the interval between the earliest start and latest arrival time, with longer intervals being obviously cheaper. I think such a policy might have advantages for both airlines and customers.
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RDUDDJI
Posts: 2103
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 3:02 pm

ethernal wrote:
RDUDDJI wrote:

Ummm, yeah, slow clap. You talking about *airline* costs, those are irrelevant in this equation, airlines don't use a "cost +" model (very few vendors do). Please try to follow along.

Filght XXX-YYY is say $500 one-way. Flight XXX-YYY-ZZZ is $300. If customer pays $300 to travel XXX-YYY-ZZZ, but intentionally only flies XXX-YYY, the airline has lost $200. It really is that simple. I can't believe I had to explain this, again.

Then like I said, the airline potentially loses the chance to sell the YYY-ZZZ seat that the cust never intended to use.


The YYY-ZZZ seat is a red herring and even under the strictest and most airline favor interpretation has no bearing. The only interpretation that has any relevance is XXX-YYY. The reason is that this was real demand. A passenger wanted to fly from XXX-YYY - that was demand that was in the marketplace. YYY-ZZZ never had that demand, and therefore the counterfactual (OP not flying that leg) has no economic , financial, or legal relevance. Of course in the first event, if the passenger bought XXX-YYY, then yes, United could have sold another YYY-ZZZ ticket. But United voluntarily foreclosed on that option when they sold the ticket and more importantly, that demand never existed and, therefore, there is no loss. United would not have sold that YYY-ZZZ ticket at a higher price, or if they could have, they should not have sold the passenger XXX-YYY-ZZZ.


That's all speculation. And all of that could be the other way around. Closer to departure the value of YYY-ZZZ goes up. Fact is this: Airline potentially loses the chance to sell that YYY-ZZZ ticket. We can argue all day about what that's worth, but if it's worth more than 0, it's still a loss.

ethernal wrote:
The reason why YYY-ZZZ matters is because there was real demand that could have bought the ticket but instead bought the hidden-city ticket instead. The fundamental question is whether or not the passenger would have bought the YYY-ZZZ ticket at the price and terms listed. This is where proving damages becomes extremely difficult. Would the passenger have bought it? Maybe, or maybe not. Perhaps they would have flown another carrier, or perhaps they would not have taken the flight at all because it was just too expensive.

Since there are no liquidated damages referenced in the contract of carriage (at least from the passenger's side), there is absolutely no way a court would ever rule in the airline's favor here - especially in a unilateral adhesion contract.


All well and good. I don't care one way or the other, I'm just pointing out mistakes in hidden ticketing fan's false justifications. I could care less about the legal implications.

ethernal wrote:
So whine all you want about it being "unfair" or some strained definition of "theft" or material fraud, but given the grey area that the airlines operate in (schedule changes, overbooking, and so on), what matters is what is legal and what is supported by courts and regulatory bodies. And the answer here is that, for all intents and purposes, hidden city ticketing is perfectly legal (at least in the US).


I never said any "unfair" or "theft" or "material fraud" in any of my posts on the subject?!

Provide your source that says it's "perfectly legal".
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PI4EVR
Posts: 40
Joined: Sat Jun 01, 2019 4:29 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 3:08 pm

This is a classic case that involved my next door neighbor. I could not offer him any advice as to how to spend his money, and while he's not a frequent flyer, I did suggest he simply not enter his frequent flyer account # when booking the trip. That is likely the only way "corporate security" can track any repeat patterns of travel.
I found out afterwards he did book and fly, and even had the courtesy to cancel the final leg in PHL advising the agent a family member had shown up and he was now riding with them. Not a total lie. His family did pick him up.
So he was flying DEN-PHL. One-way fare $443. A connection DEN-PHL-BWI priced at $179 to likely match a WN fare. Flight to PHL was on the desired flight that otherwise would have cost $443.
What would you do?
 
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NeBaNi
Posts: 448
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 3:09 pm

DarkSnowyNight wrote:
JWKIII wrote:
jetmatt777 wrote:
I think a fun policy once a hidden city customer is identified is to upgrade them to F class but on a different routing and see what their reaction is.

“Mr. Smith, we have upgraded you to F today however you will be routed through IAH instead of DEN on your way to LAS.” But I was only trying to get to DEN!


Love that suggestion. It would be a classy way of telling a passenger that the airline is aware of them playing the system without having to fear bad publicity! Simply brilliant.


What? No, that's an entirely stupid idea.

AFAIK, a passenger doesn't have to accept the offered upgrade. (S)he could simply refuse the upgrade and keep the original routing.

flyingclrs727 wrote:
Well it's pretty much impossible to take advantage of hidden city pricing with checked baggage. Maybe the airlines should require a checked bag go to the ticketed destination.

Probably #1 on the list of "How to Drive Business Travelers Away from Your Airline"
 
ScottB
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 3:23 pm

RDUDDJI wrote:
Then like I said, the airline potentially loses the chance to sell the YYY-ZZZ seat that the cust never intended to use.


This is immaterial because the customer already paid for that seat. If the airline thought they could maximize revenue by selling XXX-YYY and YYY-ZZZ separately, then it's the job of revenue management to make that happen. If I purchase concert tickets in Chicago and Milwaukee but decide not to show up for the show in Milwaukee, are the artist/promoters being denied the opportunity to sell my seat in Milwaukee? Nope, that seat was bought and paid for.

UpNAWAy wrote:
Each one is a Unique and is priced according by passenger demand. If you don't notice this is an extremely price sensitive business. All produced at the store is not priced the same Avocados cost more than Apples just as Non Stop Market may cost more than a connection.


Except that while the airlines are selling travel from point A to point B, they identify a set of discrete components to that travel. So the better analogy is selling a ham sandwich and charging more for that than a ham-and-cheese sandwich made with the same bread, same condiments, and same quantity of ham.

