American Airlines Goes After ‘Hidden City Ticketing’: New Revenue-Raising Initiative?

“Hidden city ticketing” involves booking a flight to a city beyond the one you want to travel to, in order to get a lower fare. You might book Washington DC – Charlotte – Jacksonville when you just want to go to Charlotte, because the fare to Jacksonville is lower. You get off the plane in Charlotte and ‘throw away’ the next flight.

  • You can only do this with the last segment of your ticket because the airline will cancel the rest of your ticket when you don’t show up for a flight

  • You can’t do this in most cases with checked bags, or else your bags will go to the final city on your itinerary – and you’re not going to go there to pick them up.

This is not illegal, but it’s against airline rules. There are several risks involved, including if a plane is full there might not be enough overhead bin space for your carry on and are asked to gate check your bag to your final destination (don’t be last to board!) or if your flight is delayed or cancelled the airline may want to book you through a different hub (I’ve never had an issue getting my preferred re-routing).

Doing this once or twice has never been a big deal. Doing this often has led to problems for travel agencies (debit memo) and for flyers (risk of being banned by the airline, or having a frequent flyer account shut down).

One way to minimize risk is to give a partner airline’s frequent flyer account when traveling on a hidden city ticket, or none at all, though even that isn’t a foolproof way of protecting your mileage account because at a minimum you’re giving your full name, gender, and date of birth to book a ticket. A determine airline can match that up.

One flyer shared his experience being contacted by American Airlines over 52 instances of hidden city ticketing. His frequent flyer account was locked and American demanded payment for the revenue they’d lost.

As an analyst with American Airlines, one of my responsibilities is investigating violations of the General AAdvantage® Program Conditions. An audit of your AAdvantage account, determined that you have engaged in the practice known as ‘Hidden City ticketing’; the purchase of a fare to a point beyond your actual destination. Hidden city ticketing is explicitly defined in AA’s Conditions of Carriage as a violation of ticket validity. The Terms and Conditions of the AAdvantage program further state that compliance with the Conditions of Carriage is compulsory for participation in the AAdvantage program. As such, AAdvantage account XXXXXX is restricted, pending the outcome of our investigation. You may review the terms and conditions of the AAdvantage ® program (several parts of the terms and conditions are noted below) by clicking the link below or by copying and pasting it into your browser.

The audit of your account XXXXXwas completed on August xx, 2020. The following reservations were not issued in compliance with the AAdvantage Terms & Conditions, Conditions of Carriage or AA.com Site Usage policy:

52 HIDDEN CITY TICKETS (Included each one of the flights they believe is a hidden city ticket)

Not unlike other commodities, airline seats are market priced. A seat on a non-stop flight is a premium product and commands a higher price. Seats in connecting markets must be priced competitively and hence can be substantially cheaper. The ill-effects of point beyond ticketing are two-fold; the customer receives the flight for a price for which they aren’t entitled and a seat is spoiled on the separate connecting flight. An airline ticket constitutes a contract and the terms of that contract are stated explicitly in the Conditions of Carriage. Please see excerpts below.

Mr.XXXXX, these actions have resulted in clear and considerable losses to American Airlines. In addition to our loss for the travel provided, tickets booked through prohibited practices are considered fraudulent, and therefore not eligible to accrue mileage. In this case, our loss is further compounded through the Elite mileage accruals, benefits, and services used that were not otherwise available. Generally, violations of this nature subject the AAdvantage account to termination. However, we are willing to provide you with an opportunity to restore an equitable relationship through restitution for the loss on your identified travel.

You may respond to this message by 3pm, CST, Friday, August 31, 2020 stating you would like to bring your account back to good standing. At that time, the segments will be re-priced based on your intended travel and we will send you the information so that you may make the appropriate reimbursement for the travel provided. Failure to return the account to good standing or to reply, will result in the termination of your AAdvantage® membership and all its benefits, including all remaining AAdvantage® miles in your account and any award tickets issued from it.

The customer is an American Airlines million miler with ten years of top tier elite status and 600,000 miles in their account. So the loss of having their account shut down is huge.

Here’s the striking thing: American asked only $2500 to restore the account, with apparently no forfeiture of miles. That’s just $48 per flight they’re accused of taking with a hidden city routing. The customer certainly would have saved more than this on average or they wouldn’t have been doing it.

There are two points here.

  1. They’re not moving to ban the customer for breaking rules.
  2. They’re offering a cash settlement amount and the amount is downright reasonable under the circumstances.

