Airlines often introduce perks for regular travellers, allowing them to gather points for their future trips.
Sometimes, these things aren’t properly though through, allowing people to massively take advantage of them.
In 1981, American Airlines introduced a travel perk for customers that would come back to bite the aviation giant.
The “AAirpass,” which allowed unlimited first-class travel for life, seemed like a great idea.
For a one-time fee of $250,000, customers could fly first class as often as they wanted. While it attracted a few customers, one man’s use of the pass cost the airline millions.
$250,000 in 1981 is more than $860,000 dollars in 2024, so the perk was really only available to those with deep pockets.
However, it was very well-used by one man.
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A Lifetime of Free Flights
Steve Rothstein, a successful investment banker, bought his AAirpass in 1987.
On top of that, he added a companion pass for an extra $150,000, allowing him to bring a guest along on any flight.
Rothstein made the most of his purchase, booking flights almost daily.
Whether it was for work, vacations, or simply to help others, he flew frequently, sometimes scheduling more than 10 flights in a single day.
Some of the things Rothstein did with the pass included:
- Booking flights for friends, family, and even strangers.
- Reserving empty seats just in case he wanted to bring someone.
- Canceling flights at the last minute.
Over the years, his use of the pass cost American Airlines millions of dollars.
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The Airline Pushes Back
Rothstein had his pass for a surprisingly long time – 27 years in fact. This was in spite of the company stopping any new passes in the early 1990s.
By 2008, American Airlines was struggling financially. The company started looking into AAirpass holders, and Rothstein’s heavy use quickly caught their attention.
The company claimed he had violated the terms of the pass by booking unnamed companion seats, canceling flights, and using the pass in ways that weren’t intended.
American Airlines revoked his pass, accusing him of fraud and misuse of the program.
Rothstein, however, insisted that he was simply using the pass as it was intended.
Of course, it ended up in court, with Rothstein suing in 2011 for breach of contract, but the court sided with American Airlines.
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Key Takeaways from the AAirpass Fiasco
- Financial strain on the airline: Rothstein’s frequent flying added up to millions in lost revenue for American Airlines.
- Customer loyalty gone wrong: The AAirpass, designed to reward loyal customers, turned into a financial burden when some used it excessively.
- Legal action and its aftermath: Rothstein’s lawsuit highlighted the challenges of offering unlimited perks in loyalty programs.
This story serves as a reminder that even the most attractive perks can lead to unexpected consequences for businesses.
