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American Airlines Cracks Down On Customer Taking Advantage Of Hidden City Tickets

Aug 26, 2020

Many savvy travelers use throw away and hidden city tickets to save money on air fares, but many airlines have clauses that explicitly disallow this type of behaviour.

Hidden city tickets allow passengers to save money by taking advantage of certain situations. For instance, if I wanted to fly one-way from Miami to Dallas in lie-flat business class, it might actually be cheaper to book a multi-segment trip which flies from Miami to Lincoln with a stop in Dallas than booking the single leg between Miami and Dallas. Normally, passengers would have deboarded in Dallas to meet their connecting flight, but the hidden city passenger would instead just have to exit the terminal. Of course this only works if you don’t have any checked bags. More examples are highlighted here.

As airlines implement more and more technology to accurately track passengers and their bags, gate agents and check-in staff find it much easier to spot someone taking advantage of hidden city tickets, but in many cases they leave them to be if it’s just a one-off situation. However one American Airlines AAdvantage member got the shock of his life after an auditing analyst with the airline contacted him regarding his “fraudulent” booking activity.

American Airlines AAdvantage flagged 52 times for using hidden city tickets

In the letter (re-posted on the FlyerTalk forums), American’s corporate security team highlighted 52 trips which they think were booked with the intention of taking advantage of the savings associated with hidden city ticketing. Here is the letter.

Mr. XXXX,

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.

What American Airlines outlines in their legal agreement

American’s Contract of Carriage and AAdvantage program terms and conditions specifically prohibit the use of throw away and hidden city tickets to circumvent their pricing system.

Their COC (last updated July 17, 2020) states:

Reservations made to exploit or circumvent fare and ticket rules are prohibited.

Examples include (but are not limited to):

  • Purchasing a ticket without intending to fly all flights to gain lower fares (hidden city ticketing)
  • Buying a ticket without intending to travel, including to gain access to our airport lounges or other facilities
  • Combining 2 or more roundtrip excursion fares end-to-end to circumvent minimum stay requirements (back-to-back ticketing)
  • Booking a ticket in someone’s name without the person’s consent (which is illegal)
  • Holding reservations for reasons like securing upgrades, blocking seats or obtaining lower fares
  • Booking duplicate or impossible trips, for example multiple trips for the same passenger around the same time (trips a passenger physically could not complete)

If we find evidence that you or your agent are using a prohibited practice, we reserve the right to:

  • Cancel any unused part of the ticket
  • Refuse to let the passenger fly and check bags
  • Not refund an otherwise refundable ticket
  • Charge you for what the ticket would have cost if you hadn’t booked it fraudulently
  • Require you refund to us any compensation we provided like bag delivery costs, and reimbursement for clothes or toiletries because of late or lost bags

Their AAdvantage T&C (last updated August 3, 2020) states the following regarding hidden city ticketing:

You may accrue mileage only for purchased, eligible, published-fare tickets on qualifying routes used in accordance with all applicable conditions of carriage, tariffs, rules and terms of ticketing (including but not limited to compliance with rules prohibiting hidden city, back to back and throwaway ticketing) and travel. AAdvantage® mileage accrual eligibility on airline participant routes is subject to change without notice. Flights to/from Cuba are only eligible for mileage accrual on American Airlines flights.

Consequences

Further down the thread, the concerned traveler said the airline was asking for $2,500 in compensation, which works out to less than $50 per ticket. American has the upper hand in this situation as the 10-year million miler member had about 600,000 available miles in his account. As the poster was not willing to give up so many miles in the name of skipping on the requested compensation, he said he will try to negotiate with the airline for a better price.

Even though airlines are better able to spot travelers flying on a hidden city ticket, they generally don’t take any action unless they see a string of “abuses” like in the case above. It’s also easier to take action against long term mileage members as the airlines have some negotiating leverage versus a one-off passenger flying solely for a cheap ticket with no loyalty towards the airline.

With the Pandemic in mind, it’s unclear whether American has been finding various ways to recover lost revenue, or if this was just one of those scenarios that happened to make it to the web.

Should you gamble flying with a hidden city ticket?

Opinions about using hidden city tickets are split firmly down the line.

Those in favor see it as an easy way to save money, taking advantage of a loophole in the system’s pricing management software. One can argue that if a customer pays for their ticket in full, then they are entitled to use the entire ticket, or a portion of it as they please. This was the case after a German court ruled in favor of a passenger Lufthansa was pursuing for lost revenue in the sum of around $2,000.

On the flip side, airlines are running a business and price fares competitively to match the respective markets, factoring in connections into the mix. It would be unfair for the airline to lose a seat which could have been sold separately at a more optimized fare versus being under the impression that it was blocked.

It can also be argued that American Airlines (in this case) clearly outlines prohibited booking practices, and customers should be aware what the sign up for when purchasing tickets.

Hidden city tickets work well for the one-off scenarios, but those trying to take advantage of this little trick on a regular basis should be aware of potential penalties, especially if you have loyalty towards the airline. Even if you do not book with your mileage account number, there are many ways the airline can link you to your existing loyalty account and have it terminated.

[Featured Photo: Alan Wilson/Flickr (CC BY-SA 2.0)]

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