Q: I read recently that Lufthansa sued a passenger in a German court for hidden-city ticketing, i.e., buying a ticket to a distant city (connecting through a carrier's hub) at a cheap price and getting off at the hub, thereby flying more cheaply than if he had bought a ticket to the hub. The case was dismissed because Lufthansa could not prove what its actual damages were, but Lufthansa has appealed the decision. Has any U.S. carrier ever sued a passenger or travel agency in a U.S. court? Has any passenger or agency sued to challenge the rule as unfair or unreasonable?
A: There are no cases in which a U.S. court ruled on the validity of the prohibition on hidden-city ticketing. A couple of cases mention the prohibition, but the courts appear to assume that it is perfectly valid.
U.S. airlines probably don't need to sue because they have so many remedies already at their disposal. Passengers are subject to the airline's contract of carriage, which, if actually read, is enough to deter anyone.
For example, American's contract prohibits, "purchase of a fare from a point before the passenger's actual origin or to a point beyond the passenger's actual destination" and states that American can invalidate the ticket, refuse to board the passenger or assess the passenger for the "reasonable remaining value of the ticket, which shall be no less than the difference between the fare actually paid and the lowest fare applicable to the passenger's actual itinerary."
Further, under the doctrine of the Supreme Court case of Ginsburg v. Northwest Airlines, the carrier can confiscate all of the passenger's frequent-flyer miles and cancel his account. The airline can probably also permanently bar the passenger from ever flying on it.
In the case of travel agencies, as you know, any carrier can refuse to do business with any agency for any reason, including issuing tickets to clients who use hidden cities, regardless of whether the agency knows what the client is doing. The carrier can also send debit memos for the fare differences and then terminate the agency's authority if it does not pay.
About four years ago, United sued the founder of Skiplagged.com, which displays hidden-city routes to users but is not an appointed agency. The case was filed in federal court in Chicago, but the court dismissed it because the founder was not doing business in the Chicago area.
The parties settled when Skiplagged.com promised not to offer hidden-city routes on United. The website is still in business and offers such routes on American and Delta, among others.
When you click on a hidden-city routing on Skiplagged.com, you get a set of warnings about the risks, such as, "Don't associate a frequent-flyer account. If you do, the airlines might invalidate any miles you've accrued with them"; also, "Airlines don't like when you miss flights to save money, so don't do this often."
If a passenger or agency sued the airline for a ruling on the fairness of the rule, the court would undoubtedly dismiss the suit because only the DOT is allowed to determine such questions.