The Unlimited Flight Pass That Backfired On American Airlines
American Airlines may be one of the most lucrative carriers today, but in the early 1980s, the company was in dire straits and needed to earn money fast. As a creative solution, American Airlines launched the AAirpass — spelled with two A's — as a way to secure funds from wealthy travelers. The idea was simple: Passengers who purchased an AAirpass had access to a lifetime of limitless flights — yes, limitless flights for the rest of their lives. When the program launched in 1982, it cost buyers a one-time fee of $250,000 (about $800,000 in 2023, adjusted for inflation). If they wanted to secure a second seat, a lifetime companion pass would cost an additional $150,000.
pBesides being able to travel whenever, wherever, AAirpass holders also earned frequent flier miles on their trips and were granted access to American Airlines' airport lounges. They were essentially treated like royalty, and in the years that followed the program's launch, a reported 66 people reaped its benefits. A few famous faces even snatched up a pass, including "Shark Tank" investor Mark Cuban, computer mogul Michael Dell, and Major League Baseball player Willie Mays.
For those who could shell out the initial cost, the AAirpass was a steal. As Cuban later told CNBC Make It, "I guessed/calculated that my predicted cost per mile would be 12 cents." However, the program would turn out to be a horrible deal for American Airlines.
The perk cost American Airlines millions of dollars
Nearly a decade after introducing the AAirpass, American decided it was time to raise its price. In 1990, the pass and companion ticket retailed for $600,000, and by 1993, the combination sold for $1.01 million. However, just one year later, American Airlines would press pause on the pass altogether, perhaps because the offer wasn't going as planned. "We thought originally it would be something that firms would buy for top employees," Bob Crandall, the airline's chairman and chief executive from 1985 to 1998, later admitted to the Los Angeles Times. "It soon became apparent that the public was smarter than we were."
Some pass holders maximized the limitless-flights benefit, booking thousands of flights, including some they never even boarded. With the companion ticket, some travelers would book two seats, even if they were traveling alone, and reserve the second for their bags or, occasionally, for a stranger in need. One AAirpass customer even used his ticket to earn extra income after he was forced to stop working. For $2,000 a month, he booked flights to Europe for a couple in Dallas, allowing him to stay on top of his bills.
But all these flights were starting to cost American Airlines. Two frequent fliers in particular, Steven Rothstein and Jacques Vroom, were setting the company back over $1 million each per year — and that didn't include the dozens of other AAirpass holders who routinely relied on the perk.
A lucky few still hold a lifetime pass
The travelers who regularly used their AAirpass may have just been making the most of their hefty investment, but American Airlines was tired of footing the bill. In 2007, the company began investigating the pass's heaviest users, including Steven Rothstein and Jacques Vroom. Looking for signs of fraud and other wrongdoing, American eventually discovered that Rothstein had booked over 3,000 flights (usually with two seats) in four years and canceled the majority of them — preventing the air carrier from selling those spots to other customers. Vroom was found to have accepted money (over $100,000 just from the owners of a local jewelry store) from people who flew using his companion pass.
Armed with these findings, American Airlines voided the men's — and a few other passengers' — AAirpasses. However, a lucky few still fly with the lifetime pass today. The airline even made a second attempt at selling the passes in 2004, when AAirpasses were advertised in a Neiman Marcus catalog for $3 million, with companion tickets costing an extra $2 million. None were sold, and the program was never presented again.
Eventually, American Airlines offered a new type of AirPass, where holders could access reduced fares and other perks, such as lounge access, complimentary amenities, and priority boarding. The fee for the program ranged from $10,000 to $30,000. By November 2022, this new iteration was also scrapped by the company.