GalaxyFlyer wrote:
What’s wrong with your analysis is that it is NOT cheaper to operate the non-stop. It’s more expensive, as a system, because they operate a hub to make more city-pairs available to the public and the non-stop doesn’t contribute to the hub operation. Yes, the individual flight is cheaper, but the overall system loses revenue and the public would eventually lose city-pair choices.


The non-stop is absolutely cheaper to operate. The airline spends less money to operate one flight than two. You are conflating revenue with expenses and they are very different things. Airlines don't operate hubs just to maximize the number of available city-pairs they can offer. They also operate hubs in order to extract the greatest amount of revenue from people beginning or ending their journeys at the hub airport.

PatrickZ80 wrote:
I'd more likely compare it to a customer walking into a store for a 1 liter bottle of cola. They have them, but they also have a 2 liter bottle on sale for actually less than the price of a 1 liter bottle. But the customer only needs 1 liter, not 2. So the customer buys that 2 liter bottle, drinks half of it and throws away the rest.


I experienced something very similar at the supermarket last month. I was in the soft drink aisle and two-liter bottles of brand C cola were $1.89 each or five for $5.00 -- but only if you bought five. Two women who walked up were only planning to buy two and I mentioned to them that if they bought three more they'd essentially be getting those three for a little over a buck.

Point being: if I only wanted three bottles and gave the other two away or chucked them in the trash or poured the contents down the drain, would I be "stealing" from the supermarket because I paid only $5 instead of $5.67? No, the idea is absolutely ludicrous. It's not theft. It's breaking what is very likely an unenforceable clause of a contract of adhesion.

alasizon wrote:
The portion I quoted (that you conveniently deleted) explicitly states that stopovers are not permitted. As they define it, an intentional interruption (such as not getting on the downline flight) is forbidden. Just because they don't use the words "hidden city" doesn't mean they allow it.

b. Stopovers
(1) A stopover is an intentional interruption of the itinerary by the Passenger. No stopovers are permitted on published fares, except upon combination of individually purchased One-way fares.


Page 8 of the Contract of Carriage.


No, you are confusing the idea of a stopover with a hidden city. What Southwest is saying in its CoC is just that they will not sell you something like BWI-MDW and MDW-OAK (with a stopover of more than four hours at MDW) as part of a one-way or round-trip BWI-OAK fare. You'd have to book it as multiple one-way tickets.
 
RDUDDJI
Posts: 2103
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 3:59 pm

ScottB wrote:
RDUDDJI wrote:
Then like I said, the airline potentially loses the chance to sell the YYY-ZZZ seat that the cust never intended to use.


This is immaterial because the customer already paid for that seat. If the airline thought they could maximize revenue by selling XXX-YYY and YYY-ZZZ separately, then it's the job of revenue management to make that happen. If I purchase concert tickets in Chicago and Milwaukee but decide not to show up for the show in Milwaukee, are the artist/promoters being denied the opportunity to sell my seat in Milwaukee? Nope, that seat was bought and paid for.



It is material. There's a low bucket fare (that won't be used) taking up a seat that could have potentially been sold at a higher price closer to departure (either YYY-ZZZ or WWW-YYY-ZZZ).

Your concert example is only relevant if the concert raises prices closer to departure. Then a potential loss happens as above. The difference is, it's highly unlikely for someone to buy concert tickets they never intend to use (or resell in the case of scalpers) and I doubt their contract explicitly forbids it. In the HCT case, people are buying a service and intentionally planning to break the contract of said service.
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RDUDDJI
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:23 pm

MIflyer12 wrote:

You know, LAXintl, you assert that, but contract terms are found unenforceable by U.S. and state courts every day. The fact that a term is in the contract doesn't, itself, mean it's enforceable. That's why I'd LOVE to see this go to court (and UA lose) - even better than an FTC ruling (which carriers would surely try to have struck down), a court victory would confirm to millions of consumers that prohibitions against hidden-city use are nonsense. Then the cat would most emphatically be out of the bag for every itinerary starting or ending in the U.S.


I too look forward to seeing this play out in the US Court system, if it ever does. I don't really care which way they find (it doesn't directly affect me), but it would be interesting to see a court ruling on it one way or the other.
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umichman
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:26 pm

I take the middle ground. I've done hidden city a number of times, and it's sort of difficult to think of it as "theft". On the other hand, I understand the business model and don't really see that the legacy airlines should be required to change it. The reality is that if they abandoned the model and started charging less for the non-stop's something is going to give. Such as higher prices on connecting flights, or less/no service to smaller communities where hub-and-spoke is really the only logical method for connecting them, etc. Beware the unintended consequences. I'm definitely opposed to a rigid system where everything is based on actual cost/distance, etc.
Last edited by umichman on Fri Aug 02, 2019 4:39 pm, edited 2 times in total.
 
ScottB
Posts: 6641
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:27 pm

RDUDDJI wrote:
It is material. There's a low bucket fare (that won't be used) taking up a seat that could have potentially been sold at a higher price closer to departure (either YYY-ZZZ or WWW-YYY-ZZZ).


No, it's not. In selling the WWW-YYY-ZZZ ticket, the airline already chose to accept that the seat would be occupied by that passenger for the fare he or she paid. If they want to be able to resell that seat, then they would need to buy that seat back from the passenger. It's not a lost revenue opportunity because they got paid for the seat flown, even if it's empty, just as concert promoters and artists get paid for seats that go empty if they've been sold to customers.

In fact, because airlines overbook, they do have the opportunity to sell that seat twice if they choose to do so. If the airline's revenue management model predicts they could have sold the YYY-ZZZ ticket in a higher fare bucket, they should never have sold the WWW-YYY-ZZZ ticket -- that is the airline's mistake.
 
