American Airlines Has Just Issued A Warning To Travel Agents About ‘Hidden City’ Tickets

Serial airline leaker JonNYC flags that a memo has gone out from American Airlines to travel agents, available on its SalesLink platform, warning them that the carrier is cracking down on a variety of ticketing techniques, including hidden city ticketing and ‘churning’.

Over the summer I wrote about American directly investigating customers for ticketing practices that violate the airline’s rules, and more recently confronting customers at the airport and demanding passengers pay up for their past sins against the airline.

Now they’re warning travel agents. Here’s the memo:

Issued:  January 26, 2021American Airlines will begin monitoring common booking practices which may result in an unfavorable outcome.

These practices are identified as:

  • Churning
  • Hidden City
  • Inactive Segments
  • Marriage Segment
  • Origin and Destination (O&D) Manipulation

Further detail on these offenses can be found on our addendum to the Governing Travel Agency Agreement (GTAA) for ARC accredited agencies and the IATA Passenger Sales Agency Agreement for international agencies. It is important that you familiarize yourself with these unfavorable practices as it will help prevent the issuance of future debit memos.

Additionally, please be aware that automation will be rolling out in phases to help us identify these types of occurrences and detailed remarks will be entered in the SSR OTHS Field.  Our first phase will identify excessive churning, and messaging will be placed in the booking as follows:

SSR OTHS YY  RIPA/EXCESSIVE CHURNING

Future phase messaging:

SSR OTHS YY  RIPA/HIDDEN CITY PARTIALLY USED ITINERARY

SSR OTHS YY  RIPA/MARRIED SEGMENT VIOLATION

SSR OTHS YY  RIPA/ORIG DEST VIOLATION CLASS NO AVAILABLE

SSR OTHS YY  RIPA/INACTIVE SEG REMOVED FOR CHECK IN

We understand these unfavorable practices may occur due to confusion or misunderstanding of American’s policy. We hope this advanced notification will be helpful with your future bookings.

As always, we appreciate your attention to this matter and thank you for your business.

American Airlines will sell tickets – and even award travel – on the basis of ‘married segments’. They’ll make a discount fare available, for instance, Oklahoma City – Dallas – London that won’t be available on the non-stop. Pricing the lower price (in miles or money) and then dropping the Oklahoma City – Dallas segment is against American’s rules.

So is buying a ticket from Miami to Dallas to Oklahoma City and just getting off in Dallas, skipping the Oklahoma City flight, because Miami – Oklahoma City via Dallas is cheaper than buying the non-stop.

Here churning refers to cancelling and rebooking the same itinerary, for instance to circumvent ticketing time limits or hold inventory without buying it.

There’s not a lot of revenue in airline tickets. With the government doling out cash for the airline to keep everyone on payroll staff need something to do! However the complexity of the ticketing system turns customers into enemies which suggests to me something is wrong in the underlying way that airlines sell seats.

No one yet has really disrupted that in a big way, however. And as long as government airports lease out prime gates to incumbent players and exclude new entrants, and as long as slots at congested airports are gifted to incumbents and keep out new competitors, it’s likely to be a long time before someone does.

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 »

More articles by Gary Leff »

Pingbacks

Comments

  1. I feel like now is NOT the right time for AA to be ‘cracking down’ on paying passengers. I can’t put my finger on it, but I just sense some reason why airlines should be doing everything possible to encourage people to fly, not threaten them with recrimination for trying to get the lowest price…

  2. They can take drastic measures but it won’t stop the consumer. I’ll just pay with prepaid card and use a 7-11 address at for my hidden destination. I welcome AA trying to enforce it. Tougher stance will will make the game more enjoyable. Catch me if you can!

  3. Could you please provide an example of O&D manipulation?
    Is it flying TYO-HKG-LAX whereby the fare is cheaper than HKG-LAX?

  4. “ something is wrong in the underlying way that airlines sell seats”

    There is something very ignorant or hypocritical about this statement. Can t Believe you have a site about airlines saying this

  5. It is surprising how widespread and persistent travel agencies are to force segments into a certain booking class by linking up elaborate O&D itineraries.

    On another note, Gary have you considered writing a piece on airline executive compensation once the annual filings for AA are released?

  6. I would really like to see a landmark court case against airlines around pricing, and clearly defining the rights of passengers choosing whether or not it is permissible to only partially consume what they purchased.

