Tech-savvy travelers have been leaning on the Internet for getaway deals for years, but there’s one site that’s shaking up the industry in a way that’s giving passengers deals and airlines fits. Skiplagged.com — as in “Skip Lagged,” not “Ski Plagged” — scours fares to find the best offers available to desired destinations. That’s not new: Priceline.com (PCLN), Expedia (EXPE), and smaller rivals do exactly that.
However, what sets Skiplagged apart is that it also smokes out itineraries with connecting flights where the ultimate destination is one of the connections. For example, a flight from Miami to Charlotte with a stop in Atlanta might be cheaper than a direct flight to Atlanta. A customer booking a flight through Skiplagged would purchase the flight to Charlotte, getting off at the Atlanta stop.
A longer flight doesn’t automatically translate into a higher fare. Disparities exist given the competitive nature of metro markets, so a faraway destination with aggressive discounters could force major carriers to charge less than they do on a stop along the way.
It’s hard to pass up a great deal, and as a bonus for frequent fliers, it might also translate into more miles being awarded.
Coffee, Tea, or Ethics
It’s not perfect, of course. A passenger can’t check any baggage, since those belongings would continue on to the booked destination. This might not be such a big deal these days, however, as extra fees for checked baggage find more and more people packing light enough to fill overhead cabin bins.
Another knock on these so-called “hidden city” bookings is that they can only be used for one-way flights. Passengers taking advantage of this trick naturally wouldn’t be able to board the return flight from the booked destination. This isn’t a big deal, either: Two one-way bookings are as good as a roundtrip flight. However, it is something to consider.
The third and final thing to worry about is that while not illegal — “hidden city” bookings are technically legal — it does violate the fare rules of most leading airlines. If this type of airfare reservation grows in popularity, eating at the industry’s profits, it could force airlines to refuse service to frequent bookers of “hidden city” tickets.
Buckle Your Seat Belts
Airlines probably don’t want to single out passengers for using this trick: The negative publicity would be brutal for business in a highly cyclical industry.
However, that’s not going to stop them from going after Skiplagged. It’s been so disruptive that the site has now been sued by at least one air carrier and one online travel portal. It settled with Orbitz (OWW) earlier this year, and a judge threw out the case initiated by United Airlines (UAL) on grounds of jurisdiction a few days ago.
The legal fisticuffs aren’t likely over, so deal-seeking passengers will want to weigh the pros and cons of going this route. However, until the industry corrects the inefficiencies of its route-pricing dynamics, it’s not going to stop opportunists from finding ways to get where they want to go by paying the least amount possible.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Priceline Group. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.