Travel ticketing is an industry, but creatively finding and booking the lowest fare is an art. Ticketing agents like Kayak and Priceline have enabled the comparison shopping of flights, but only the most sophisticated bargain hunters understand how to book “phantom flights” in order to cheat the system and obtain the lowest possible fares. Ironically, these users are leveraging the airline’s very own discriminatory pricing policies in order to identify system booking ploys and obtain these low fares.
In one type of booking ploy flyers can use a “Hidden city” in order to obtain a lower fare on a route to a hub city. For example, instead of booking a direct flight from San Francisco to Dallas/Fort Worth (DFW), a flyer can save $400 by booking a flight from San Francisco to Austin via Dallas/Fort Worth (just remember to get off the plane in Dallas…).
Another type of booking ploy leverages “Round Trip” discounts. Airlines try to segment customers and charge business travelers, who often book one-way tickets, higher fares than leisure travelers. Thus, one-way ticket prices are sometimes heavily overpriced in comparison to the round-trip fare. For example, on a flight from Buenos Aires to Atlanta, a traveler flying one-way could save over $1,100 dollars by booking a round-trip fare vs. booking the one-way fare (chart below).
While both the “Hidden City” and “Round Trip” booking ploys are strictly forbidden by airline ticketing policies, there is very little press of flyers being penalized for such activities (i.e., airlines do not go after violaters). From the customer point of view, flyers on forums promoting these activities often express feelings of justification for having taken advantage of these loopholes. In a recent NY Times article titled How to Beat Low Fares, Nate Silver said that flyers confronted by airlines of ticketing fraud should “proudly state that you’re doing your part to help the airlines understand the inefficiencies in their pricing structures, and that you’re bringing exorbitant fares more in line with the free market.”
While I do not want to debate the morality of booking phantom legs, I could not disagree more with Nate Silver. These discriminatory pricing tactics employed by airlines reveal their sophistication and acute understanding of the marketplace. If these tactics did not exists, then some travelers, who are willing to pay more for flights, would not be paying higher prices. Thus, prices across the board would have to increase, not decrease.
*All air-fares are based on kayak.com search results for one-way flightson on May 23rd. The flights are the cheapest flights for the carrier listed and were researched on May 10th.