The year was 1981. American Airlines wasn't doing well financially, and taking on debt was expensive due to interest rates. In an attempt to get large revenue quickly, the airline activated the AAirpass program, which granted unlimited lifetime travel and unrestricted access to the VIP lounges of the Admirals Club, at a fixed price of $250,000. However, the shot backfired. Besides selling a very low number of passes, some users squeezed to the maximum the availability of free flights, causing millions of dollars in expenses...
According to Bob Crandall, CEO and president of American Airlines between 1985 and 1998, the original idea was that AAirpass would become a gift that many firms and companies would give to their most valuable employees. After all, if someone makes you millions of dollars a year, say, investing $250,000 to recognize their work and have them fly free for life doesn't sound so absurd.
Another interesting detail is that American decided to enable the purchase of a secondary pass that brought the same benefits among existing AAirpass owners, with a significant discount. In other words, for the total sum of $400,000 (250 for the initial payment, and another 150 for the extra pass), two people could travel the world and be treated like royalty in the process.
American decided to stop general sales of AAirpass in 1994, after having raised its price to $600,000 in 1990, and to $1.01 million in 1993. The only exception was in 2004, when it offered a pass through the Neiman Marcus Christmas catalog, with a price of $3 million, and $2 million for the secondary pass (nobody bought it).
The total number of AAirpass sold amounted to 66, far below original expectations, but it only took a couple of travelers to prove that the entire program had blown up in American's face. The first is Steve Rothstein, who bought his AAirpass in October 1987.
Over a period of twenty years, Rothstein made thousands of flights to New York, London, Paris, Tokyo, San Francisco and Los Angeles, accumulating millions of miles. He flew to Ontario just for a sandwich, on more than one occasion gave his second ticket to strangers he met at airports, and even reserved two seats next to each other to have more personal space.
The other is Jacques E. Vroom, who paid more than $350,000 for the complete package in December 1989. Vroom accumulated nearly 40 million miles, went to all of his son's football games in Maine, gave away several tickets for free to sick people, and others he simply sold.
In 2007, American ordered an "integrity team" to investigate AAirpass users, with special emphasis on these two super travelers, to determine how big the expense was. Between taxes, miles, lost seats and other extras, the conclusion was that Rothstein and Vroom were costing American more than one million dollars each per year.
Under alleged accusations of "fraudulent behavior," American Airlines canceled both passes in 2008. Rothstein and Vroom sued the airline, and apparently Rothstein reached a settlement in late 2012, although Vroom didn't have that luck, probably due to the resale of tickets. American did not hesitate to void other passes that recorded excessive use, but the rest remain valid.
