American Airlines Wins $9.4 Million From ‘Skiplagged’ Site That Exploits Airlines’ Business Model

A Texas federal jury has awarded American Airlines a whopping $9.4 million in a lawsuit filed against Skiplagged.com, a website that helps travelers get cheaper flights by booking flights with a connection and then abandoning the connecting flight to the final destination.

The airline industry loathes Skiplagged, even though there’s technically nothing illegal about the practice it’s promoting. Last week, the court awarded $4.7 million from Skiplagged’s revenue based on an estimate of lost fares and another $4.7 million for copyright infringement, as it was scraping American’s flight schedules in violation of the airline’s terms of service. 

As of today, Skiplagged still returns fares and routes from American Airlines. It’s unclear if that will change. We have reached out for comment.

Most airlines expressly prohibit skiplagging—effectively an exploit of the airline business model—and use technology to try and detect when customers are doing it. Travelers have reported being banned from certain airlines for years after being caught.

The concept of skiplagging—and why airlines hate it—is somewhat complicated to understand. Let’s say you want to travel from Boston to San Francisco, and a search on Google Flights returns one-way trips costing $300. You could instead book a flight from Boston to Sacramento with a layover in San Francisco for $199. In essence, what Skiplagged is doing is revealing this “hidden” itinerary that gets you to San Francisco for $100 less. All you do is book the flight to Sacramento, and when you land in San Francisco (your actual intended destination), just leave the airport and abandon the connecting flight. 

It seems counterintuitive — why would flying to San Francisco and taking another flight to Sacramento be cheaper than just flying to San Francisco? Essentially, major airlines work on a model in which direct flights between every city would not make sense — how many people really want to fly from Boston to Sacramento? So in the interest of efficiency, the airlines use major cities like San Francisco as central connecting hubs for flights to other destinations with less demand. The airline is charging the passenger based on demand to Sacramento, offering a reduced fare to ensure it fills those seats to Sacramento and generates at least some revenue. Airlines also feel they can charge more for direct flights because of the convenience factor for passengers. 

But skiplagging messes with the business model. In the case of skiplagging, airlines use algorithms to estimate how many passengers will miss their flight, and then intentionally overbook the flight to generate extra revenue. The airline gets revenue from the person who missed the flight, and additional revenue from someone else who in turn took that seat. When a passenger makes the first leg of a flight, they have to assume that the passenger will also make their connecting flight and cannot overbook that seat. That’s potential revenue left on the table for American Airlines. 

It’s hard to feel sympathy for the airlines in this case. Anyone who travels regularly knows how gate agents constantly plead with passengers to change their flight when a plane has been overbooked and too many people show up. The airlines are playing games to maximize revenue and frustrate customers—skiplagging just turns the tables on them, returning some power back to the customer. But a judge decided that American’s terms of service against unauthorized scraping are clear, and Skiplagged decided to violate them anyway. It’s not dissimilar from the way in which AI companies have decided to ignore terms of service agreements to scrape content sites. 

Fortunately, you don’t actually need to use Skiplagged to find these fares. If you’re clever enough, you can do it using any other travel booking site like Google Flights or Expedia. Just don’t do it too frequently on the same airline or you may well get caught. And keep in mind that you cannot travel with checked luggage using this method, as your luggage will be sent to the final destination. Traveling light is better anyway.