If you ever needed definitive proof that the glory days of air travel are well and truly behind us, look no further than American Airlinesโ AAirpass program โ which has recently been enjoying a renewed sense of attention thanks to billionaire Shark Tank investor Mark Cuban.
Launched in 1981 as a means of raising capital while interest rates were sky high, for the relatively reasonable one-time price of $250,000, pass holders were granted unlimited first-class travel on any of the prolific carrierโs flights worldwide while still earning frequent flyer miles; with companion passes available for just another $150,000.
But little did they know, what Cuban himself famously called one of the greatest purchases he ever made, would eventually backfire in a big way.
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โAs usual, the public is way smarter than any corporation,โ former American Airlines president Robert Crandall told The Hustle.
โPeople immediately figured out weโd made a mistake pricing-wise.โ
While the AAirpass did attract an elite class of clientele exactly as intended โ ranging from businessmen like the aforementioned Mark Cuban, and computing don Michael Dell; to baseball great Willie Mays, and Americaโs Cup winner Dennis Conner โ what American Airlines hadnโt anticipated was the millions theyโd lose from motivated consumers in the ensuing years.
One pass holder booked 16 round trips to London in just 25 days, racking up an estimated total of $125,000. Another boarded 373 flights in a single year, amounting to approximately 1.46 million miles or $2.4 million.
Then thereโs the matter of Steven Rothstein, who recorded a staggering 10,000 first-class flights across 25 years including:
- 1,000 flights to New York City
- 500 flights to San Francisco
- 500 flights to Los Angeles
- 500 flights to London
- 120 flights to Tokyo
- 80 flights to Paris
- 80 flights to Sydney
- 50 flights to Hong Kong
- and roughly 7,000 flights to the rest of the world
Heโd even catch a flight from Chicago, where the financier was based, to Ontario just to smash a sandwich at his favourite restaurant.
Rothstein, alongside marketing exec Jacques E. Vroom incurred estimated annual costs of over $1 million.
In 2008, Steven Rothstein checked in at Chicago OโHare International Airport with a mate when American Airlines hand-delivered a letter to inform him that his AAirpass had been terminated due to โfraudulent behaviour.โ
Apparently, the boardroom suits werenโt exactly cool about his history of approaching passengers at the gate and offering them his companion seat in exchange for cash; nor his habit of using the companion pass to purchase adjacent seats under a fake name for a bit of privacy or extra carry-on luggage (the man not-so-subtly used the alias โBag Rothsteinโ for such occasions).
Rothstein would sue over the membership termination (you can read about the fascinating saga penned by his daughter via The Guardian); as would Vroom when his unlimited flight privileges were similarly revoked. Both were unsuccessful in their campaign to reinstate what they deemed to be a broken contract in the face of the airlinesโ โbazillion lawyers.โ
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โThey used the word โunlimitedโ and โlifetimeโ and then, the motherf***ers took it all away,โ said Jacques E. Vroom Jr.
To cauterize the financial wound, the cost of an American Airlines AAirpass was gradually increased. The $250,000 price tag was bumped up to $600,000 in 1990 and $1.01 million in 1993 before it was officially axed the following year.
That was with the exception of a one-time offer featured in the 2004 Neiman Marcus Christmas catalogue: $3 million for the AAirpass, and $2 million for a companion pass. Nobody ponied up.
In total, American Airlines sold 66 AAirpasses with unlimited travel conditions.
NOTE: ALL $$$ = USD (not adjusted for inflation)
