American Airlines files lawsuit against Skiplagged

American Airlines is suing the travel booking platform Skiplagged, claiming the site is "deceptive."

The suit, filed last week in Texas federal court, alleges Skiplagged, Inc. engages in conduct that "is deceptive and abusive," by claiming to issue valid tickets with American despite not having the right to sell them.

"Skiplagged deceives the public into believing that, even though it has no authority to form and issue a contract on American's behalf, somehow it can still issue a completely valid ticket. It cannot," the lawsuit claims. "Every 'ticket' issued by Skiplagged is at risk of being invalidated."

Skiplagged.com, launched in 2013, utilizes the practice of "skiplagging" or "hidden-city fares" to save consumers money. Passengers can book a multi-stop journey but only complete a portion of the trip -- in other words, "skipping" the final destination they originally booked and exiting at a layover instead -- at times saving more than if they booked a direct flight.

The practice, while not illegal, often violates airline's Contracts of Carriage and can result in bans from traveling with a carrier.

"Skiplagged's business is based on the appearance of saving customers money by advertising that it provides cheaper fares than customers would get by booking directly with AA.com," American Airline's suit argues. "In doing so, Skiplagged misrepresents fare, schedule and inventory information from AA.com as higher than those offered by Skiplagged, yet consistently ends up charging the customer more than they would pay on AA.com."

When asked for comment on the lawsuit, a Skiplagged representative said the company is "proud to stand on the side of the traveler and continue the fight against American Airlines and their monopolistic pricing."

"Skiplagged emerged as a result of American Airlines taking advantage of US citizens and the American taxpayer. The result of Skiplagging is that travelers have been able to put extra money in their pockets instead of the pockets of American Airlines executives and shareholders," a Skiplagged representative said in a statement. "Skiplagged wishes American Airlines was more concerned with finding a way to reduce their reliance on these monopolistic fares."

American Airlines said in a statement that the practice of "hidden city ticketing" is prohibited by the carrier.

"If a customer knowingly or unknowingly purchases a ticket and doesn't fly all of the segments in their itinerary, it can lead to operational issues with checked bags and prevent other customers from booking a seat when they may have an urgent need to travel," the airline said. "Intentionally creating an empty seat that could have been used by another customer or team member is an all-around bad outcome."