AAirpass: American Airlines's all-you-can-eat lifetime first class ticket, and what became of it

The LA Times's Ken Bensinger tells the fascinating, dirty story of American Airlines's AAirpass, a too-good-to-be-true lifetime first-class-ticket-to-anywhere-anytime pass that the airline debuted in 1981 at $250,000 (the last one offered, in the 2004 Neiman-Marcus Christmas Catalog, was priced at $3,000,000, but none sold). Purchasers could also buy companion tickets they could use to fly anyone along with them.

The men who bought them -- the article only mentions men -- went a little bananas. They started flying everywhere, all the time. They'd pick random people out of the check-in line and give them free first-class upgrades. They'd fly to Japan for lunch and back to the States that night. One of them was costing the airline more than $1,000,000 a year.

The airline decided to get rid of them. They put private eyes and internal investigators on them. They sued. They extorted passengers who'd flown on companion tickets for confessions that they'd paid for the "gift," and froze their frequent flier accounts, saying they'd only restore them once the passengers fessed up. The ugly tale ends in limbo with the airline's Chapter 11 bankruptcy last year. But on the way, it has a lot of odd and colorful twists.

In July 2004, for example, Rothstein flew 18 times, visiting Nova Scotia, New York, Miami, London, Los Angeles, Maine, Denver and Fort Lauderdale, Fla., some of them several times over. The complexity of such itineraries would stump most travelers; happily for AAirpass holders, American provided elite agents able to solve the toughest booking puzzles.

They could help AAirpass customers make multiple reservations in case they missed a flight, or nab the last seat on the only plane leaving during a snowstorm. Some say agents even procured extra elbow room by booking an empty seat using a phony name on companion passes.

"I'd book it as Extra Lowe," said Peter Lowe, a motivational speaker from West Palm Beach, Fla. "They told me how to do it."

Vroom, a former mail-order catalog consultant, used his AAirpass to attend all his son's college football games in Maine. He built up so many frequent flier miles that he'd give them away, often to AIDS sufferers so they could visit family. Crew members knew him by name.

"There was one flight attendant, Pierre, who knew exactly what I wanted," Vroom said. "He'd bring me three salmon appetizers, no dessert and a glass of champagne, right after takeoff. I didn't even have to ask."

Creative uses seemed limitless. When bond broker Willard May of Round Rock, Texas, was forced into retirement after a run-in with federal securities regulators in the early 1990s, he turned to his trusty AAirpass to generate income. Using his companion ticket, he began shuttling a Dallas couple back and forth to Europe for $2,000 a month.

"For years, that was all the flying I did," said May, 81. "It's how I got the bills paid."

The frequent fliers who flew too much (via MeFi)

(Image: 67, a Creative Commons Attribution (2.0) image from cnewtoncom's photostream)



  1. Even though they’d paid for their ticket, this article should be useful if/when teleportation or folding of space/time makes travel instantaneous. We get a preview of what kind of roaming behavior the human race will exhibit if/when we are ever free to move about the planet.

    1. If you could zap around the world as easily as walking into another room, it would eliminate the value (and snob appeal) of expensive leisure travel. You might see some roaming for a few years at first, but once the world culture was homogenous enough, they’d settle down.

      Then it’s just a matter of waiting for Zefram Cochrane to invent the warp drive, and we’ll be on our way to having a Star Ship Enterprise and some new places to roam to.

      1. I doubt this.  For one thing, look at the rise of ocean cruisers – pure joyrides, nothing more. 

        Hotels would probably hurt, but if instant transportation were cheap, I’d be all over the place.  I *like* the small provincial town of 150.000 I’m living,  it has decent museums and a pretty good theatre.  But just stepping outside to visit the Louvre, Parthenon, Victoria Falls, etc? That would be splendid.

      2. Nah, no way. Not sure why you’d say “expensive” leisure travel; travel can be pretty cheap, the price tag isn’t the attraction at all. Unless I missed something and traveling is something worth bragging about? Don’t think so though. It’s more a cultural thing: for many Americans visiting Europe is a once-in-a-lifetime experience while Australians wouldn’t consider it anything special.

        I’m under 30 and I’ve been to 40-50 countries, mostly on other continents and about 30 US states, a good chunk of it non-business travel. For very little money because I had very little money for most of my life.

        If traveling were cheaper and faster more people would travel. Cost is a tiny, tiny factor if you ask me. Again, international travel doesn’t have to be expensive at all, even today.

