Orbitz Settles 'Hidden Cities' Lawsuit With Cheap Flight Site Skiplagged.com

(RTTNews) - Orbitz Worldwide, Inc. (OWW) has agreed to settle its lawsuit with Skiplagged.com, a New York-based startup that helps travelers book cheap flight tickets by exploiting a loophole called 'hidden city' ticketing.

The settlement agreement removes Orbitz Worldwide from the litigation it jointly filed with United Airlines Inc. against Skiplagged on November 17, 2014 relating to Skiplagged's publication of airline hidden-city price and route information.

However, litigation by United Airlines against Skiplagged is said to be still active. United Airlines is a subsidiary of United Continental Holdings (UAL).

Skiplagged, founded by 22-year-old Aktarer Zaman, is an airfare search engine that enables travelers to book cheap flight tickets by using so-called 'hidden city' fares, a travel arrangement where the passenger's intended final destination is not the final arrival city on his or her itinerary, but rather an intermediate or connecting city.

Using this strategy, travelers book one-way tickets on flights with multiple stops ahead of their actual destination and then deplane before the flights reach the booked final destination. Such flights with stopovers can be cheaper than direct flights to the same destination.

Orbitz and United Airlines had filed the lawsuit against Zaman to discontinue his travel website. The companies had accused Zaman of "intentionally and maliciously" using Skiplagged.com to damage their businesses and of "promoting prohibited forms of travel."

Orbitz joined in the litigation after Skiplagged declined a request to disable hidden-city booking links to Orbitz, which according to Orbitz posed contractual risks for the company relating to supplier agreements with certain airlines and infringed Orbitz' trademarks.

Under the terms of the settlement agreement announced on Monday, Skiplagged will not redirect traffic to Orbitz.com and other Orbitz Worldwide websites.

Skiplagged also agreed not to use Orbitz Worldwide brands, logos, trademarks, images or other copyrighted materials on the Skiplagged website or mobile apps. Neither party admitted wrongdoing.

OWW is trading at $8.99, up $0.24 or 2.74 percent on a volume of 195,468 shares.