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peersteve

.....Thanks for amplifying my point earlier.....hidden-city shenanigans are the flip side of airlines overbooking...... Airlines are allowed to overbook, and the penalty to the airline is relatively low, with passengers taking $200 vouchers rather than cash.

If airlines want to over-react on hidden-city games, then how about mandating full disclosure announcements when airlines ask for "volunteers" -- something like: "Because we cannot give you the seat you paid for on this flight, your legal rights are to receive.........but we are first offering just......"

lg10

Yup, I have done this many times at my own gym as a matter of fact. I tell them, "you need to care about keeping your long-time customers happy too!" and they always find a way. In cases of phone/netflix/etc. offers, it's a bit of a harder sell, but you can still usually talk them into matching the offer - except in cases of monopoly (e.g. local phone company)....

--LG

CyBeR

That makes no sense.

Yes, the seat would be available. (In practice, it already is due to overbooking, but let's not take that into account for now). But there is no lost revenue; the seat is paid for. Just unused. If there were no $95 option, the customer would've gone to another airline that flies A-D-B for a lower price instead.

If airlines can't support pricing that seat the full way at $95, they shouldn't sell that seat for $95. Obviously if A-B-C costs $95 and A-B costs $495, yet the A-B-C fare (at $95) is high enough to make a profit, then they are grossly overpricing A-B fares. It's the airline ripping off the customer, and it's the customer's right to avoid that. It's not the customer doing unethical things here. The airline is.

Taking overbooking back into account-- they'll likely actually gain money here. The passenger who didn't show up for the second leg does not need to be transported. This saves time, fuel, baggage handling costs, food and drinks in the plane, potentially food and drinks in the lounge, per-passenger airport departure fees, etc. And the seat can be given to someone else who would've been IDB'ed. This saves the airline the IDB compensation and it means the seat is now paid for twice.

xSTRIKEx6864

Airline attempt to disallow "hidden city ticketing" should be outlawed.

cepheid

Airline prices are hardly determined by true costs, much like the prices of cars or consumer electronics are hardly determined by true cost - the airline, or the car companies, or the electronics companies, charge what people are willing to pay.

By charging "what the market will bear," the airline is doing nothing unethical. Passengers are always free to not buy a ticket and either find an alternative carrier or, if no such carrier exists, to find alternative means of transportation. If a customer feels that a given price point is a "ripoff," the customer is not forced to purchase it; there is no pre-existing agreement between an airline and a passenger before the ticket has been purchased.

Once the ticket has been purchased, the customer has entered into a legal, and legally-binding, contract (the Contract of Carriage) with the carrier. As part of that contract, the customer has agreed to travel from origin to destination for the price paid; the customer has also explicitly agreed to not halt his/her trip at an intermediate city - that clause is written into the contract to which the customer has agreed.

It is entirely a matter of fact, not opinion, that a breach of contract is exactly what is occurring. However, you are correct that it is a matter of opinion whether or not the passenger is being unethical when he/she willfully breaches contract by disembarking at the intermediate city - some will call it unethical because it is reneging on an agreement, while others will call it ethical because it is a simple business decision, much as goes on between companies every day.

Thing is, you can't have it both ways. If it is ethical for the customer to willfully breach contract because it's a business decision, then it's also ethical for the airline to charge "what the market will bear," because that's also a business decision. If it's unethical for the airline to do so because they're "ripping off" the customer (a matter of honor and fairness), then it's also unethical for the customer to renege on the contract (also a matter of honor and fairness).

There are real merits to both sides - it can legitimately be argued that the customer is acting ethically in his/her own business interests, or that the customer is acting unethically by reneging on agreement. However, I again state, you can't have it both ways - saying that it's unethical for the airline to price tickets at market value because it's not "fair" and also claiming that it's ethical for the customer to renege on an agreement because it is "fair" is, IMHO, pure hypocrisy.

trooper

Nicely put! ^

epiding

This hidden-city ticket issue has long on my ethical nerves - there needs to be a major consumer protection lawsuit regarding this to settle it once and for all. Its price gouging pure and simple. True perhaps the price is what consumers may be willing to pay, even if exhorbitantly high, but presidents (of the United States) both GOP and Dem, have warned airlines and hotels to not price-gouge opportunistically.

And here is why its price gouging...

A-B-C is $100
A-B is $500

but if one separately books B-C on same route, its most often only $100-300, which is < $400 price diff.

Hence, by charging A-B $500, A-B-C $100, but A-B and B-C only $200-400.... that is inherently by definition price-gouging on route A-B. (This matched booking comparison also negates all arguments about inventory management and perishable goods.)

