How do airline passengers play the ‘tariff abuse’ system?

Lufthansa is cracking down on the practice of travellers using “throwaway” tickets to circumvent high fares. The German national airline is suing a passenger for the difference between the fare paid and the amount due for the journey actually made.

The case sheds light on this and other forms of “tariff abuse” by passengers – and the risks that travellers take. 

What is the Lufthansa case about?

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A passenger bought a business-class return ticket from Oslo via Frankfurt to Seattle for around £600. He flew Oslo-Frankfurt-Seattle-Frankfurt but failed to board the final leg back to the Norwegian capital. Lufthansa calculated that he should have paid around four times as much for the itinerary he actually flew.

The airline is not relentlessly pursuing an individual passenger, but rather seeking to establish in law what is a long-established contract term and to dissuade other travellers from using the same trick. 

At the heart of the issue is the fact that the fare from A to B is often higher than the fare A to B to C. So in a test booking I made, Air France would sell me a ticket from Moscow to Paris to Heathrow for only £72, but were I going only from Moscow to Paris then the fare was three times higher. Some Paris-bound travellers will buy a ticket to London and fly with hand-luggage only to save £145 on the flight, with no intention of going beyond Charles de Gaulle airport.

Good question. To understand, you need to think of the issue from the airline’s point of view. On a typical London-New York plane seating 300 passengers, the airline might know from past experience that it can sell 200 tickets at a premium price to people who simply want the end-to-end journey. Therefore it must look beyond the London-New York market to tempt other travellers.

But a traveller will fly from Dublin, Paris or Frankfurt to New York via Heathrow if it is worth their while – in other words there’s a cheaper deal than they can buy non-stop. So it is rational for the airline to price a longer, two-stage journey lower than a non-stop trip.

But what’s to stop passengers who are “in the know” from taking advantage?

Plenty. Anyone who buys a Dublin-Heathrow-New York ticket but tries to start the journey at Heathrow will be told the whole itinerary is void because they were a no-show in the Irish capital.

Travellers who know this will generally work things differently, typically missing out the last leg of their itinerary. They travel with hand-luggage only; otherwise their baggage would be transferred to the onward flight.

Every “network” airline has a condition of carriage insisting that you must stick to the booked itinerary or face financial consequences.

British Airways says: “Where you change your travel without our agreement and the price for the resulting transportation you intend to undertake is greater than the price originally paid, you will be requested to pay the difference in price.” This could amount to hundreds or even thousands of pounds.

In practice, however, this rarely happens: the Lufthansa case is an exception. The German carrier is seeking to establish the legal principle and is thought likely to step up its actions against travellers where it suspects tariff abuse.

What sanctions do the airlines have?

The easiest is to monitor the behaviour of members of the frequent-flyer club and withdraw privileges from “tariff abusers”. Airlines have proved reluctant to do so, presumably because they don’t want to upset men and women who are still regarded as valuable customers despite their misbehaviour. 

In strict terms of commercial law it appears that the airlines are perfectly entitled to reclaim the difference between the fare paid and what is due. But in the rare event that such cases come to court, judges are sometimes inclined to side with the passenger.

United Airlines lost a court case in the US against a website, skiplagged.com, which aims to make it easy to find trips on which tariff abuse is worthwhile.

Surely this is just like “split tickets” on a train?

No. The practice of buying two rail tickets, eg Liverpool-Preston and Preston-Edinburgh to cover a single journey between Liverpool and Edinburgh, involves legally exploiting flaws in the fares system. The only test to satisfy is that the train stops or a change is made at the intermediary station.

In contrast, tariff abuse involves systematic exploitation of rational price differences offered by airlines, and breaks the rules.

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