Fort Worth, Texas — American Airlines has won a substantial $9.4 million in a legal dispute with Skiplagged Inc., a company known for advertising “hidden city” ticket deals which enable passengers to exploit a pricing loophole in airfare costs. A federal jury sided with the airline, determining that the website’s practices, while budget-friendly for travelers, amounted to significant financial losses for the carrier.
The court’s rulings, presided over by U.S. District Judge Mark T. Pittman, resulted in Skiplagged being ordered to pay $4.7 million in actual damages for copyright infringement and an equal amount in disgorgement of profits earned through what the airline deemed as reprehensible tactics.
Despite this win, the jury dismissed claims concerning trademark infringement, providing a mixed outcome for the airline at the trial’s conclusion. American Airlines pursued damages on this ground, claiming that Skiplagged improperly used the airline’s trademarks to sell tickets.
Hidden city ticketing is a controversial yet popular tactic among some budget-conscious flyers. It involves booking a flight with a layover at the passenger’s actual destination and not completing the remaining segment of the journey, thus avoiding higher direct flight costs.
For example, a flight from Charleston, S.C., to Dallas-Fort Worth might be cheaper if booked all the way to New Orleans but disembarking in Dallas. The practice, while financially savvy for consumers, is frowned upon by airlines and not supported by typical ticket agreements with official travel partners like Expedia and Orbitz.
Throughout the trial, Skiplagged’s representation argued that American was still profiting from the tickets sold, even if they weren’t at the desired prices. They pointed out that the airline was not losing out entirely since the initial segments of these trips were still being utilized by the passengers.
Skiplagged, which charges a fee for facilitating such bookings, emphasizes on its website that while airlines despise this practice for financial reasons, it remains a viable option for cost-saving. It openly states, “Airlines don’t like when you miss flights to save money so don’t do this often,” and promotes itself as showing flights that “airlines don’t want you to see.”
The attorney for American, Paul Yetter, argued that Skiplagged had misled its customers into believing they were dealing with an authorized agent of the airline, leveraging its trademarks without permission. This misuse, according to Yetter, not only impacted American’s intellectual property but also its brand integrity.
Contrarily, William Kirkman, representing Skiplagged, mounted a robust defense stating that there was clear disclaiming of any official partnership with American or other airlines, thus challenging the basis of the copyright claims.
While the court’s decision represents a significant victory for American in terms of copyright infringement, the broader implications hint at ongoing industry challenges with balancing consumer search for value against airline revenue models and contractual terms with authorized partners.
This case underscores the complex dynamic between innovative online booking strategies and traditional airline revenue practices, setting a precedent for how similar disputes might be navigated in the future. The jury’s decision, particularly regarding Skiplagged’s usage of American Airlines’ copyrighted material, marks an important step for the airline in protecting its business interests while adapting to the evolving marketplace.