Hidden City Ticketing Report

This report examines the practice of 'hidden city ticketing,' where passengers book flights with connecting points but disembark at an intermediate stop to exploit cheaper fares. The report details how this practice undermines airline pricing strategies, as airlines price based on demand rather than distance. While initially a minor issue, the rise of websites facilitating hidden city ticketing has created a significant problem for airlines, particularly those with complex route networks. The report explores the economic reasons behind this pricing discrepancy, highlighting how airlines sometimes strategically offer discounts to fill seats and maintain profitability. The consequences for both passengers and airlines are discussed, including potential flight delays, re-routing issues, and the risk of stranded passengers. The report also notes geographical variations in the prevalence and risk associated with hidden city ticketing, with the US presenting more opportunities and Canada having stricter regulations. Overall, the report concludes that while passengers may benefit from lower fares, the practice carries significant risks and negatively impacts the stability of the aviation industry.

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When the passenger disembarks the flight indirectly at the node of the connection, then it gives
rise to the hidden city ticketing. Fares of the flight are related to the forces of the market and
doesn’t correlate to the distance every time. For example, the flight between the point A and C,
the node of the connection is B, may be cheaper than the flights between A and B. Then it is
required to purchase a ticket from A to C which disembarks the node of the connection i.e. B and
the remaining segment is further discarded i.e. B to C.
The airline companies don't allow hidden city ticketing to the customers because the airlines
don't price depending on the cost whereas, they price depending on the demand. And the
customers pay for the convenience of a nonstop flight through a connection node. The companies
don't allow the hidden city ticketing because some of the passengers take advantage of it and it
upsets the overall balance in the aviation industry (Wang, Z., & Ye, Y. 2015). Therefore, the
passengers with high dollars become the passengers with low dollars and the generated revenue
of that airplane drops. Earlier, very few people were doing this, and this wasn't upsetting the
balance of the aviation industry but nowadays, websites are making it easy for the customers to
provide the option of hidden city ticketing and this is adversely impacting the aviation industry.
Further, it has become a real problem for the aviation industry . Therefore, it is not an issue for
the carriers of the low cost, but it has become an issue for the carriers which offers incredible
schedules in the various markets.
The economic reason for the existence of these types of tickets is that the pricing of the airfare is
very complicated and frequently an airline gets the choice of running various segments by
occurring loss as the airlines offer discounting seats or even the company occurs much bigger
loss even when to fly with the vacant seats with higher fares. The companies want to get the
planes on the same track like before and even in a profitable and sustainable competitive position

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on the routing map. Therefore, they provide heavy discounts only when they required to, and
further they balance it with the generated profits on the various routes that other airlines are not
bothering to work at all ("BBC - Homepage," 2016). So, the aviation industry provides the
hidden city ticketing depending on the condition or situation of the company. If the company is
in a sustainable position, they don't provide and not even allow hidden city ticketing, but if the
company is not able to generate desired profits and they have to fly with empty seats, then they
offer hidden city ticketing even at the discounted rates to the passengers.
The hidden city ticketing is impacting the passengers and the aviation industry as well. But the
passengers are the ones who get impacted adversely. The airlines use the hidden city ticketing
because they cannot sell the second portion of the flight at the distinct or separate ticket. The
companies only do this in order to generate profits. But we as the passengers doesn’t realize that
longer flights with the lower prices have suddenly become cheaper because the companies are
trying their best in order to compete with the carrier of the lower fare. And if there systems get
hacked then they suddenly stop providing hidden city ticketing. The hidden city ticketing makes
the flight delay because the gate agents make sure that everyone has boarded the plane and they
also cross check that the luggage is also loaded on the planes according to the routes. But, in case
any person is not able to board the plane then the gate agents tries to find him. And this delays
the future travel plans of the passengers because the flight gets delayed. Re-routed is the biggest
problem as it is not foolproof. A change in the location of the stopover will enforce the passenger
to buy a ticket for one-way in order to reach the desired destination and sometimes, the
passengers get room to wait for the night. The passengers should think about the extra $300
before considering the hidden city ticketing (Grannan et al., 2016).

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According to the researches ("U.S. Government Accountability Office (U.S. GAO)", 2016), the
Americans are the ones who get the advantage of the hidden city ticketing when they fly
domestically because there are various options for them to choose between the hubs and the
airlines. Whereas, in Canada using hidden city ticketing is very risky as they have strict norms
and policies and the airlines of the Canada rarely use the hidden city ticketing.

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REFERENCES
Hidden-city ticketing: The cause and impact. Transportation Science, 50(1), 288-305.
BBC - Homepage. (2016). Bbc.com. Retrieved 25 October 2016, from http://www.bbc.com/
Grannan, K., Mallon, T., Toobin, J., Cassidy, J., Pilon, M., & Ali, M. et al. (2016). The New
Yorker. The New Yorker. Retrieved 25 October 2016, from http://www.newyorker.com/
U.S. Government Accountability Office (U.S. GAO). (2016). Gao.gov. Retrieved 25 October
2016, from http://www.gao.gov/