CNBC Host Andrew Ross Sorkin Admits On TV To Skiplagging To Save $1,500 — Here Is Why Airlines Call It Fraud And I Do Not

Andrew Ross Sorkin asked The Points Guy founder Brian Kelly on MSNBC’s Squawk Box about throwaway ticketing (commonly referred to as ‘skiplagging’) as a money-saving tactic – saying he had just done it successfully himself.

Final question, and if you’re an airline CEO close your ears, close your ears right now. What about what they call ghost legs? … I just did this, by the way, I shouldn’t admit it. I was trying to find a cheaper flight and I got put on the wildest, so I went on some website. I won’t even say where I was going. I was supposed to go to one place. It had me go to four more places after that, even though you were never really going to the four other places. You see what’s happening here?

Sorkin says his throwaway ticket was $1,500 less. “Am I supposed to cancel the flight after?” He ends noting that “it wasn’t me, it was actually a travel agent that did this on my behalf, oddly enough.”

Revenue management guru and former American Airlines Vice President of Sales and Distribution Strategy Cory Garner had criticism of this on LinkedIn.

It’s a devious way to game hashtag#airline pricing. Most airlines prohibit this activity in their conditions of carriage ***and*** their travel agency agreements.

You can be absolutely certain that some RM analyst somewhere is searching Andrew’s PNR history, finding the one with no-show legs, identifying the offending travel agency, and getting the debit memo ready, if not worse.

As for Andrew, I’m sure he’ll just get a polite note this time. He might even be asked to revisit the story and provide some sage advice against doing the same for any travelers that may be considering it.

Garner goes on to argue that this is stealing from the airlines.

Imagine you walk into a candy shop and pay the attendant $5 in advance for 2 pounds of candy. When you go to the candy bin, you take 4 pounds and walk out of the store.

A few nasty things happened there:

1. You knowingly lied about what you were going to take.

2. You paid $5 less than you should have for the value you received.

3. You deprived the candy shop owner from selling the other 2 lbs of inventory.

Folks, skiplagging is a fraud perpetrated on an airline by a customer. You might not like how that sounds, but you can’t walk out with $10 worth of value after paying only $5 simply because the shop owner trusted you to do the right thing.

The late Supreme Court Justice Antonin Scalia engaged in throwaway ticketing on US Airways. The New York Times ‘ethicist’ endorsed throwaway ticketing. (If you’re skeptical of the Times, then I’d note that Donald Trump’s PAC did it.)

There is a core disconnect between how airlines think about the practice and how consumers do.

• To an airline, flying tickets to fly AAA-BBB-CCC connecting in BBB is a different product (travel from AAA-CCC) than flying AAA-BBB-CCC and throwing away BBB-CCC (it is travel from AAA-BBB).

• To a consumer they are buying travel on both flights AAA-BBB and BBB-CCC and they are choosing what to do with their purchase.

• Contracts of Carriage aside, which nobody reads, it is just a different way of looking at the same thing and neither side understands the other.

People think about the moral choice here differently than airlines do. A document that they never read let alone negotiated doesn’t ‘feel’ like something a person has to abide by. ‘But it’s against the rules’ is not persuasive here. No one feels like they are doing something morally wrong.

I’m not saying ‘you should do it’ or ‘airlines should not be able to price products as they wish’. It is a revenue maximization strategy and not an issue of common sense morality. In my view,

• Airlines can price as they wish.
  
• Consumers can do what they wish with what they buy.
  
• And airlines can choose not to work with a customer if they want as well (they have the right to ban the passenger, close their mileage account).

Agencies doing this are a totally different issue. They knowingly agree to the airline’s ticketing policies, and can face real commercial consequences for violating them.

I tell most people they should not do this.

• It doesn’t work so well with checked bags. Your bags go to your ticketed destination in most cases, not to where you’re actually ending the journey.

• It doesn’t work well if you aren’t among the first passengers to board, and the airline forces you to gate check your bag.

• If your flight is cancelled, the airline may want to re-route you via a different city!

• You need to only throw away the last flights in your itinerary. If you book a roundtrip and try to skip one of the segments on your outbound, the airline will cancel the return (so to ‘skiplag’ on the outbound, book two one-ways).

But throwaway ticketing has been a common practice for many many decades. A non-stop flight to an airline’s hub may be expensive, but booking that flight with a connection to a competitive, less expensive market can save you a lot of money sometimes.

My point though is that this is less a moral issue than a commercial one. I don’t think consumers are behaving immorally by doing this, even though it’s not something I would recommend to most people or even to a handful of people to do often.