    Is there another industry in which a company sells the customer something, but defines the necessity of full consumption of what’s purchased? It’s not like AA is being asked for a refund of the flights not taken, so where does the line get drawn on the validity of self-defined unilateral contract of carriages?

  7. The airlines have been whining about hidden city etc. for 30+ years, and obviously it continues; and they have not been able to stop it despite efforts for 30 years and counting.

  8. SDG 🙂

    It’s almost as if AA’s revenue protection team has done such an effective job that only make-work projects remain, not remunerative enough to justify their continued employment in that department.

  9. @ R B

    That would be completely fine, as long as you take the flights.

    The example that you might look for in that which would be against AA’s rules is if you needed to fly HKG-LAX, and a HKG-LAX ticket cost $1,000, but a HKG-LAX-SFO ticket cost $750. If you book the HKG-LAX-SFO ticket, and then just leave the airport in LAX, intentionally throwing away the last segment to save the $250. That would be against the rules.

  10. Seems like AA’s corporate security/rev team are extremely bored with no one actually flying and so they’ve decided to do a crackdown.

  11. If only AA would put as much effort into improving their operations and customer service as they do into stopping hidden city ticketing

  12. So now if I go out for a burger and drink, will be in trouble for not finishing my fries, since the burger and drink priced individually is more than the combination meal?

  13. We have tickets pdx-Dallas-myrtle beach, sc. I got an email they changed our flights from Pdx-charolette-ord with an 8 hr layover then on the myrtle beach. Wtf. Oh. And no info about the ord to myrtle beach. This for March so I’m hoping someone figures this shit out. And they have us leave pdx a day early!!!

  14. @ Gary

    > And as long as government airports lease out prime gates to incumbent players and exclude new entrants, and as long as slots at congested airports are gifted to incumbents and keep out new competitors, it’s likely to be a long time before someone does.

    I don’t think that’s the problem since quite a few new successful airlines have started in the last decades, such as Virgin, JetBlue, Spirit etc. and David Neeleman’s Breeze is about to start. The problem is that the government allows airlines to buy each other out eliminating competition (Alaska buying Virgin, American colluding with both Alaska and JetBlue, etc.) removing the need to innovate/provide what the customer wants in pricing. I am sure you’ve noticed now that 3 pricing groups control the Transatlantic market change fees have skyrocketed to $800 or even tickets that don’t allow changes period (use it or leave it).

  15. @R B. Yes that is a perfect example. I was given a car by a family member one time so I had to drive the last leg of a flight (or maybe it was the first?). When I called to explain my situation they (I still can’t believe this) actually charged me money to not be on the one part of the ticket. So I was letting them know, they could keep my money, have a lighter flight, happier other customers who have an empty seat or could even resell that seat… but they still acted like I was really screwing up their day. I still do t understand why the he’ll they care.

  16. To Matt’s point, I remember Gary mentioning the trend about Airline loyalty programs becoming more competitive/generous during downturns, and then getting stingier during good times. This current downturn seems to be the exception.

  17. Travelers are savvy enough to know not to mention to the travel agent what they are doing with a hidden city ticket. How can you blame the agent for this?

  18. Airlines seem like they are always playing the victim these days. Whether it’s a pandemic, high fuel costs or just clever customers.

  19. Really if I buy a 39.00 fare from Atlanta to Miami by way of Dallas. why can’t I get off in Miami? What’s the problem with me demanding the agent only check my bags to Dallas and redo my ticket just to Dallas? I want to return from Dallas back to Atlanta right.. AlthoughI didn’t buy a contract (ticket ) just to Dallas. Doesn’t matter!Even if I paid squat for that last segment and the airline has to hold that seat in my name. Big deal.And knew I wasn’t going to use last flight. The fact they couldn’t resale that seat to another customer. Not my problem. . Airline will have to just overbook seats if they wanted my reserved seat and I no-show at the last minute. Or pay other customers to give up their seats to accommodate other passengers. Not my problem, However isn’t knowingly scamming the airlines doing that?Thats whats happened with those fraudulent emotional support animals claims on flights. It made it harder for persons with a trained service dog..Some thought they should be allowed to disregard rules. .Do you expect to get paid when you work? The airline is a business like any other. While reading all those comments it made me sad because your writing its ok to rip off others.Its their fault .?Wow did ya’ll hear yourselves?

