[nneonneo]

I don’t even think it’s a “wealthier clientele” thing.

Some routes are literally subsidized - for example, the Essential Air Service program pays airlines to run flights to places that would otherwise be unprofitable to fly to, and due to the grants the airlines can offer the complete route for (relatively) cheap. So, for example, it might be expensive to fly New York to Chicago, but subsidized (and cheaper) to fly New York to Podunk via Chicago. But if lots of travelers catch wind of this, and pretend to go to Podunk only to get off at Chicago, then the air carrier doesn’t get their subsidy.

[lastofthemojito]

That's an interesting hypothesis, but at least in my experience the flights where skiplagging has been viable have always been between 2 major airports, with a flight to a third major airport as the skipped leg. Looking at some examples on skiplagged.com right now, I see flights where BWI->LAX is cheaper if you book BWI->LAX->SFO but skip the LAX->SFO leg. Same with BWI->CLT by booking BWI->CLT->NAS. But those LA to SF or Charlotte to Nassau legs aren't subsidized flights to East Podunk.

Essential Air Service flights might sometimes play a role here but from what I've seen I think the thing that creates opportunities for skiplagging is just typical airline revenue management doing it's inscrutable magic setting prices between 2 cities without any concern for the prices of the individual legs.

[hakfoo]

I think due to the "nobody would run it without subsidy" nature of the Essential Air Service subsidies, the airlines themselves often pawn it off to a regional carrier wearing their skin under license (American Eagle, Delta Express, sort of thing). The traffic usually is only enough to justify a puddle-jumper that's not their core fleet or operational competency anyway.

[sdwr]

Don't airlines have to pay for and/or actively use slots at some major airports? So New York to Chicago is a "mandatory" flight for the airline, but Chicago to Podunk is scheduled based on demand.

[jmward01]

The missing point in your argument though is that the people doing this didn't want to go to the destination. So if this wasn't an option, getting off before the subsidized destination, they wouldn't be flying anyway and the airline still wouldn't be getting the subsidy.

I'm still not seeing any real answer how this practice can exist in a true free market and how it doesn't indicate collusion in the airline industry.

[teo_zero]

In the A->B->C example, probably the subsidy they get for B->C is so much higher than its real cost that they can use such "profit" to finance part of the first leg. If you skip the final leg, you risk spoiling their scheme to extract more-than-needed money from the government.

[hunter2_]

Even if the subsidy for B->C is not higher than the real cost at all... if they set their A->B->C ticket prices such that (revenues == expenses), and a skipped leg results in any hit to revenue (i.e. losing a subsidy of amount x) along with a reduction in expenses (i.e. less weight means less fuel of amount y), then they are going to take a loss any time x>y.

[teo_zero]

Sorry, how is this different from what I said? The condition x>y, with x the subsidy and y the expense, is exactly what I intended with "subsidy they get [is] higher than its real cost".

[hunter2_]

Oh, I interpreted your "its real cost" as everything that goes into the service (i.e. everything the airline does to hold up their end of the deal, which goes well beyond fuel) whereas in my version I'm defining y far more narrowly: the fuel needed to haul the weight of the person.

The subsidy could easily exceed the fuel, which means losing the subsidy despite saving on fuel is something the airline legitimately wants to avoid. They won't be in a worse position than if the seat went unsold, but it'll be worse than if they had a flying passenger.