Skiplagging. How is it ever cheaper to go from point A-B-C than it would be to go A-B?

Question

I understand that skiplagging is finding a flight that is cheaper to go from point A, to B, with a planned trip to C, but just leaving the airport at B.

I don’t understand the basic concept of how this happens though. How is a flight from A-B-C, ever cheaper than a flight just A-B? The extra cost of the C leg would have to be entirely absorbed by the savings from A-B, how is that possible?

In: 23

Answer 1

Company 1 offers A-C direct. In order compete and not add a direct route, company 2 will sell you A-B-C at subsidized rate that’s competitive to company 1.