  20. Wait, did American add seat-back IFE to all aircraft? Oh just kidding, their product is still totally inferior to Delta and jetBlue.

    thx

  21. Because Travel Agents can control the passengers better than AA?
    Because AA has stupid pricing policies?
    In what world does it make sense for an airline to sell MIA-DFW-OKC cheaper than MIA-DFW?
    All AA needs to do to fix this is to fix their own pricing system. In fact that might even be cheaper than spending all this money and efforts on IT “rat” teams, etc.

  22. @DaninMCI – the MIA – OKC is generally never going to be nonstop, so that passenger has several airline choices going through different hubs. AA is your only choice for a nonstop MIA-DFW flight. It might be cheaper to fly United via Houston or Delta via ATL or some other low cost airline, but it’s not a nonstop. While one might argue that raising the fare to OKC or lowering the nonstop would be the better option, the former is likely to lose the customer to another airline, and the latter causes AA to get less revenue on everyone flying the nonstop route, and they weren’t in good financial shape before the pandemic. What are their options between bankruptcy and making these practices unrewarding?

  23. I flew on American Airlines back in September and had the worst possible experience with that airline. When I found out the government was bailing them out I was furious. They didn’t deserve a penny because they didn’t make any sacrifices at all. No social distancing, pure chaos when boarding, passengers on top of each other and they charged and additional $60 for me to sit next to my spouse instead of a perfect stranger in the middle of a pandemic. Every seat was full, in fact so full they were asking passengers to switch to a different flight. I flew on a different airline just a month earlier (we were moving and needed to find a home otherwise I would have skipped the airport entirely) and they spaced everyone out, leaving the middle seat open and only boarded 10 people at a time. Completely different experience. I will never fly American ever again. Good luck getting anyone to fly when you punish the very customers that pay for your paycheck.

  24. Comical. City skipping has already been deemed legal. Airlines price gouge all day-every day….STOP! JUST STOP! AA spend your time getting your airline back in decent order.

  25. No doubt, there are many people that use hidden city ticketing to their advantage. Regardless of whether or not it is “right” for airlines to punish those who routinely hop off before the final destination, I am wary of automated enforcement. It’s one thing to have potential violations flagged by the system and forwarded to a team for review, but I can imagine a world of issues if an automated scheme is shooting out debit memos. Any frequent traveler has had issues where boarding passes didn’t scan correctly, or system muck-ups didn’t show travel as having been completed. Add on to that the reality that plans change, and without refundable tickets, it’s much easier to abandon an unneeded segment rather than spend time to cancel it.

  26. If you have a decent computer system this would be pretty easy to flag. Anytime someone books a connecting flight save the purchase price as well as the price without the final leg. Then anytime someone doesn’t complete the trip do a comparison and if it is cheaper raise an alarm. Years ago sure it would be hard to catch but now it should not be.

    As to whether it is fair, sure, if you don’t like it, don’t buy the ticket. Is it fair for me to have to buy 6 items of something at a grocery store to get a lower price when I only want one?

    As long as the rules are known ahead of time it is legit. Sure it seems wacky but that is life.

    And I don’t know why “Jim” thinks he would get away with it. You need a legit name and ID to buy a ticket and get through security so using a prepaid card, avoiding using your FF #, etc. isn’t going to allow escaping from it.