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PatrickZ80
Posts: 3915
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:34 pm

RDUDDJI wrote:
Ummm, yeah, slow clap. You talking about *airline* costs, those are irrelevant in this equation, airlines don't use a "cost +" model (very few vendors do). Please try to follow along.

Filght XXX-YYY is say $500 one-way. Flight XXX-YYY-ZZZ is $300. If customer pays $300 to travel XXX-YYY-ZZZ, but intentionally only flies XXX-YYY, the airline has lost $200. It really is that simple. I can't believe I had to explain this, again.


Sorry, but I still disagree with you. Indeed, airlines don't use a "cost +" model and that's exactly their problem. They should use that "cost +" model, passengers do so airlines should follow suit.

Flight XXX-YYY is $ 500 one-way and flight XXX-YYY-ZZZ is $ 300. That's the problem. A passenger flying XXX-YYY costs the airline a certain amount of money, regardless if this passenger is getting off at YYY or flies on to ZZZ. The costs for that XXX-YYY leg don't change, but the price charged for it does. This doesn't make sense to customers, it just can't be explained. I've heard a lot of bullshit reasons for it, but so far nothing that holds any ground.

You say they lost $ 200 because the passenger got off at YYY. Again, I disagree. Yes, they lost income but that's their own fault. They priced their flights wrong. If $ 300 covers the costs of $ XXX-YYY-ZZZ then it certainly covers the costs of XXX-YYY. If it doesn't, they lose money on it and therefor the price of XXX-YYY-ZZZ should go up. Of course I hear you say, that's the "cost +" model and airlines don't use that. But as I said, passengers do and with the "cost +" model in hand passengers demand an explanation based on that "cost +" model from the airlines. So far the airlines are failing miserably at that.

RDUDDJI wrote:
As I said before, just because one doesn't agree or like the rules, doesn't change the fact that it does cost airlines money.


As I said before, airlines don't lose money. They might lose expected revenue, that's something else (and entirely on the airline to blame). But they don't make extra costs if a passenger decides to skip a leg, so therefor they don't lose actual money.
 
GalaxyFlyer
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:38 pm

flyingclrs727 wrote:
Well it's pretty much impossible to take advantage of hidden city pricing with checked baggage. Maybe the airlines should require a checked bag go to the ticketed destination.


Simple-free checked bags and charge for carry-on. It would solve more than hidden city cheating or gaming, as you prefer,

I doubt an airline really requires cracking down on hidden city fares to make a profit-I’d bet it is a small loss
 
ikramerica
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:47 pm

are they including back-to-back tickets in this crackdown?

there can be times where booking two tickets that "connect" is cheaper than one connecting flight. Airlines used to link them when you got to the airport, but would warn you that misconnects are your problem and that you would be standby on later flights. You can sometimes save a lot vs. doing a stopover ticket, or doing 3 one-ways. At least that used to be true.
Of all the things to worry about... the Wookie has no pants.
 
MSPNWA
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:49 pm

I would love to see this go to court. I think the airlines would be in trouble, opening up the whole can of worms.

I'm not feeling bad that the "consequence" of hidden-city is that the airline couldn't sell a product twice.
 
blockski
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:55 pm

RDUDDJI wrote:
MIflyer12 wrote:

You know, LAXintl, you assert that, but contract terms are found unenforceable by U.S. and state courts every day. The fact that a term is in the contract doesn't, itself, mean it's enforceable. That's why I'd LOVE to see this go to court (and UA lose) - even better than an FTC ruling (which carriers would surely try to have struck down), a court victory would confirm to millions of consumers that prohibitions against hidden-city use are nonsense. Then the cat would most emphatically be out of the bag for every itinerary starting or ending in the U.S.


I too look forward to seeing this play out in the US Court system, if it ever does. I don't really care which way they find (it doesn't directly affect me), but it would be interesting to see a court ruling on it one way or the other.


I suspect if it got to the US courts, the answer would be:

1) Yes, the airlines can do this with their pricing.
2) No, it's not theft for passengers to exploit the pricing model and the courts will not enforce these rules, but...
3) Airlines are free to enforce their own rules, including the forfeit of FF miles or status or whatever.
 
Skisandy
Posts: 49
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 4:56 pm

Hey, you're getting fat!

The supermarket made me eat all the potatoes I bought …. 2 pounds.
I was full after eating half, but they threatened me with taking my
discount card away, prohibiting me from entering their store for a year,
and asking for compensation for their loss.

What loss?

Well, one pound costs more than two pounds. Their 15 page contract with
their customers says that they are allowed to maximize profits, but the
customer is not allowed to minimize cost.

How crazy is this?

The contract is written its entirety by their lawyers and is non negotiable.
Take it or leave it. The next store is 20 miles down the road.. you are free
to drive down there if you don't like our rules.
 
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PatrickZ80
Posts: 3915
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 5:08 pm

blockski wrote:
I suspect if it got to the US courts, the answer would be:

1) Yes, the airlines can do this with their pricing.
2) No, it's not theft for passengers to exploit the pricing model and the courts will not enforce these rules, but...
3) Airlines are free to enforce their own rules, including the forfeit of FF miles or status or whatever.


That remains to be seen.

There are various court cases going on about this in Europe and it looks like the airlines are losing. This would mean that, at least in Europe, hidden cities would be allowed and it is up to the airlines to match their prices for direct flights to those with a tag-on flight. Several European airlines are ahead of the court ruling and already do this. If the American judge looks at this European outcome, I guess it'll have the same outcome in the US.
 
Aliqiout
Posts: 291
Joined: Wed Oct 05, 2016 6:10 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 5:26 pm

Skisandy wrote:
Hey, you're getting fat!

The supermarket made me eat all the potatoes I bought …. 2 pounds.
I was full after eating half, but they threatened me with taking my
discount card away, prohibiting me from entering their store for a year,
and asking for compensation for their loss.

What loss?