This seems clearly designed to collect $2500, more than to punish to scare others out of the practice. It’s unclear whether there’s a ramp up in enforcement against hidden city tickets, and whether that’s related to the pandemic, but the low settlement offer does seem to stand out since it suggests a greater interest in revenue capture than in most of the enforcement efforts I’m familiar with.

Right now airlines will take any money they can, and employees may be looking for metrics and wins to justify their jobs, so it doesn’t surprise me – whether corporate policy or individual initiative – to see the airline going after violations that can extract incremental revenue, and to do it in a way that maximizes likelihood of payment.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. @ Gary – It is pathetic that this person did this 52 times to save $48 per ticket. A smart person would have done this 4 times to save $300 each time, rather than 52 times at $48 a pop. This person deserves to get in trouble for being such a cheapskate.

  2. I actually think $2500 is a brilliant figure. It is reasonable enough that it makes 100% sense to pay it. It also probably sends the message AA wants and the flyer probably won’t do it again.

    At $10,000 the flyer probably wouldn’t pay that. AA would also probably lose him as a customer.

  3. Call their bluff. You’re a million miler with 10 years of exec plat status, they don’t want to lose you. They can’t afford to lose you.

  4. I think this actually increases the incentive to try and do this. Now the worst AA will do is try and make themselves whole.

  5. I have the opposite experience on Southwest — occasionally I’ve found it is cheaper to break a 1-stop flight into two separate non-stop segments priced separately. And in those cases it will count as two flights towards A-List rather than one.

  6. @Joe

    I respectfully don’t agree with your point above. After 20 years as an EP/CK on AA, now former EP, you need to understand that AA doesn’t give a sh** about me (or you). There’s a pricing spreadsheet with a revenue curve / pricing power ratio….the top of the curve in the pricing graph will beat loyalty every single time. I left the program / jumped off the hamster wheel over 5 years ago.

    Now when I travel, I do hidden city ticketing regularly and never enter my FF information. Miles have devalued to the point where for a single flight, I don’t care, especially when I’m saving hundreds per ticket. AA has their pricing spreadsheets to fleece me, and I know where the latest loopholes are.

    There’s a slack channel at work where we share this info, and also share who has saved the most. It’s like sport. At the same time, most of my company flies Southwest because it’s uncomplicated, so we’re really only talking a few flights per year on AA or UA. Sure, SWA is sometimes more expensive, but SWA understands loyalty and they’ve never burned me the number of times that AA has.

    It was fun to watch the skiplagged thing bring attention to these things. I expect more people are doing hidden city these days because of the attention that story brought to the issue.

    Will be interesting to see it all unfold.

  7. Given that I feel AA broke their own terms and conditions and ticket contracts by stranding me, delaying me, cancelling me over and over. The last two years have the the worst with every excuse in the world if you could even get them to communicate one. The customers need to start going after AA to make them whole. I would happily skip lag any time I see an opportunity. If AA doesn’t like it, they can finalize my draw down on flying them.

  8. This can work both ways for American or an applicable airline. Before becoming a flight attendant I was in reservations. I became a supervisor and would often see some outrageous fares being offered to compete with competition or low cost carriers. Des Moines (DSM) – San Francisco (SFO) $139.00 RT with a connection in Denver (DEN). The one way fare from DSM -DEN $209.00. That is an invitation for Passenger A to take advantage of using a hidden city fare. The flight from DEN -SFO which passenger A is not going to use will have one empty seat that belonged to passenger A. DEN-SFO in most cases is heavily booked. It’s possible the airline will be able to sell that seat to a standby passenger for full fare which would probably be in excess of $300.00. In addition, during the time I was in reservations there was no mechanism to cancel Passenger A’s reservation returning to DSM. No one at headquarters had time to manually go through flight manifestS looking for Passenger A. Passenger A could show up for the return flight on the DEN-DSM segment and the reservation would still be intact. I should emphasize that since I was in reservations the airlines most likely have enhanced their reservations programs to catch that Passenger A did not use the connecting flight DEN-SFO. As a lead flight attendant I know a passenger service agent (PSA) would come onboard before closing the door with a manifest and would double check to make sure there were no empty seats. They did not have time to be paging or looking for Passenger A. I often thought the philosophy was to fill up the aircraft, leave no one at the gate, and get the aircraft door shut. On time departures were an incentive for payroll bonuses. This philosophy makes perfect sense and over the years I worked with some incredible PSA’s who instinctively knew how to get the job done and have a smile on their face when the door closed.
    The hidden city fares often were available to final destinations that were resort cities such as Orlando and Las Vegas. Trying to compete with low cost carriers could force an airline to offer a MSP-MCO round-trip fare for $169.00 with the connection in Chicago (ORD). The one way MSP-ORD fare could be $209.00. That would be an invitation to try the hidden city scheme.

