About JHexagon

May 13th, 2016

Hidden City Ploy Audit

HIDDEN CITY AUDIT:

Hidden city ticketing occurs when a passenger books an itinerary with multiple segments and purposely does not utilize last segment. For example, if passenger’s itinerary originates at the point “A” with a connection at the destination “B” and final point “C” but never intending to make the last segment of the flight. Passenger purchases the ticket with A-B-C itinerary because it is cheaper ($800) than a ticket with A-B itinerary ($1,000). Another example is when passenger buys round-trip ticket but utilizes only one coupon. This practice results in a lower price of the ticket as well since round trip ticket cost less than one way ticket.

Airline ticket is a contract between passenger and the carrier to receive transportation between locations at specified price and to utilize ticket exactly as issued. Hence, the airline view hidden city opportunity, failure to utilize ticket exactly as issued, as a possible breach of contract for which the airlines can demand compensation.

Airline profits depends on its ability to maximize ticket revenues, and similar services from other airlines is a main factor in determining the price of the ticket. Carriers oppose hidden city unethical practice for financial reasons: lost revenue and increased expenses.

We developed a new algorithm to detect tickets with hidden city malpractice. As a result, we recovered a quarter of a million dollars to the airline, and this unethical practice significantly decreased.

Posted by: Yana Nibelitsky

Reference: http://www.gao.gov/new.items/d01831.pdf