Essay on the Existence of Hidden-City Tickets

Commercial flight faces various challenges when it comes to pricing their tickets. A report by GAO (2001) shows that it is possible to have passengers on the same flight and even on adjoining seats incur varying amounts for their flight. The impact of such a situation is that it yields passenger dissatisfaction with the ticketing process and give rise to the use of diverse mechanisms by the passengers to reduce their cost. One of the approaches that passengers use in this effort is “hidden city” ticketing. This is where a passenger books a flight to a specific city but gets out of the plane when it stops in an intermediate city and does not board the flight for the final leg. The practice is informed by the costs incurred; the passenger’s desired destination is the intermediate city. However, they purchase a ticket for a different city since it is cheaper than the intermediate city (GAO, 2001).

The hidden cities are part of the itineraries of a flight with multiple legs. It allows the passenger to exit their desired city before the plane gets to its final destination. An illustration of this concept can be seen in a situation where a passenger wants to go to San Francisco from New York. However, the passenger booked a flight to Seattle, which has a stopover at San Francisco. The passenger takes the flight, and when it gets to San Francisco, they descend and do not take the rest of the flight saving on their travel expenditure Skiplagged (, 2021).

Posadzki (2017) shows the high disparity in prices and the savings passengers can make through hidden-city ticketing with the example of Kevin. As a frequent flyer for business purposes. Kevin has to travel from Toronto to San Francisco, which costs him approximately$450. However, when he books a trip to Santa Ana, it makes a stopover at San Francisco, and he disembarks, saving $120. The figures below illustrate some of the most considerable hidden-city fare differences unearthed.

United Airlines fares

The findings on the fares of United Airlines show that they have also been impacted by the concept of hidden city ticketing. Through sites such as skiplagged, passengers can find cheaper tickets for their desired destination, which fall within the fight stopovers of the booked flight, and it is much cheaper. Table 1 below captures a summary of flights within November 2021 that passengers can board and get fewer charges for their tickets.

Table 1: Uniter Airlines Fares in November 2021

Source: Skiplagged (2021).

Economic Motivations

An assessment of the current issue of hidden-city ticketing shows that there are economic reasons that have played an instrumental role in propagating this issue. One of the main economic reasons that have promoted the existence of this concept is the need to save on transport expenses. Posadzki (2017) asserts that while the concept of hidden city ticketing has been here for a while, the present-day existence of websites and entities that offer passengers information on how to cut their flying costs has increased the prominence of these flights.

The savings that customers make from these flights are highly appealing, and they propel passengers to seek out these tickets. Through the example of Kevin, who needed to make a flight to Francisco for business regularly, Posadzki (2017) illustrates the high disparities that exist in the prices. By engaging in hidden city ticketing, Kevin could save up to $120, making a choice very economically motivated.

While there could be challenges associated with hidden city ticketing, such as rerouting, passengers are motivated to take the risk because of their benefits. Skiplagged (2021) asserts that they can show travelers hidden city flights using their unique algorithm, which enables the passenger to save on their travel expenses. They estimate that these savings could be up to 80% of their users using regular flights. As such, this is a substantial economic benefit.

The current results are obtained from a period of the pandemic when people face tough economic times and are keen to ensure that they save on every penny they can afford. As such, the current situation could skew the results and show an increased motivation to save. Further, the airline is seeking to maximize revenues and compete with other players in the field for the few willing travelers. The flight charges to specific destinations could be significantly lowered to enhance the completion and thus yield higher gaps with the skiplagged rates for hidden routes within the stopovers of the plane.

Estimation of Revenue Loss.

A look at the statistics on the flight trips shows a significant disparity between the revenue that the company would generate as a result of the skiplagged rate and the normal flight rate. If United Airlines were to have one passenger use the hidden-city ticketing for each of these flights listed in November, the cumulative lo for the airline would be a whopping $180. Table 2 captures a summary of the summation

Table 2: United Airlines Revenue Loss in November 2021

Source: Skiplagged (2021).

Based on this assessment, it is clear that hidden-city ticketing is damaging for United Airlines since it leads to significant revenue loss. On the other hand, while the customers might enjoy some economic benefits as a result of the lowered prices, it is also potentially damaging. The potential risks ti brought included the risk of rerouting of the plane, which takes the customers for the desired stopover, violates contracts with airlines, does not allow the passenger to carry baggage, and could prompt higher ticket fees by the airliner.

References

GAO 2001. AVIATION COMPETITION Restricting Airline Ticketing Rules Unlikely to Help Consumers. Retrieved from https://www.gao.gov/assets/gao-01-831.pdf

Posadzki, A. 2017. Hidden city ticketing: How air travelers are taking chances to save big Retrieved from https://www.ctvnews.ca/business/hidden-city-ticketing-how-air-travellers-are-taking-chances-to-save-big-1.3511629

Skiplagged, 2021. Ridiculous travel deals you can’t find anywhere else. Retrieve from https://skiplagged.com/