Mostly copied from my answer at
http://www.quora.com/Economics/Why-i...-York-directly:
Let's suppose you're trying to fly CLE-PHL-EWR and get off the plane at PHL instead of continuing to EWR. This is basically responsive to your scenario (where you're flying xxx-phl-yyy, yyy-phl-xxx and want to get off instead of taking phl-xxx).
To understand the theory behind hidden-city ticketing, check out United's contract of carriage,
http://www.united.com/web/en-US/content/contract.aspx. It's pretty scary stuff! Technically, breaking the fare rules means they reserve the right to try to charge you the fare difference, cancel all other flights on your itinerary, revoke your frequent-flyer account, etc. But you are probably more interested in what will actually happen if you do this.
If you are a travel agency and routinely do hidden-city ticketing: Every couple of months United will send you a huge "debit memo" (invoice) for the fare difference between the flights your clients took and the flights they had booked. You will pay this "debit memo" or you will lose the ability to book United flights. So, if you book hundreds of people on CLE-PHL-EWR and they all only take CLE-PHL, you may save the client some money in the short term, but it will come back to bite you later.
If you are an ordinary person and occasionally do hidden-city ticketing: United technically could get mad at you, but in practice their revenue protection group has better things to do. After all, a one-off emergency might have come up that kept you from boarding that PHL-EWR, or your plans might have changed, and it's not in the carrier's interest to make your life hard for a rare accident.
As an individual, booking the occasional hidden-city ticket is harmless in terms of practical consequences to you.
However, you will face the following important side effects if you buy a ticket CLE-PHL-EWR and only travel CLE-PHL:
- You won't be able to check bags to PHL; your checked bags will go to your final destination. "Short-checking bags" is a no-no. It's possible that you may be able to check bags to PHL if you're booked overnight in PHL and continuing on the first flight out in the morning.
- As soon as you miss a flight segment, all further flight segments in your itinerary will be cancelled. So if you book CLE-PHL-EWR // PHL-BOS on a single reservation as soon as you fail to show up for PHL-EWR you'll find that your PHL-BOS is cancelled.
- In the unlikely event that CLE-PHL or PHL-EWR is delayed or cancelled, United may try to reroute you to satisfy its contractual obligation to get you to EWR. They have no contractual obligation to get you to PHL. You can imagine an overzealous agent "helping you" by putting you on a nonstop or, worse, routing you through another carrier's hub…
- In the very unlikely event that you do this a whole lot, United revenue protection may decide that you're not a good customer and may prevent you from earning frequent-flyer miles or flying on them again. Or they might send you a letter asking for a lot of money (the fare difference between all the CLE-PHL flights you could've bought and the CLE-PHL-EWR flights you actually booked). This is very rare, because in practice it is not worth their time to do this to people who book a few tickets like this once or twice a year.
You may also, depending on your personal convictions, need to wrestle with your conscience. I think an individual booking the occasional hidden-city ticket is the kind of thing that many people know is wrong, but do anyway because they think they're only cheating a soulless megacorporation which cynically exploits them at every opportunity. (Like making free unlicensed copies of music instead of buying the album on iTunes.)
Airline employees tend to have a heightened sense of empathy for their employer and can generally offer a convincing explanation of why it's not cool for you to break the contract between yourself and United. For an interesting conversation, try asking a UA ticketing agent what they think about hidden-city ticketing some time! There are some on FlyerTalk and you'll read great feedback from them on hidden city ticketing questions.
Personally I think that moral actions can fall on a spectrum of wrongness; I think hidden-city ticketing is less "wrong" than putting a brick in an iPod box and returning it to Wal-Mart for a refund; but it's more "wrong" than jaywalking. It's certainly not a polite thing to do to a carrier.