  27. Well let’s be honest. AA sucks. Has for a very long time. Seems to be their business model. Good luck with that.

  28. This article covers a touchy, and somewhat controversial, subject in the airline world.
    I understand it is your position to be an advocate for passengers and I am not one to run to their defense all the time either. However, your article would have been helped if it explained why hidden cities exist in the first place. You were right in saying that there isn’t much revenue in selling tickets (even before the pandemic, when airlines had record profits). The profit margin on a flight is razor thin, usually the last two seats on a fully booked flight (just a rough estimate) Yes, they did get billions in forgivable loans from the government, but Delta still lost about 20 billion last year, and they’re calling that a win since they went from losing over 100 million a day to less than 10 million a day. Running an airline is expensive I guess.
    What you fail to mention is that there are huge subsidies for airlines to service smaller markets, whereas they pay high fees at busy hubs. That’s why it’s cheaper to fly from Chicago to Panama City via Atlanta than just ORD-ATL, period. One of the big headaches happens when passengers check their bags. Obviously, it’s their responsibility to go pick it up in their final city if they check it the curb or the ticket counter… But the real problems arise when it’s a smaller aircraft and overhead space runs out and they find out their carryon is going to another city. It causes a big scene. They have to be rebooked, at their expense, etc. Nobody is happy. There are obvious security concerns why you can’t just check a bag to different city than which you are ticketed for, just let that settle in.
    The other problem is that now there is an empty revenue seat, going to a small market, one that might have been filled earlier in the week, etc. This creates headaches for the system, even when all flights were full, and airlines were regularly overbooking. While there are always standbys for huge international hubs like NYC and ATL, there are very few for small markets. Most likely, you’d be helping a non-reving crew member get home.
    Finally, on the subject of airlines price gouging. It is quite the opposite. Flying used to be a luxury. Thanks to ultra low cost carriers like Spirit, Ryanair, Frontier, prices on all airlines have dropped tremendously, even before covid. Now they are rock bottom. And those pesky fees that used to generate so much income, the airlines have dropped those too, thanks be to covid.
    I do agree with one commenter’s statement about flying on a packed aircraft during a pandemic. American and United’s decision to keep packing planes (soft blocking) whenever they can pick up revenue is atrocious. I believe now only Delta is the last airline committed to hard blocking middle seats and keeping loads at 60 percent until the end of March, which will likely be extended.
    They are truly looking out for their employees and passengers. There is hand gel everywhere in their gatehouses, terminals, and ticket counters. When I flew American in September, I couldn’t find any hand gel and sat on packed planes where the crew couldn’t manage the large crowd of non compliant passengers. Never again….. Delta always and forever!

  29. No one has commented on the “excessive churning” Most readers will be familiar with AA’s “hold” policy (which is more customer-friendly than a 24 hour return policy). Does this memo imply that AA means to penalize customers who “hold” flights and then cancel them before the hold expires in order to put the same itinerary on hold again (and, thus, put off expending the funds until the published price expires)? How can it call something totally made possible my its own website “an offence”?

  30. Having spent 35 years in the travel industry this has been a no-no for years. I’m surprised the reservation system lets someone get away with this. Before deregulation you could issue a ticket using a hidden city. As for churning travel agencies have been know to get debit memos for this practice. Also if an agency booked a reservation and it wasn’t ticketed in 24 hours the airline’s would issue a debit memo.

  31. Amazing how many people rationalize breaking the airline ticketing rules. You may not agree and they may not appear logical at times but the rules are clearly spelled out and if you break them the airline can clawback miles, close accounts or Bill you for revenue you didn’t pay.

    Again you may not like to but they set the rules and courts have held they have the right to enforce them. BTW if you thin this is just AA you are delusional. DL, UA etc will do the same thing.

    Analytics and AI are getting to the point systems can easily identify people that take these steps so do so are your own peril.

  32. Does anyone actually think that a management team that created Oasis and then wasted vast sums implementing it during Covid has greater ability than my Chihuahua to run an airline. My Chihuahua would never have done something so moronic. Are Delta and United paying Parker’s salary as a strategic investment?

  33. It’s pretty easy to get around this. Don’t take 2nd leg. Call airline and tell them that you felt sick like your were getting covid symptoms. You will be quarantining to make sure.

  34. Hidden city is nothing new. About 30 years ago when my son first started flying for business I noted his travel agency used a hidden city. Since he lived in Dallas his golf clubs were going to New Orleans. The DAL – MSY ticket was separate and I told him to give it to me at the end of his trip. His company wrote a letter to his travel agency forbidding them to cheat. He gave me a copy of the letter and the ticket . Both were sent to Corporate Security
    No reply from them. A thanks would have been nice. Now for the rest of the story. About 6 months later I was notified by corporate security that they were going to investigate ME for fostering hidden city. They got more than an earful from me.
    That was the first time I was involved with Corporate Security. The next time was probably 25 years ago and I don’t recall the circumstances but it was also illegal and involved a travel agency. Just by chance there happened to be an employee of Corporate Security at my office on another subject and I hand delivered to him all the documentation I was about to send to HDQ.
    Wouldn’t you know it. They were back to me again after about 6 months accusing me of something involving the hand delivered the info to their representative
    I later discovered that the wife of one of the Corporate Security employees was working in reservations and I could tell that the agency was doing something illegal. Do you think I turned her in? Not on your life. Enough of dealing with those that didn’t seem to know what they were doing and I didn’t want to be involved again
    Lots of old memories

  35. > As to whether it is fair, sure, if you don’t like it, don’t buy the ticket. Is it fair for me to have to buy 6 items of something at a grocery store to get a lower price when I only want one?