        1. put differently, the biggest cost of long distance travel for most people who can afford to do it is often the time away from whatever they would be doing otherwise.

          if you’re young and/or not involved in a conventional career and not raising a family, this cost is small. if you have US-style vacation arrangements with your employer or elementary-school age kids, not so much.

          1. It also depends on one’s enthusiasm (and ability) for exploiting various student/adventurer/going native food and housing options at the remote site.

            One can live cheaply in a great many places, certain very high cost cities possibly excepted; but some mixture of knowledge, improvisation, and ideally local-language familiarity is helpful. If you just want to check into the local Marriott, things are a great deal simpler and more familiar; but you’ll find that the prices also remind you of home…

          2. I’ll add that traveling in the US tends to be a whole lot cheaper than in (Western/Central) Europe; cheaper accommodation, transportation and food. Depends on your requirements obviously; high-end hotels and first-class air travel won’t be cheap in the US, either…

        2. I agree with your sentiment. Don’t get me wrong. But I can’t agree with your reality.

          For most Americans, traveling is seen as something to brag about – and that’s largely because for most it is near-unattainable. As you say, visiting Europe for most Americans is a once-in-a-lifetime thing. And that once-in-a-lifetime trip won’t be expensive leisure travel, it’ll be quite modest. And even then, most Americans will never travel outside North America. And Americans are part of the world’s 1%, which includes western Europe and affiliated countries, Japan, etc. – everyone else can only dream about international leisure travel.

          Are you feigning ignorance here of the existence of “traveling in style” – flying first class and staying in the best hotels and eating at the finest restaurants? For many people this, the “jet set” lifestyle, is highly appealing.

          I dunno, but your comment seems conflicted. You say “If traveling were cheaper and faster more people would travel” followed immediately by “Cost is a tiny, tiny factor if you ask me” – directly contradicting yourself.

          Cost (and vacation time, which is a sort of cost) is a major factor!

          The fact that you’ve traveled so much doesn’t come across as bragging, but I do see it as an indication that you’re coming from a privileged position and making your comment without realizing your privilege. I know it’s possible to travel the world relatively cheaply because I’ve done it too – but I’m also coming from a position of (relative) privilege. 

          1. How can Americans be part of the world’s 1% when more than 1% of the world is American? I’d say at least 10% of the world, and possibly more like 20%, live in countries with American-equivalent or higher living standards.

            I agree, though, that vacation time is one major reason why Americans don’t travel. Another is that America has a far greater variety of landscapes so you can do more without leaving the country- here in Britain if you want to go to the beach somewhere sunny, ski, or go walking in a large natural forest then you have to leave the country.

    2. I was thinking the same thing, instead of visiting the local museum in Toronto for a japanese art exhibit  I could zap to japan for the day instead. When long distance travel is free the world changes. 

      1. What they don’t tell you is that the biggest change will be getting telefragged by griefers in real life…

      2. It’s just a question of what your priorities are: don’t buy that shiny new TV for $2,000 and you can spend 3 weekends in Japan. Bring your own lunch just one day/week for a year instead of eating out and that’s one trip to Japan.

        Long-distance travel IS pretty cheap. There’s just a skewed sense of what’s worth paying a lot of money for.

        1. As a follow-up to my previous reply to you, I definitely agree with you here. People have ridiculous priorities sometimes. But I don’t think the people who buy a $2,000 TV instead of an international trip are people who have a strong desire to travel. There are plenty of people who wish they could travel who don’t buy $2,000 TVs and who do bring lunch from home but still can’t manage it.

    3. It’s not a useful preview at all. Obviously the people who bought these tickets were atypical humans who wanted to travel a lot (and had a lot of money, though that may skew things less). I rather doubt that most people would behave similarly.

  2. I have a lifetime membership for the Tivo service… they also cancelled it after a few years because of lost income. It’s somehow less exciting than unlimited airline travel.

      1. I have had lifetime service from TiVo since they first came out. When I updated my old, heavily modded but unable to handle HD first gen model had the option of paying half price to transfer the lifetime account or pay full price to activate on the new box. I transferred it, but if I hadn’t they would still be honoring the lifetime service. There was a time when they were no longer offering it to new subscribers, and the reduced price transfer only came about after a lot of people complaining (and threatening to not upgrade their hardware, like I did).

    1. Lifetime Tivo service is still available, but the key catch is it’s the lifetime of the unit, not the account. So you can’t upgrade to newer models as time goes on. If they ever drop support for your model entirely, then its “lifetime” is up.

