This is very big in the USA where a ticket from New York to Hick Town via Atlanta is cheaper than New York to Atlanta on its own. Only works if checked in baggage isn't involved and your frequent flyer number can't be used. Certain hacks such as different addresses and name variations can help avoid flagging up in the system, as can using different prepaid credit cards to purchase tickets.
Passports aren't required for domestic flights in the US so a variety of acceptable IDs can be used instead.