A federal jury in Fort Worth awarded American Airlines $9.4 million Tuesday in the airline’s suit against Skiplagged Inc., a website that promotes bargain fares through “hidden city” ticketing, a practice that saves many fliers money but, American contends, costs airlines millions in uncaptured revenue.
Jurors in the court of U.S. District Judge Mark T. Pittman ordered Skiplagged to pay American $4.7 million in actual damages for copyright infringement; and $4.7 million in disgorgement of “ill-gotten” revenues derived from Skiplagged’s misconduct.
That’s about half of what one of American’s attorneys, Paul Yetter of Yetter Coleman in Houston, asked the jury to award the airline in his closing argument last Friday. In addition to its copyright claim, the airline’s suit sought damages for trademark infringement. The jury Tuesday awarded no damages on the trademark claim.
William Kirkman of Fort Worth, one of Skiplagged’s attorneys, said, “We are very pleased with the jury’s decision on the trademark claim asserted by AA, as that is the claim that dominated the trial. As to the copyright damages, there are additional phases of the trial that need to take place before a final determination can be made.”
A spokesperson for American called the verdict “an important next step in protecting American’s intellectual property and valuable brand.”
Hidden city ticketing, also known as “skiplagging,” lets a traveler save money in some instances by booking an inexpensive flight to someplace, anyplace, with a layover in the traveler’s true (but hidden) destination, to which a ticket would have cost more. The traveler then exits at the layover airport and skips the remaining connecting flight or flights.
For example, a basic economy flight from Charleston, S.C., to DFW International on a weekday in early November costs $159 on American. A skiplagging traveler could make the same trip by purchasing a $99 ticket (also basic economy on American) from Charleston to New Orleans, with a layover at D/FW. The traveler deplanes and doesn’t replane for the New Orleans leg of the trip. Au revoir Crescent City, howdy 60 bucks.
Yetter said Skiplagged misleads its customers into thinking the site is an authorized ticketing agent for the airline, in part through its use of American’s name and logo.
“No one would buy a ticket on a website if they didn’t think the website was authorized to sell tickets,” he told the jury.
American’s written agreements with authorized travel sites, such as Expedia, Orbitz, Travelocity and Priceline, prohibit the booking of hidden city tickets.
Kirkman, Skiplagged’s lawyer, told the jury American didn’t deserve a penny. He said warnings on the site, including one that says, “Airlines don’t like when you miss flights to save money so don’t do this often,” and a promotional message boasting, “We show you flights the airlines don’t want you to see,” make it clear that Skiplagged is not, and doesn’t hold itself out as, an authorized business partner of American or any other airline.
Skiplagged collects a service fee from customers who book hidden city flights through its site, and those fees have brought the small company millions of dollars in revenue.
At the same time, Kirkman noted, American is selling those customers tickets — albeit not for as much as the airline might like — and has made “hundreds of millions” of dollars off tickets booked through Skiplagged. He told the jury the airline wants to take the money Skiplagged has saved its customers and “put it in their pockets.”
In addition to Yetter, American Airlines is represented by, among others, Dee J. Kelly Jr. and Lars L. Berg of Kelly Hart in Fort Worth; and Bina B. Palnitkar of Greenberg Traurig in Dallas.
Skiplagged’s lawyers, in addition to Kirkman, include Aaron Z. Tobin of Condon Tobin Sladek Thornton Nerenberg in Dallas; and Darin M. Klemchuk of Dallas.
The case number in the Northern District of Texas is 4:23-cv-00860.