Well, one pound costs more than two pounds. Their 15 page contract with
their customers says that they are allowed to maximize profits, but the
customer is not allowed to minimize cost.

How crazy is this?

The contract is written its entirety by their lawyers and is non negotiable.
Take it or leave it. The next store is 20 miles down the road.. you are free
to drive down there if you don't like our rules.

You can't compare a good with a service like that. You get the same potato whether it was part of a two pound package or a one pound package. When airline tickets are sold, the product is transportation between two destinations. There may be more value in faster transportation between the two places (non stop), more comfortable transportation, or more reliable transportation, but otherwise the cost is based on the competition, and demand for the travel between the two points. If the competition and demand does not allow for high enough profits after operating costs, the flight may be dropped.

So hidden city ticketing is not like a 1 vs. 2 lb bag of potatoes. It is like paying for a bag of russet potatoes and taking a smaller bag of ultra rare Peruvian black potatoes that cost twice as much.

All thay being said, I don't blame people for using hidden city ticketing. Its one if the few ways passengers can get the upper hand over the huge cooperate behemoths airlines are. I also think it is bad policy for the airlines to demand the price difference. Besides the bad publicity, as mentioned above, the next best option for most that use hidden city ticketing isn't buying the correct ticket on the same airline. Collecting the fare difference would mean the airline is making an extra profit, not just collecting lost revenue.

Voiding frequent flyer miles and a warning is what I think is appropriate for a first time offender. Most doing this, think they are being tricky, but don't realise they are in violation of any contract.
 
jplatts
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 5:57 pm

There are some real issues with hidden-city ticketing for UA (apart from lost revenue), including the following:
(a) Reduced availability of seats on the B-C leg due to passengers having reservations for flights that they do not intend to take,
(b) Possibility of higher than normal fares on the B-C leg due to fewer seats available for sale due to hidden-city ticketing,
and
(c) Lower load factors on the B-C flights due to no-shows resulting from hidden-city ticketing.

There is also a risk that passengers will be ticketed on a nonstop flight or a flight through another hub in the event of delays or cancellations on the A-B or B-C legs of the itinerary.
 
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DarkSnowyNight
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:17 pm

NeBaNi wrote:
DarkSnowyNight wrote:
JWKIII wrote:

Love that suggestion. It would be a classy way of telling a passenger that the airline is aware of them playing the system without having to fear bad publicity! Simply brilliant.


What? No, that's an entirely stupid idea.

AFAIK, a passenger doesn't have to accept the offered upgrade. (S)he could simply refuse the upgrade and keep the original routing.



Ding. We have a winner.

JWKIII wrote:

Why do you think so? Some more context please.

Btw: Just because it is a brilliant idea does not mean that I honestly think any airline would ever do that! But it is brilliant. If the airline's analysis of the passenger is wrong and the pax actually wants to go to LAS, well the pax will be happy and the airline's loss is marginal. If the airline is right, however, the passenger will have a very hard time to explain the reason not to accept that upgrade! At the same time the airline is not making the pax losing his face and thus there will be no risk of a public shitstorm! I could actually imagine something like that happening in Japan, except that in Japan I cannot see passengers trying to trick the system.


Sure. It's a dumb idea because there are two possibilities. ..

First, they've done nothing wrong and they take you up. Way to go there, you've just removed an FC seat from revenue stock for no reason. And since that's the crux of the issue, you'd get something akin to a What the hell do you think you're doing from Rev Mgmt over the issue.

Second, they are taking advantage of the situation. And they simply refuse your offer. There's nothing forcing a PAX to take an upgrade. And as a CSR/A, you can't just randomly reroute someone all William Nilliam without a delay, tech swap, CanX, etc to show for it. That's the best possibility since you've lost nothing. But you've also expended effort, again, for no reason.

It was probably a good thinking out of the box exercise, but in practical terms, no. Just... No.



FWIW, it does bring up another point I've been waiting for. . .

Hidden City brings the inherent risk any Hub-Spoke airline would carry for PAX. The possibility of a legit rerouting. I have had plenty of occasions where the Xfer hub (even actual Airline at times) has been changed in the final 24hrs before the trip. Usually for WX or tech reasons, but there are things that can happen. I would think the risk of having to eat that and buy a last minute ticket elsewhere mitigates most of the savings involved.

But that's as much "recourse" as any airline should ever be allowed on this. The sheer stupid pettiness of going after this completely made up problem is just one of many reasons why I will always consider airlines to be Junk Stock...
"Ya Can't Win, Rocky! There's no Oxygen on Mars!"
"Yeah? That means there's no Oxygen for him Neither..."
 
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tlecam
Posts: 1446
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:18 pm

jplatts wrote:
There are some real issues with hidden-city ticketing for UA (apart from lost revenue), including the following:
(a) Reduced availability of seats on the B-C leg due to passengers having reservations for flights that they do not intend to take,
(b) Possibility of higher than normal fares on the B-C leg due to fewer seats available for sale due to hidden-city ticketing,
and
(c) Lower load factors on the B-C flights due to no-shows resulting from hidden-city ticketing.

There is also a risk that passengers will be ticketed on a nonstop flight or a flight through another hub in the event of delays or cancellations on the A-B or B-C legs of the itinerary.



All true. The challenge however, is that the airline still got paid the price that it charged for the B-C leg.

In the legal sense, the damages that the airline suffers because of a passenger not taking a flight that he or she paid for are primarily opportunity costs, and therefore difficult to both prove and quantify. Especially since it got paid the price that it charged for the B-C leg.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
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usdcaguy
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:20 pm

UpNAWAy wrote:
Amazing how many A.netter still don't understand a Market is point A to B only and that is a Unique market. Each one is a Unique and is priced according by passenger demand. If you don't notice this is an extremely price sensitive business. All produced at the store is not priced the same Avocados cost more than Apples just as Non Stop Market may cost more than a connection. They are completely different species so to speak.


