I don't understand the airline's argument that they couldn't resell the seat. Of course not, it was already paid for! Can someone make sense of their argument for me, as it seems prima facia illegitimate.
The price for a given multi-leg trip is sometimes discounted by Some Amount from the actual price you would pay buying each leg individually.
This is exploitable by purchasing a discounted fare with (H) hops at price P(H) in order to fly (H-X) hops, where X > 0 and P(H-X) > P(H). I offer no speculation as to their motivations in selling a ticket where P(H-X) > P(H) but I certainly don’t think kind thoughts towards them for the outcomes it creates in airline pricing.
Their complaint against consumers is, in summary, “we could have charged a higher price P(H-X) for the seat that was left empty if the customer had not exploited this P(H) loophole in our pricing, and we deserve to be paid that difference.” This is not strictly relevant to the lawsuit, which is against an agency rather than a consumer, but helps explain their motivations for prosecuting an agency site for exploiting it.
Their complaint against the third party website is both different and more nuanced, but ultimately stems from a site making it trivial for consumers to find and exploit this loophole without domain-specific knowledge known primarily to travel agents and hobbyists. Thus their extreme focus on trademark; if they had succeeded in that claim, they would potentially be able to weaponize the judgment against any site that doesn’t pay them a bribe for showing their logo in association with interpretations of flight pricing data, which would let them harvest millions of dollars of new passive revenue streams; as well as having the option to terminate the existence of any site they dislike that shows their logo or brand. Their trademark claim was denied in full.
The airlines are within their legal rights to cancel tickets and refuse business from customers who exploit this loophole, so long as they do so indiscriminately with respect to the protected characteristics of the individuals refused.
There are no regulations requiring simple coherent pricing where leg+leg+leg = multi-leg fares, either, which is why ITA Software’s Matrix and its ability to resolve traveling salesman pricing problems across the fare code hellscape was worth a billion of dollars to Google.