      Even with those limitations, it’s still a better deal that monthly service if you’re going to have it for more than two years. A major downside for Tivo is that it ends up with a large chunk of customers who aren’t providing any further income, *and* aren’t upgrading to new units (which would generate revenue of its own, and increase usage stats on more capable models where they might sell services).

      1. I’ve got that with the extended warranty. A month before the warranty is up, I’ll clone the hard drive so that I’ll be able to repair it myself.

  3. I am shocked that a corporation decided to compensate for their own lousy asset valuation by initiating a slimy policy of attrition-through-harassment.

    Well, I’m really only shocked that they didn’t retain an expert from the insurance industry to advise them on how best to do it…

    1.  I suspect the problem is that their lousy asset valuation extended to pretty much every aspect of their business.  If I read the article correctly, a total of 66 people bought these.  If you’re a huge airline and 66 people are such a huge threat that you have to get all secret police on them, then you’re probably doing everything wrong.

      1. Their bankruptcy would suggest that, indeed, ‘mistakes were made’.

        (Also, you really have to wonder how people with questionable asset-valuation skills could survive in an industry whose primary demands are predicting customer behavior, in order to offer as many options as possible while still running mostly full planes most of the time, and hedging against changes in fuel costs and fleet-acquisition capital costs…)

  4. I think they key issue here is the lack of controls. Companion tickets should never have been allowed, nor should giving your ticket or upgrades to others. That would limit the damage to those specific people who bought them – it’s still an exceptional deal for them, and would limit the exposure to the airline.

    Another way to look at this is that the semi-abuse of them is why we never see such promotions or deals anymore, or succinctly “this is why we can’t have nice things”.

    1. The problem is that the target audience for these tickets would be used to doing those kind of things already. You can’t tell the executive that the ticket he just paid the better part of a million dollars for will be LESS flexible than their current flying habits.

      Considering the size of the initial purchase, the airline should have been able to invest the money better. And then treated any shortfall as an advertising expense. These people should have been the focus of an advertising campaign.

      “AA is the airline the most frequent flyers in the world choose to patronize.”
      “Nobody flies more places more often than our passengers (and we have the passengers to prove it).”

      The failure to turn this minor problem into a major advantage betrays a stunning lack of vision.

      1. I get the impression that AA somehow expected customers to buy ‘unlimited’ tickets and then not alter their flying habits when the marginal cost of flying dropped to zero.

        Magical ponies may also have figured in to their analysis of the plan…

      2. A stunning lack of vision seems to be a course in every MBA program.  Look at Sony,  Circuit city, Borders, and  Blockbuster.  So many industries are birthed with creativity, and die with a lack of imagination and  a lust for controlling costs.

        1. When I was a young lad fresh out of high school, Pizza Hut’s all you can eat option was really attractive. Fast forward 20 years, I can’t even stomach the thought of a single Pizza Hut pizza, no thanks. 

        2. What do diarrhea and nausea have to do with this?

          Your version and my version can easily meet in the middle.  Oh, my god, Harry!  I can pile my plate a foot high with that expensive blue cheese!

        3. What do diarrhea and nausea have to do with this?

          Your version and my version can easily meet in the middle.  Oh, my god, Harry!  I can pile my plate a foot high with that expensive blue cheese!

  5. What a rotten time for my tiny violin to be in the shop.  Both sides of the story could use a sonata.

  6. Yet another entry in the big book of astoundingly dumb corporate behavior. From not even coming close to guessing that people would game the system when they came up with these, to the amazingly heavy-handed bullying done in an attempt to justify pulling the pass, it’s an illustration of why the airline industry isn’t too big to fail. 

    1. Individual airlines are not too big to fail (in fact they fail frequently ). But “the airline industry” is WAY too important to fail.

  7. My dad had a roommate in college in the 1960s who had a free lifetime ticket with PANAM, he paid for his college education by flying to Pakistan/India on the weekend and importing suitcases full of Cashmere he’d bought for pennies on the dollar (this was before they charged you for checked luggage). If you have any vintage cashmere clothing that was manufactured in the bay area 1963-1967, it was probably imported via PANAM by that guy.

  8. The alias of Extra Lowe and the flight attendant named Pierre made think this might all be fiction. Then I remembered we were talking about an airline. Stranger than fiction by default.