Contracted price is one thing, but unethical price gouging has long been an area that Commerce dept is vigilant about.

There seriously needs to be a major lawsuit against airlines about this.

Cometintintin

MORE ANALOGIES

A couple of years ago, I was offered “breakfast stravaganza” for $1 usd and the commitment to attend during breakfast a talk about a time-share property.

I knew the breakfast stravaganza was held in Cancun, and that these guys would fly you and host you 3 days in Cancun for that dollar and the commitment to attend the time-sharing event…

So I gladly took the deal, paid my dollar and flew to Cancun and stayed in a 5 star hotel for 3 days… Missed breakfast, wasn’t in the mood, wasn’t hungry, so I skipped…

On my checkout bill, I was charged with the full flight and hotel value… $2000 usd… had a big discussion and at the end I opted to attend one of those time-sharing meetings… (guess what? I bought a time share I still use to go to Cancun)



But, I consider this a good analogy; They offered me a breakfast for 1 buck and my commitment to attend a talk. I knew the breakfast was in Cancun, but that was not part of the offer, the offer was just a breakfast.

I took advantage of knowing that this took place in Cancun and tried to wise-up… At the end, I now understand that it was a breach of my contract with them.




Another analogy that came to my mind was that time when mobile telephone companies would sell you a phone for $1 dollar if you contracted a year of service. If you wanted out before the end of the year, they would charge you the full price of the phone as a penalty…

guv1976

Wirelessly posted (BlackBerry8530/5.0.0.601 Profile/MIDP-2.1 Configuration/CLDC-1.1 VendorID/417)

Without commenting on the ethical issues, I thought that I would add a data point.

AA and CO currently offer a $975 all-in one-way fare on their nonstops from DFW to EWR. On most future dates, CO offers a $142 all-in one-way fare for DFW-EWR-ABE, with transportation on the EWR-ABE leg operated by a bus with a CO flight number. (Last week, CO was offering a $49 all-in one-way fare for most future dates on the DFW-EWR-ABE route. I don't know why CO was offering a $49 fare, but I suspect that it had something to do with AA's entrance into the ABE market.)

lg10

But legally the phone companies were challenged and are now required to pro-rate that "penalty" or any other early-termination penalties, according to how long you were a customer before cancelling. And, you have a grace period to cancel for free (30 days?)...several new protections were instituted after challenges to the anti-consumer situation you describe.

I still think it matters that B is on the way from A to C, i.e. that it's not A-B or A-C in a vacuum.

--LG

cordelli

There was a lawsuit against Delta, Northwest and US Air seven or so years ago about it, not sure about the outcome. Apparently not significant enough against the airlines to stop it.

Global_Hi_Flyer

You cost them $400 only if they could sell the seat (on either segment) to someone else. If they can't sell the seat, you have "cost" them nothing. They may not be making all the revenue they expect to make, but there is virtually no "cost" involved.

Agree, except with Secure Flight and blacklisting they can make your life very, very miserable. You are now positively identified. I wouldn't be surprised if they refused to carry him in the future.

They may try to sue, but that will run the risk of oodles of bad publicity that may well cost them more in goodwill than taking some other kind of action. The fact that it's a contract of adhesion (you can't negotiate it) and prior case law will affect the outcome.

Actually there is no legal requirement to pro-rate the penalty or offer a 15/30 day trial.... and the penalty recently went up for smartphones. There was huge public pressure, bad publicity, and at least one competitor that offered more favorable terms. You still can't do a 1 year or no-contract deal with ATT for an iPhone - it must be 2 years, and the phones are locked so you can't take them to another carrier.

chandi

Unlocking your phone has been legal (though unsupported by carriers and manufactures) for a while now.

Not to give the airlines any ideas but the Sydney trains (CityRail)seem to have come up with an innovative solution to this problem.

If you take the green line from to the airport there are 4 stations (Green Square, Mascot, Domestic Airport, International Airport) that have a station access fee.

This means if you get a ticket from Central (down town station) to any of the 4 above it will be around $15. But the stations after that the price drops back down to the normal suburban rates (around $2-$3ish).

Many have tried to buy a ticket to "Wolli Creek" station (one stop after the International Airport) and get out at the airport but the turnstiles decline the ticket and you need to add the "station access fee" before exiting.

I think the reason for this is (I could be totally wrong here) that these stations were privately built.

So may be the airlines can have a "airport access fee" for the hidden city though I have no idea how that can be enforced.

nightom22

I agree with most of the comparisons above. I dont think there is any basis on which the airline can sue you. Your still paying the same price one would pay for A-B-C except your actually saving the airline some fuel by lowering the weight of the B-C route.