Not really an apt comparison. Let's say the grocer was selling apples and oranges bundled together in red nets and not separately. You could pay the price for an apple and an orange and just eat the apple and throw the orange away in the trash. Another example would be buying a two-course prix fixe menu on special to get a main dish you cannot get a la carte. Asking the restaurant simply to remove the dessert because you don't want it isn't a crime and is just like buying a two-segment ticket and only using the first segment. If the carriers don't want you doing that, they shouldn't be offering the connection for sale in the first place.
 
Skyguy
Posts: 495
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:23 pm

I may be wrong here but I seem to recollect one of the US airlines (UA?) had some terms and conditions whereby if you bought a hidden city ticket but were a no show for the final leg then they reserved the right to charge your credit that you paid for the ticket with with the published fare to the city you got off at. I don't know how far this got and whether there was any legal challenge to it but in the days with paper tickets/coupons it was a lot easier to do then today when everything is logged and monitored by software.
"Those who talk, do not know, and those who know, do not talk."
 
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tlecam
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:24 pm

What’s interesting to me about the whole thing is that I don’t think that the airlines or the general public really wants the current demand based pricing model to change. Carriers could very well lose in court, but if they do and are forced to use a different pricing model that doesn’t enable hidden ticket pricing, airfares will go up.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
bhill
Posts: 1657
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:26 pm

Fuck 'em...if I paid money for the trip...tough shit. Adjust the pricing. They SURE as hell will not give us a break if we DO need to change. Airline ticket pricing is like the Pharmaceutical Industry...
Carpe Pices
 
WayexTDI
Posts: 1221
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:30 pm

Skyguy wrote:
I may be wrong here but I seem to recollect one of the US airlines (UA?) had some terms and conditions whereby if you bought a hidden city ticket but were a no show for the final leg then they reserved the right to charge your credit that you paid for the ticket with with the published fare to the city you got off at. I don't know how far this got and whether there was any legal challenge to it but in the days with paper tickets/coupons it was a lot easier to do then today when everything is logged and monitored by software.

And this is where it's unenforceable. There are no published fares for the big airlines, the fares are very fluid depending on the demand, how far in advance you booked, special pricing due to contracts, etc.
A lawyer will have a field day defending the passenger: the airline cannot prove the fare it would have charged the pax...
 
bhill
Posts: 1657
Joined: Thu Sep 13, 2001 8:28 am

Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:36 pm

TheLark wrote:
My suggestion for a fare policy avoiding hidden cities: You buy a ticket that entitles you to fly from A to B, leaving A no earlier that a specified start time and arriving at B no later than a specified arrival time. As long as these conditions are met, the airline may put you on any flight or flights they may choose, using any route they may choose. Maybe an hour or two before the specified start time you receive a text saying something like "Your flight from A to B today will be flight AB123 via X: departure time 07:35, gate D21."

The price may vary according to the interval between the earliest start and latest arrival time, with longer intervals being obviously cheaper. I think such a policy might have advantages for both airlines and customers.



This is called a MAC/ Space Available flight..... :D
Carpe Pices
 
SL1200MK2
Posts: 69
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 6:41 pm

While there is the chance of being re-routed through another city, and thus being stuck, hidden city tickets can, at times, be created to avoid this. One that I used to use was DCA-SFO-MOD on UA, where I just wanted the DCA-SFO portion. The only service UA had to MOD was via SFO. So, no matter what sort of reroute they could have tried, eventually I was getting to SFO. This is, in my opinion, the only sure way to get to where you are going.
 
chicawgo
Posts: 391
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:11 pm

tlecam wrote:
What’s interesting to me about the whole thing is that I don’t think that the airlines or the general public really wants the current demand based pricing model to change. Carriers could very well lose in court, but if they do and are forced to use a different pricing model that doesn’t enable hidden ticket pricing, airfares will go up.


THIS is exactly right. Everyone is just arguing whether it's right or not, legal or not but they're missing the bigger implication. That is that the way the pricing and revenue model works now is that the so-called "price gouging" is what actually subsidizes overall fares and keeps most of them low. I fly ORD-SGF frequently for work and the fares are often $900 roundtrip for a 1h20min flight on an E-145. It sucks. But that helps pad their margin so that I can fly ORD-SIN for $650 for leisure. If they're not making those huge margins on SGF then they have to make it somewhere else and fares go up. And if they can't make a profit then we lose routes and frequency.

I'm not at all saying which side is right or not. I honestly see fair points on both sides. But the bigger issue is what would happen if this revenue model went away.
 
RDUDDJI
Posts: 2103
Joined: Fri Jun 04, 2004 4:42 am

Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:15 pm

ScottB wrote:
RDUDDJI wrote:
It is material. There's a low bucket fare (that won't be used) taking up a seat that could have potentially been sold at a higher price closer to departure (either YYY-ZZZ or WWW-YYY-ZZZ).


No, it's not. In selling the WWW-YYY-ZZZ ticket, the airline already chose to accept that the seat would be occupied by that passenger for the fare he or she paid. If they want to be able to resell that seat, then they would need to buy that seat back from the passenger. It's not a lost revenue opportunity because they got paid for the seat flown, even if it's empty, just as concert promoters and artists get paid for seats that go empty if they've been sold to customers.


If the seat (or booking actually) could have made $200, but someone has "squatted" on it for anything less than $200, they've lost revenue. The fact that you and other HCT fanbois won't simply admit that is rather hilarious...

ScottB wrote:
In fact, because airlines overbook, they do have the opportunity to sell that seat twice if they choose to do so.


Whoa! Airlines overbook?!