    I don’t think that’s a good analogy. A better analogy would be if you “buy 6 items” but then intentionally give one or more back to the cashier because you didn’t want all 6. Can the store later contact you that you broke the agreement to “buy 6” because you didn’t take them all and then demand extra payment from you as if you bought the items individually instead?

  36. “Mw says:
    January 26, 2021 at 10:19 pm
    So now if I go out for a burger and drink, will be in trouble for not finishing my fries, since the burger and drink priced individually is more than the combination meal?”….

    …Now, that might put you in a tough spot if you’re at the airport eating that meal waiting for your last leg and suddenly you have no more time and you have to decide either to NOT finish your fries OR miss that last leg you didn’t need!!!… What to do???

  37. “Mw says: January 26, 2021 at 10:19 pm So now if I go out for a burger and drink, will be in trouble for not finishing my fries, since the burger and drink priced individually is more than the combination meal?”…. …Now, that might put you in a tough spot if you’re at the airport eating that meal waiting for your last leg and suddenly you have no more time and you have to decide either to NOT finish your fries OR miss that last leg you didn’t need!!!… What to do???

  38. @Jim I totally agree! Screw AA AND anyone else that doesn’t like it, as the airlines have been screw the consumers for decades. They want it their way and everything that comes with it…..good luck.

  39. How is it not price fixing to charge people more for a route than they do from a connecting city?

    Also, a customer buys a ticket, should be able to get off at any stop they want.

  40. I tried to use AA tickets that we had to cancel during the height of the pandemic. I wanted to go from LAS to Spokane. The trip on American was between 7.5 hours to 17.0 hours. So I called American and asked about booking on Alaska. The agent was lovely but when she told me that the cost would be $6000-, I did not book and instead called Alaska. First class on Alaska was about $700- each. I receive an email almost everyday from AA and I have flown millions of miles with the airline but the schedule is so reduced as to make it difficult to fly for business.

  41. Being old I remember when airline tickets were totally refundable, when such tickets could be used as cash to buy a flight on a different airline from that originally booked. This worked great for canceled or delayed flights, you could go to a different airline counter and book with them. But this was before deep discounting and execrable airline management came into play. Prices were higher but customers were valued then, something that is totally absent today.

  42. Well I became fed up with airlines 33 years ago. Awful service and insane regs – including the ticketing crap in this article. The final straw was when my then 3 year old son was first to detect an inflight engine fire. My wife showed the stewardess the fire (it was highly visible – the aluminum cowling was burning and peeling off the engine like lit newspaper). She RAN forward to notify the clueless flight crew. The plane returned to BOS on one engine and safely landed. I told my wife not to board their next plane. NFW.

    That day we moved to private aviation. First individual charters, then wet lease charter in blocks of 25 hours, then 50 hours. Next stop NetJets fractional in 1996, then finally whole aircraft ownership. Don’t shade me with hate. Readers here need to know that a LOT of the airlines formerly best pax have moved private. And these former customers have taken a great deal of profitable revenue out of the airline coffers. And not only that – these former high end customers also provided valuable but tough feedback to top management. They didn’t call customer service, they called top management and the board members – at home. Now they are mostly ALL GONE and the scheduled airlines are in a race to the bottom.

    Today we only use commercial sparingly on long haul transoceanic flight. In the past 10 years our flight dept has flown about 1700 flights for the family. And by the way, I have never deducted a penny for private aviation from my tax returns except for charity flights for the Special Olympics. So hold off on the hate.

    The airlines have a problem here. I discussed this issue with Robert Crandall (ex-AA CEO) and he totally agreed. Some would say he help cause the problems in the industry but I don’t want to go there. In the context of this article and my comment it is ironic to note Crandall and I were meeting to evaluate an investment opportunity in private aviation.

    So I watch for signs of improvement in the scheduled airlines and I want to see improvement as a citizen and a grandfather with a big family. I love the US and the airlines are important to our country. There were glimmers of hope with much better rules and lighter pax loads in the early stages of the pandemic but that seems to be fading now. Unfortunately I don’t really see real improvement yet. So sad.

  43. I haven’t been on an airline since I retired three years ago. It’s a glorious feeling.

    When the wife and I travel now-a-days it’s by ground and we travel very slowly and at our dictated pace. That’s also a glorious feeling.

Leave a Reply

Your email address will not be published.