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?
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It’s not about how much it costs to operate, but how much the airline thinks travelers are willing to pay.
Tickets to/from a major city/hub airport, for example, may be more demanded for business travelers, while a connecting flight onward to a costal city, might only be attractive to leisure travelers. The airline might assume the former could earn a higher price, while the latter might have more competition from other carriers and/or targets price conscious travelers.
You are looking at the airlines expenses, this is important but only sets the lower limit to what an airline can charge for the ticket. In addition to the expenses an airline also adds their profits to the ticket. And how much profit they can make and still sell the ticket depends on the route. For example if the airline is the only one with a direct flight from A to B then people are usually willing to pay more for this ticket. However if another airline flies directly from A to C then people are only willing to fly A-B-C if this is significantly cheaper. So the airline is going to reduce its profit on these tickets to get people to buy them. They might then reduce their profits so much that it is cheaper to fly A-B-C then to fly just A-B.
You’re assuming the price of an airline ticket is directly tied to the cost of operation. If B is a high demand destination, the airline will charge more just because that’s where people want to go, good old fashioned supply and demand.
Skiplagging works on the principle that planes are more economical to fly when full. Airlines will route travelers in a variety of possible patterns in order to put the most dollars in each plane, even if the actual ticket price is cheaper. It makes more sense for them to take a slight hit on a few passengers on that A-B flight than to run a whole plane A-C, because the plane’s going A-B anyway.
The key point is that the price of anything is not set by the cost to provide that thing, but the amount people are willing to pay for that thing. If an airline has a bunch of planes flying a bunch of routes, it prices the seats on them in order to get the maximum amount of revenue. It doesn’t suddenly decide “oh wait, that route is shorter so uses less fuel so we’ll discount it, even though people are still buying tickets at the higher price”.
Imagine you have made a bunch of lemonade and filled up your fridge with it, in anticipation of a hot day. At one end of your street, which is like a mile long, there is a big construction project with workers constantly going on and off break, and at the other there is a funfair with a bunch of families. You set up a stand at each end of your street, and pay some of your young cousins 10 cents a glass to man each stand and sell it. You pay another cousin to skate jugs of lemonade from your fridge to the stands, but he asks for 5 cents a glass to take it to the funfair end, and 10 cents to take it to the construction site end as it’s further away. It also cost you 10 cents a glass in ingredients, plastic cups and fridge electricity – so the cost to sell a glass at the funfair end is 25 cents, and at the construction site end it’s 30 cents. You need to sell all your lemonade today because you’re about to leave on vacation for a week, and there’s only room for one stand at each end of the street. How do you price your lemonade?
The answer is: you see what people will pay for it. You can entice a steady but not overwhelming stream of construction workers over to your stand – just enough to keep your cousins moderately busy – by pricing it at 40 cents a glass. However, when you make it 40 cents a glass at the funfair end you get mobbed by kids demanding their parents get them a glass, so you decide to raise the price to 60 cents, which reduces the pressure a little bit. Even though it’s easier for you to provide it there, that’s an irrelevance, as people are willing to pay more.
Good to know the term. greyhound, back in the day was the same. Buy a ticket to Toronto, get off wherever you needed to before that.
Competition.
People will pay more for nonstop flights. So airlines have to offer an incentive to take a connecting flight, by making multiple flights cheaper.
Eg flying Dallas to Paris you can fly Air France or American. But if you take a connection you can fly Delta, United, Lufthansa, British Airways, Air Canada, Turkish, etc.
The question has pretty much been answered here, but basically is supply and demand and the effects of the airline hub and spoke model.
That said, it’s worth making sure OP and other readers know that there a many risks with skiplagging. First, it’s against the terms and conditions you agree to when you purchase a ticket. Technically the airline can cancel your ticket and suspend your frequent flyer account if they catch you. Second, you can’t check a bag because that will go all the way to the final destination on the ticket. Third, and most importantly, if there’s any changes, delays, or cancellations, the airline has zero obligation to route you through the airport you intend to leave at. Let’s say you want to fly Delta airlines from Cincinnati (CVG) to Minneapolis (MSP) and “skiplag” by purchasing a ticket to Seattle (SEA) with no intention of flying the Seattle segment. Then the first flight from CVG gets cancelled because of bad weather in MSP so Delta re-routes you through Atlanta. They have zero obligation to get you to MSP and if you brought that up with the customer service agent, they would just as likely cancel your ticket. For this reason, it’s almost never worth the risk.
The prices are based on a complex computer algorithm, but primarily due to supply/ demand and historical prices.
Meaning that if it cost $100 of her fuel to go A to B, but the demand is low, the algorithm will price it below $100 thereby making the airline to take a loss.
So it just works out that the cost works in your favor for skiplagging. The algorithm doesn’t fully account for it. But airlines do have policies against it, it’s their “bandaid” fix instead of paying millions to update the cost algorithm.
Imagine if Airline X has a direct flight from City A to City C and charges a certain amount.
But Airline Y, can only get you from A to C by connecting thru B
Would you pay the same amount as a direct flight? No, you’d probably want to pay less for the inconvenience and extra time of the flight stopping at city B.
So the Skiplagging opportunity exists because Airline B is having to offer a lower fare to compete for passengers going from A to C, but you win since you only want to go to B
Direct flights always seem to price higher than flights with connections
What about your luggage? You get off at B but it’s gone on to C? Or do you just take carry on and have no checked in bags?
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