Thanks Captain Obvious...
Sometimes we don't realize the good times when we're in them
 
WayexTDI
Posts: 1221
Joined: Fri Sep 21, 2018 4:38 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:24 pm

RDUDDJI wrote:
ScottB wrote:
RDUDDJI wrote:
It is material. There's a low bucket fare (that won't be used) taking up a seat that could have potentially been sold at a higher price closer to departure (either YYY-ZZZ or WWW-YYY-ZZZ).


No, it's not. In selling the WWW-YYY-ZZZ ticket, the airline already chose to accept that the seat would be occupied by that passenger for the fare he or she paid. If they want to be able to resell that seat, then they would need to buy that seat back from the passenger. It's not a lost revenue opportunity because they got paid for the seat flown, even if it's empty, just as concert promoters and artists get paid for seats that go empty if they've been sold to customers.


If the seat (or booking actually) could have made $200, but someone has "squatted" on it for anything less than $200, they've lost revenue. The fact that you and other HCT fanbois won't simply admit that is rather hilarious...

Then, the airline should have never accepted to sell the ticket for the price they sold it for. A contract has been sealed, the airline got paid; end of story.
 
Aliqiout
Posts: 291
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:25 pm

usdcaguy wrote:
UpNAWAy wrote:
Amazing how many A.netter still don't understand a Market is point A to B only and that is a Unique market. Each one is a Unique and is priced according by passenger demand. If you don't notice this is an extremely price sensitive business. All produced at the store is not priced the same Avocados cost more than Apples just as Non Stop Market may cost more than a connection. They are completely different species so to speak.


Not really an apt comparison. Let's say the grocer was selling apples and oranges bundled together in red nets and not separately. You could pay the price for an apple and an orange and just eat the apple and throw the orange away in the trash. Another example would be buying a two-course prix fixe menu on special to get a main dish you cannot get a la carte. Asking the restaurant simply to remove the dessert because you don't want it isn't a crime and is just like buying a two-segment ticket and only using the first segment. If the carriers don't want you doing that, they shouldn't be offering the connection for sale in the first place.

Your comparison doesn't make any sence. The customer is always free to "dispose" of something after paying for it. There are no consequences, other than losing what you paid, for not showing up for a ticketed trip at all. The issue is that on a hidden city ticket you never paid for transportation to the hidden city. Just because the airline uses the same flight that higher cost product uses, doesn't change that.

Another good grocery store analogy is paying for a gallon of vanilla ice cream. You can't chose to take ingredients separately. The milk, cream sugar, and vanilla may cost more, or less than then the ice cream. They are different products and respond to different market pressures than the combined ingredients.
 
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PatrickZ80
Posts: 3915
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:35 pm

Skyguy wrote:
I may be wrong here but I seem to recollect one of the US airlines (UA?) had some terms and conditions whereby if you bought a hidden city ticket but were a no show for the final leg then they reserved the right to charge your credit that you paid for the ticket with with the published fare to the city you got off at. I don't know how far this got and whether there was any legal challenge to it but in the days with paper tickets/coupons it was a lot easier to do then today when everything is logged and monitored by software.


But even that can be cheated on, for example by buying the ticket with a prepaid credit card that has just enough credit on it to pay for the ticket itself. However if after the passenger got off at the hidden destination the airline tries to charge that credit card for the missed revenue, the payment is denied. Not enough money on the card (it's empty). Plenty of places on the internet where you can buy a virtual prepaid credit card. Use once and then forget about it, no way the airline will ever get that money.
 
RDUDDJI
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:41 pm

PatrickZ80 wrote:

Sorry, but I still disagree with you. Indeed, airlines don't use a "cost +" model and that's exactly their problem. They should use that "cost +" model, passengers do so airlines should follow suit.


No offense, but you really don't understand market pricing. Cost + pricing is silly in most industries. Let's say a widget cost me $12. Perhaps in a Cost + model I'd sell it for $30 and make a little. However, that doesn't take into account what it's worth to the customer and/or what competition is doing. It may be worth $70 to you. If I sold it to you for $30, I'd be a fool. On the other hand my competitor may be selling a similar widget for $20. In that case perhaps my price is too high and I need to lower it.

The simplest equation for pricing is: Competition +/- Added Value = Market Price. In the above example, perhaps my widget has 2x perceived added value over the competition's. In that case, my price would be about $40.

PatrickZ80 wrote:
Flight XXX-YYY is $ 500 one-way and flight XXX-YYY-ZZZ is $ 300. That's the problem. A passenger flying XXX-YYY costs the airline a certain amount of money, regardless if this passenger is getting off at YYY or flies on to ZZZ. The costs for that XXX-YYY leg don't change, but the price charged for it does. This doesn't make sense to customers, it just can't be explained. I've heard a lot of bullshit reasons for it, but so far nothing that holds any ground.


Again, I'm not defending the practice. I actually agree with you that the model is silly. However, you're talking about costs again, which are irrelevant here.

PatrickZ80 wrote:
You say they lost $ 200 because the passenger got off at YYY. Again, I disagree. Yes, they lost income but that's their own fault. They priced their flights wrong. If $ 300 covers the costs of $ XXX-YYY-ZZZ then it certainly covers the costs of XXX-YYY. If it doesn't, they lose money on it and therefor the price of XXX-YYY-ZZZ should go up. Of course I hear you say, that's the "cost +" model and airlines don't use that. But as I said, passengers do and with the "cost +" model in hand passengers demand an explanation based on that "cost +" model from the airlines. So far the airlines are failing miserably at that.


The airline's cost (or any other vendor's cost) isn't anyone's business besides the vendor. I don't get why you keep bringing up costs?! Customer's don't buy things based on a vendor's costs... We're talking about lost revenue here, costs are a completely different discussion and not related.


PatrickZ80 wrote:
As I said before, airlines don't lose money. They might lose expected revenue, that's something else (and entirely on the airline to blame).


I hope you realize that both of those statements cannot be true. Losing revenue is losing money. They wouldn't have clauses in their CoC if it didn't cost them money.

