12/30/2014 12:49 EST | Updated 03/01/2015 05:59 EST

United Airlines, Orbitz sue Skiplagged over layover price loophole

A large U.S. airline and one of the world's biggest online travel agencies are suing an entrepreneur from New York City for developing a web system that can help flyers save money by taking advantage of a loophole in the pricing of flights with layovers.

Aktarer Zaman invented, a website that lets users find cheaper flight tickets.

The website's trick is that it combs ticket prices and finds flight routes with layovers that stop in certain cities that end up being cheaper than simply directly flying to that city.

If a traveller wants to fly from New York City to Atlanta, for example, a direct flight would cost a certain amount of money. However, because of the way airlines price their tickets, a flight from New York to Miami that includes a layover in Atlanta might cost less than the New York-to-Atlanta trip.

Under the system, that flyer could book the flight to Miami knowing that it passes through Atlanta, and simply get off the plane there and not complete the last leg — while saving money in the process.

Airlines often offer cheaper flight to certain regional hub airports with high traffic volumes, as opposed to more niche destinations where anyone wanting to go there will often pay a premium to do so. 

On a Reddit thread explaining how the website works, Zaman says he stumbled upon the loophole by accident. "It was simply an accidental discovery while searching for flights from NYC to [Seattle]," he said. "I noticed the cheapest had a layover in [San Francisco] but the cheapest for NYC to [San Francisco] was significantly more expensive."

'Hidden city' flying costing airlines, lawsuit says

Zaman says the cheapest flight his website has ever been able to find was $25.62 for a flight from Seattle to Orlando. The trick only works if you're travelling without any checked bags (because luggage would end up in your final destination) and it also doesn't work for return trips — if you fail to show up for a leg of the trip, the airline will cancel your return flight, which means you'd have to book two separate one-way tickets.

It's known in the industry as "hidden city" flying and is costing the airlines a lot of money, the lawsuit alleges. "intentionally and maliciously interferes" with their business and so the companies are seeking a legal end to the practices.

The statement of claim alleges "Zaman’s acts interfere with and jeopardize Orbitz Worldwide’s travel agency agreements with major airlines, from which Orbitz Worldwide earns well in excess of $75,000 in revenue annually."

Zaman says he has made no money from the website, but has already raised $15,000 from donations to aid in his legal defence.

"What Skiplagged does is definitely not illegal, which is why this is not a criminal case," Zaman said.

The case is United Airlines Inc. v. Zaman, docket number 14-cv-9214, and is being heard in the U.S. District Court for the Northern District of Illinois.