  9. So a corporation,  those awesome bastions of taking what is offered to the very limit (and often some more), offered people something and then were SHOCKED, Shocked I tell you, that regular people would exhibit the same sort of greed they do.
    It is sort of sad, in a humans are doomed sort of way, to see this repeating over and over. 
    On paper the TSA was a wise idea, the actual system we ended up with is no where near that original goal.  They grabbed up more power and toys because someone else paid the bills, and they are firmly ensconced in their position because no Congresscritter dare say anything lest they be cast as being “soft” on terrorism.
    And this, this is why we can not have nice things…

  10.  Even on paper, the TSA was a stupid idea; the actual system we ended up with *exactly* matches the original goal.  (The original goal was “covering politicians’ butts by exploiting fear and stupidity”.)

    1. No I am willing to think the original idea was to “tighten up” passenger screening for flights.
      It was the we have to make it bigger and better and give them even more powers where it went to shit.

      Would be sad to see the TSA started out on paper as lets buy some new metal detectors and xray machines for airports.

  11. Looks like  American Airlines did not consider the Frank Abagnale factor when offering these tickets.

    (The “Catch Me If You Can” guy)

  12. Heavy users, including Vroom and Rothstein, were costing it millions of dollars in revenue, the airline concluded.
    I’m curious how this was  calculated.  The misused companion seats on full flights are pretty clearly revenue lost to the airline, but it is likely that a good fraction of the other misuses didn’t actually cost more than the marginal amount required to feed and transport the extra passengers.  (Which is not negligible – I seem to recall an estimate of $50-60 marginal fuel cost per extra passenger on average for domestic flights – but it takes a lot of those to add up to millions.)

    1. It is possible that DEA math was used. If one assumes that every flight booked by one of these ticketholders would have been booked at a non-discounted first-class rate you can probably come up with a fairly large number.

      If that number isn’t large enough, you can wave your accounting hands and count both the ‘lost profit’ generated above and the direct cost of carrying the passenger. It’s double counting, since the direct costs were taken out of the ticket price to compute the profit in step one; but double counting makes the number scarier, so no problem there…

    2. Many of these flights were NOT domestic.  That’s part of the issue they were having.  Read the article again: they were flying all over the world: Japan, Paris, India, Europe, Canada and back again.  The one guy was travelling 18 times in a month, often on a whim.  Booking a flight to Japan from NYC and then going from Japan to Paris and then back from there?  That’s going to rack up some serious money, especially if he’s using his second freebie to use another seat.  Not only is he travelling for free, he’s preventing someone else from buying those seats, potentially.

      Which is not to say I begrudge him the privilege…that’s AA’s fault for overselling.  They assumed that no one would use that service at that level…but the outliers nailed them hard.  Poor contracts are not the flier’s fault.  This was just one of the many examples of AA’s poor management choices that led them down the road to Chapter 11.

      1. wizardru, wherever they’re flying, my question was simply one of knowing what they’re counting and what they aren’t to get their figure.  The “18 times in a month” flyer is not traveling for free, he bought a ticket, and his misuse of the companion only prevented someone else from buying a seat if the plane was full or if that person would have flied anyway.
        fff, did you mean RIAA/MPAA and not DEA?  

        1. Technically, I don’t even think the ‘companion’ use was a mis-use.  It could technically be considered a dick-move if someone got bumped in favor of his bag…but that doesn’t appear to have happened.  On the contrary, it sounds like they often played Santa with that spot when they weren’t using it.  And the ‘bag’ and ‘extra’ trick was an accepted practice right up until AA went broke.

          I just meant that I could see how they came to those calculations and that while it probably IS RIAA/MPAA accounting numbers, it’s not beyond the realm of reason that they could see it as costing them that much in terms of lost revenue…IF they were paying the regular fare.  Which they wouldn’t, because the only reason they fly that much is because they paid for the privelege and really, why wouldn’t you if you could?

          I have zero compassion for AA, here.  Their failure to properly assess the cost is not the customer’s problem.

  13. Wait a minute! This was such a BAD DEAL for the company that they decided to continue selling it for twenty-fucking-three years? Either something is completely wrong with this story, or successive management at the company was totally incompetent. I suspect both, in this case.

  14. But hey now – let’s not forget that we HAVE to pay the executives of these corporations LOTS of money – it’s the ONLY way to make sure we get the best and brightest!

  15. If these pAAses were such a bad thing then why would they give the exact same to AA Executives for life? 

    1. Well, they don’t have to justify their megabucks investment by devising ways to fly every other day…

Comments are closed.