  9. @gary – you say there is a “risk of being banned by the airline.” Are you aware of anyone being banned? I’ve read of people having consequences with their FF account, but never read of someone being banned. (I think there could be some legal problem with being banned, “common carrier” law and all that.)

  10. American’s claim to have made “clear and considerable losses” as a result of this person’s actions is interesting and I’m not sure that claim would stand up in court. Their income may not have been as great as it could have been but, under acconting terminology, the airline would find it hard to prove it incurred “losses”. I’m not a lawer so I’m more than happy to be corrected and I’d be interested to get your thoughts Gary.

  11. AA is stupid to go after these people now. They need any revenue they can get and hidden city practices are costing them nothing now that planes aren’t full. Taking that guy’s status away will only result in him flying a different airline going forward and result in a long term loss of revenue for AA.

  12. As IAH based flyer I’m almost forced into this practice with the absurd fares they charge to get in and out of this city. Who cares about miles when you’re saving $100+ each way. I remember the days of chasing status now I could care less as it doesn’t provide the same benefits it once use to. I remember almost always getting upgraded on Northwest as a silver. Silver today means nothing today.

  13. One of the maxims in business is “it costs more to acquire a customer than retain them”.

    AA has this guy as a customer.

    AA is choosing the right-now incremental income and doing so at the risk of losing/alienating a long-time elite flyer.

    I think this is a signal that AA is worse off than we thought. They are selling future revenue from a loyalty-locker flyer at a steep discount in return for a few dollars now.

  14. I am surprised there are any million-milers left at American. All of them comment here, they will never fly American again, every time a negative blog post is published,

  15. Amapas, I get your sarcasm and I don’t disagree with your point. But this million miler (lifetime gold is just a lifetime of virtually no benefit), platinum pro, a million miles in the bank, and currently AA is holding $3500 of my money, will happily give all of that up if AA could just go out of business. As far as every flying them again, I plan to liquidate my miles in the fastest possible way (if only I could sell them, fortunately I can use them for asian airlines) and place AA at the bottom of the list for all future flights. If I ever do fly aa again, my expectations will be zero and I will have backup plans galore. I have sat by many a passenger that said they would never fly AA again after a rain delay so I understand what you mean, but I am done with them. The Concorde plane was decimated by losing 65% of their frequent travelers in the 911 attack proving that when you lose your premium base, you will die.

  16. @mark johnson,
    Did the Concorde lose a higher percentage of frequent flyers than other aircraft? If so, why?

  17. Everybody…Just “CHILL”…Who created hidden city tickets? Airlines. Why? To help them fill empty & overvalued seats for times just like these (i.e. COVID-19). For 30 years, airlines have used hidden city tickets to fill their empty seats while crying publicly the tactic costs them money. Need a history lesson? Airlines navigated their way through the Gulf war, Asian currency crisis of ’97, 9-11, SARS outbreak of ’03, Iraqi conflict of ’03, financial meltdown of ’08 and now COVID-19 through hidden city tickets. Afterall, $$$$ received through a hidden city ticket sale is more legitimate and genuine than free money from the U.S. taxpayer via another bailout.

    Everyone, just relax, feel free to use hidden city tickets , listen to our new hidden city ticket song AND DANCE!

    https://youtu.be/V0g5uIo8f3Q
    https://youtu.be/2nDecQo0C5U

    [youtube https://www.youtube.com/watch?v=V0g5uIo8f3Q&w=731&h=411%5D

    [youtube https://www.youtube.com/watch?v=2nDecQo0C5U&w=731&h=411%5D

    How Do I know? I am, the Father of Hidden City tickets (GOOGLE IT!)

  18. Has anyone had success fighting back on the hidden city AA threat to cancel their account? Just had it happen to me today…threat and offer for $2500 restitution. I’m a 20 year, 100 segment plus traveler and may have stepped off flights 5-6 times per year for various reasons…

  19. Mark did anyone respond to you about paying this and getting reinstated ? They hit up my husband last week

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