PatrickZ80 wrote:
But they don't make extra costs if a passenger decides to skip a leg, so therefor they don't lose actual money.


Again, cost is irrelevant to this discussion. I don't disagree the the cost to carry one pax is insignificant, but that still doesn't make up for lost revenue.
Sometimes we don't realize the good times when we're in them
 
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PatrickZ80
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:45 pm

Aliqiout wrote:
The issue is that on a hidden city ticket you never paid for transportation to the hidden city. Just because the airline uses the same flight that higher cost product uses, doesn't change that.


Wrong! You did pay for it, only the airline charged too little for it. That's the fault of the airline, not the passenger. They shouldn't offer it at that price, or they should offer it at that price for everyone.

And as said before, to the airline a direct flight is a lower cost product, it costs them less. So your term higher cost product is faulty. Many passengers expect to pay less for a direct flight because it is a lower cost product for the airline. Some airlines (Norwegian for example) live up to that expectation, others (United for example) refuse to accept this new reality and are stuck in their old-fashioned way of thinking.
 
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DarkSnowyNight
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Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:52 pm

Aliqiout wrote:
You can't compare a good with a service like that. You get the same potato whether it was part of a two pound package or a one pound package. When airline tickets are sold, the product is transportation between two destinations. There may be more value in faster transportation between the two places (non stop), more comfortable transportation, or more reliable transportation, but otherwise the cost is based on the competition, and demand for the travel between the two points. If the competition and demand does not allow for high enough profits after operating costs, the flight may be dropped.


Sure you can. Every business has 'unique' issues that make it impossible to make a direct, specific comparison. At a certain point. we need to draw the line. If every industry attacked customers in the name of profit entitlement, as is the broader case here, we'd have some pretty serious problems, pretty fast.

tlecam wrote:


All true. The challenge however, is that the airline still got paid the price that it charged for the B-C leg.

In the legal sense, the damages that the airline suffers because of a passenger not taking a flight that he or she paid for are primarily opportunity costs, and therefore difficult to both prove and quantify. Especially since it got paid the price that it charged for the B-C leg.


Agreed. And to add, where does this assumption that the airline is entitled to profit protection from their own stupidity come from anyway? Just because they're not happy with what they originally sold a product for (for which payment is already guaranteed), doesn't mean they're entitled to 'fix' that in this manner.

Their mistake. They need to eat it the same way a PAX would if they had to CanX at the last minute and forfeit a refund under the provided terms.

usdcaguy wrote:

Not really an apt comparison. Let's say the grocer was selling apples and oranges bundled together in red nets and not separately. You could pay the price for an apple and an orange and just eat the apple and throw the orange away in the trash. Another example would be buying a two-course prix fixe menu on special to get a main dish you cannot get a la carte. Asking the restaurant simply to remove the dessert because you don't want it isn't a crime and is just like buying a two-segment ticket and only using the first segment. If the carriers don't want you doing that, they shouldn't be offering the connection for sale in the first place.


Indeed. I fucking hate onions. If restaurants ran their operation this way, I'd have been been long since drug out into the street and shot for how many times I've had them held on an order.
"Ya Can't Win, Rocky! There's no Oxygen on Mars!"
"Yeah? That means there's no Oxygen for him Neither..."
 
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PatrickZ80
Posts: 3915
Joined: Tue Jul 13, 2010 5:33 am

Re: United going after hidden-city travellers

Fri Aug 02, 2019 7:57 pm

RDUDDJI wrote:
Again, I'm not defending the practice. I actually agree with you that the model is silly. However, you're talking about costs again, which are irrelevant here.


Where do you get the idea from that costs are irrelevant. Again I'm telling you, costs aren't irrelevant!

RDUDDJI wrote:
Again, cost is irrelevant to this discussion. I don't disagree the the cost to carry one pax is insignificant, but that still doesn't make up for lost revenue.


And again I'm telling you, cost is very relevant to this discussion. Customers are willing to pay the price of a ticket based on what it would cost the airline to get them to their destination. Of course they allow for a certain profit margin for the airline, however selling the same seat on the same flight for two entirely different prices is something customers just cannot understand. After all it costs the airline the same so it should cost the customer the same. And if airlines fail to see that, customers are correcting the airline by doing a hidden destination.
 
Aliqiout
Posts: 291
Joined: Wed Oct 05, 2016 6:10 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:13 pm

PatrickZ80 wrote:
Aliqiout wrote:
The issue is that on a hidden city ticket you never paid for transportation to the hidden city. Just because the airline uses the same flight that higher cost product uses, doesn't change that.


Wrong! You did pay for it, only the airline charged too little for it. That's the fault of the airline, not the passenger. They shouldn't offer it at that price, or they should offer it at that price for everyone.

And as said before, to the airline a direct flight is a lower cost product, it costs them less. So your term higher cost product is faulty. Many passengers expect to pay less for a direct flight because it is a lower cost product for the airline. Some airlines (Norwegian for example) live up to that expectation, others (United for example) refuse to accept this new reality and are stuck in their old-fashioned way of thinking.

The price for goods and services in a capitlistic system is not based on cost though. Its based on demand and supply. Costs only matter in that if the demand and supply don't allow a price higher than the cost the product will go away. Even this is too simplistic though, because airlines will run flights that don't bring in more than the costs in order to provide a better network

Ever notice how price plus stores are the exception rather than then rule?
 
aircatalonia
Posts: 619
Joined: Wed Nov 28, 2007 12:50 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:17 pm

Why not charge a deposit? When you board your last leg they refund your money.
 
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ChaseCLT
Posts: 16
Joined: Sun Apr 29, 2018 2:54 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:20 pm

Maybe they should advocate for more competition. It shouldn’t cost $500+ to fly between IAD/DCA to CLT, for example. Luckily Spirit at least offers BWI to CLT cheap, otherwise BWI-CLT too is expensive for it to be worth - to me - to go down for the weekend or whatever. I can literally find legit fares between and IAD/BWI/PHL/NYC Europe cheaper than Charlotte depending on the month....

