The determinants of hidden-city ticketing: Competition, hub-and-spoke networks, and advance-purchase requirements

We offer a comprehensive empirical study on hidden-city ticketing (HCT), a pricing phenomenon in the airline industry that occurs when the fare for a nonstop trip from A to B is more expensive than a connecting trip from A to B and B to C. Exploiting a unique panel of over 473 thousand fares for flights departing between October 1st, 2019 and December 31st, 2019, we find that HCT depends on route competition (both on A-B and A-C routes), largely occurs in the last week to departure, is less likely when airport C is a hub, and primarily occurs on carriers that operate large hub-and-spoke networks (e.g., American, Delta, and United).