American Airlines suing website that offers tickets via price loopholes

American Airlines is suing a travel website that offers cheaper airfares by using a loophole in the airline pricing system.

American sued Skiplagged Inc. in federal court on Friday. The lawsuit accuses the company of using a "classic bait and switch" practice to offer American customers cheaper tickets. The airline alleges that Skiplagged has never been authorized to sell its tickets and has threatened to cancel tickets purchased through the website.

Skiplagged uses a practice called hidden-city flying, also known as skiplagging, to offer customers cheaper tickets. This practice occurs when a passenger books a flight with a layover in their desired city, and then skips the last leg of the flight. Since flights with layovers are sometimes cheaper than direct flights, some passengers may use hidden-city flying as a way to save money, and Skiplagged says it identifies the best deals to do so.

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While this practice is not illegal, airlines have been cracking down on passengers who participate, claiming it violates their policies. Earlier this month, American banned a 17-year-old from flying with them for three years because he had purchased a hidden-city ticket. Skiplagged even admits on its website that hidden-city flying "might upset the airline, so don't do this often," adding that passengers shouldn't "associate a frequent flyer account — if you do, the airline might invalidate any miles you've accrued with them." The website also urges passengers not to skiplag on the same itinerary multiple times.

American cited these tips in its lawsuit, writing that hidden-city flying "is expressly prohibited. Because Skiplagged knows this, it even expressly advises customers on what steps to take to avoid getting caught." The airline also told The Dallas Morning News that the practice "can lead to operational issues with checked bags and prevent other customers from booking a seat."