I find those hidden fares on American to get to Charlotte and United to get to IAD. (Now I fly spirit. I don’t care they suck for my casual fly down for a day to see friends or family). Having lived in Charlotte before DC, it sucked having US Airways pummel the competition off routes. You’d get competition on XYZ city, fares would go down to $170-$230 on average round trip for short flights with US dipping way below on flights around the time of the new entrant. Airline leaves or cancels route than it’s back up to $500.
 
umichman
Posts: 47
Joined: Sun Apr 07, 2019 2:42 am

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:25 pm

ikramerica wrote:
are they including back-to-back tickets in this crackdown?

there can be times where booking two tickets that "connect" is cheaper than one connecting flight. Airlines used to link them when you got to the airport, but would warn you that misconnects are your problem and that you would be standby on later flights. You can sometimes save a lot vs. doing a stopover ticket, or doing 3 one-ways. At least that used to be true.


That's not a CoC violation so there's nothing to go after. The only time back-to-back ticketing is a CoC violation is when you nest separate outbound and return tickets to get cheaper Saturday-night stay fares (useful for flyers who make regular weekly trips to somewhere which don't include Saturday night stays). So you book A-B roundtrip over a two week period and book a reverse B-A roundtrip within it. These both include Saturday night stays to get cheaper fares, but you aren't actually spending a Saturday night at your destination B.
 
Brickell305
Posts: 675
Joined: Sat Jun 24, 2017 2:07 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:33 pm

tlecam wrote:
jplatts wrote:
There are some real issues with hidden-city ticketing for UA (apart from lost revenue), including the following:
(a) Reduced availability of seats on the B-C leg due to passengers having reservations for flights that they do not intend to take,
(b) Possibility of higher than normal fares on the B-C leg due to fewer seats available for sale due to hidden-city ticketing,
and
(c) Lower load factors on the B-C flights due to no-shows resulting from hidden-city ticketing.

There is also a risk that passengers will be ticketed on a nonstop flight or a flight through another hub in the event of delays or cancellations on the A-B or B-C legs of the itinerary.



All true. The challenge however, is that the airline still got paid the price that it charged for the B-C leg.

In the legal sense, the damages that the airline suffers because of a passenger not taking a flight that he or she paid for are primarily opportunity costs, and therefore difficult to both prove and quantify. Especially since it got paid the price that it charged for the B-C leg.

And also as has been said before, there’s no guarantee that passenger would have booked the more expensive nonstop had they no other choice. Between paying $500 for SFO-IAH, paying $230 for an SFO-IAH-MIA routing but getting off in IAH, booking on another airline, or simply not traveling at all, a passenger might opt for options 3 or 4 instead of 1 if 2 were no longer possible.
 
umichman
Posts: 47
Joined: Sun Apr 07, 2019 2:42 am

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:34 pm

PatrickZ80 wrote:
RDUDDJI wrote:
Again, I'm not defending the practice. I actually agree with you that the model is silly. However, you're talking about costs again, which are irrelevant here.


Where do you get the idea from that costs are irrelevant. Again I'm telling you, costs aren't irrelevant!

RDUDDJI wrote:
Again, cost is irrelevant to this discussion. I don't disagree the the cost to carry one pax is insignificant, but that still doesn't make up for lost revenue.


And again I'm telling you, cost is very relevant to this discussion. Customers are willing to pay the price of a ticket based on what it would cost the airline to get them to their destination. Of course they allow for a certain profit margin for the airline, however selling the same seat on the same flight for two entirely different prices is something customers just cannot understand. After all it costs the airline the same so it should cost the customer the same. And if airlines fail to see that, customers are correcting the airline by doing a hidden destination.



And what about charging more for flights closer in? If tickets were charged purely based on what it cost to fly, the close-in fares would go down, but the cheap 3-week advance fares would also go away as the reality is those fares would not cover the cost of the flight if they sold out the entire plane at those prices.
 
unmlobo
Posts: 154
Joined: Tue Apr 06, 2004 2:33 pm

Re: United going after hidden-city travellers

Fri Aug 02, 2019 8:35 pm

I think if United is having too much of a problem with Hidden City ticket their revenue management system is doing something wrong. I am not saying whether or not the airlines can or cannot enforce the contract of carriage, but this is basic revenue management stuff.

When airlines assign revenue to a particular flight they usually do so by pro-rating the revenue across the legs based on distance (or other methodology).

Let's say that the distance for XXX-YYY-ZZZ is 2,000 miles total with the first leg being 1,500 miles and the 2nd leg being 500 miles. The customer has the option for buying XXX-YYY for $500 or XXX-YYY-ZZZ for $300. Let's say the customer buys the $300 XXX-YYY-ZZZ ticket.

In a straight distance pro-ration the airline would recognize $225 in revenue for the XXX-YYY portion and $75 for the YYY-ZZZ portion. By selling this ticket the revenue management implies (tells) us a few things:
1) The airline could not have sold that seat on XXX-YYY for more than $225 (if their lowest fare currently available in the market is $500 they are saying that they would not be able to fill the plane with local O&D pax and that the seat would've gone out empty so any revenue they get for the seat is gravy)
2) The local fare they would be able to get for that seat for YYY-ZZZ is no more than $75, otherwise the revenue management system wouldn't have sold that ticket and would've held out for a higher yielding local passenger (more than likely this seat would've gone out empty too)
3) The airline cannot possibly be losing $200 if the passenger utilizes a hidden-city and gets off at YYY because they weren't going to get $500 for that seat anyway (as evidenced by #1 that they were willing to sell the seat for $225)
Went to school in ABQ, former airline employee. Now living in Dallas
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