FORT WORTH- A federal jury in Fort Worth has ordered travel website Skiplagged to pay American Airlines (AA) $9.4 million for promoting “skiplagging” on Tuesday (October 15, 2024).

Skiplagging is a practice where travelers book flights with connections but intentionally abandon the final leg to reach their intended destination at a lower cost.

American Airlines Skiplagged Lawsuit

The jury’s verdict follows five days of trial before U.S. District Judge Mark Pittman, North Texas U.S. District Court splitting the damages equally between $4.7 million for revenue disgorgement and $4.7 million for copyright infringement.

The court rejected American Airlines’ primary claim of trademark infringement.

American Airlines initiated legal action against the New York-based website in 2023, asserting that Skiplagged exploited the airline’s reputation while promoting fares that violated airline policies. The airline argued that this practice risks ticket cancellation for customers.

Skiplagged’s attorney William Kirkman expressed satisfaction with the jury’s decision to reject the trademark infringement claim, despite the substantial monetary penalties imposed for other violations, Court House News reported.

Not Illegal

American Airlines enforced its stance against skiplagging by removing a 17-year-old passenger who attempted to use a New York-bound ticket to travel from Gainesville to Charlotte in 2023, imposing a three-year ban.

Hidden city ticketing occurs when travelers book flights with connections but exit at layover cities, exploiting price differences between direct and connecting flights. While not illegal, airlines consider this practice a policy violation, citing revenue losses from unsold connecting seats.

American Airlines alleges that Skiplagged purchases tickets directly from the airline’s website while posing as customers. The company then reportedly instructs buyers to conceal this practice from the airline.

The airline’s 37-page complaint accuses Skiplagged of a “bait and switch” tactic. It claims Skiplagged often displays fares higher than those available directly through American or its authorized agents, contradicting its promise of secret, cheaper fares.

Paul Yetter, American Airlines’ attorney, revealed in court that Skiplagged has generated over $90 million by unauthorized use of American’s trademarks. The website charges customers $10 per one-way ticket or 10% of the base fare.

Yetter emphasized Skiplagged’s deceptive practices, distinguishing it from legitimate travel agencies like Expedia. He argued that Skiplagged mimics authorized agents by incorporating American Airlines trademarks while providing no genuine service or customer support.

Win-Win for Both?

Defense attorneys presented Skiplagged’s evolution from a free flight information website to a commercial platform under founder Aktarer Zaman, who left his software engineering position at Amazon to develop the service.

The business model particularly affects legacy carriers operating hub-and-spoke networks, which rely heavily on connecting flights. Budget airlines running point-to-point routes face less exposure to skiplagging due to their direct flight focus.

The legal precedent for skiplagging cases emerged a decade ago when United Airlines (UA) and Orbitz filed federal lawsuits citing safety and logistical concerns. While Orbitz settled, the court dismissed United’s claims against Skiplagged.

Zaman’s platform challenged traditional airline pricing structures by exposing fare disparities between direct and connecting flights.

Skiplagged website still shows American Airlines and other carriers’ flights but without their original logo to avoid such costly lawsuits.

Do you think Skiplagged violates the policy? Let us know your thoughts in Comments on social media posts.

Feature Image by Caden Henderson (@cado.photo)

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