In 1981 American Airlines realised that those metal birds that they make their revenue from required some basic inputs such as fuel and well, staff. Unfortunately for American Airlines, they had run out of cash. Scraping for nickels to keep their fleet flying, American’s former President Robert Crandall wanted to cut costs dramatically and rebuild the airline from the ground up. With high interest rates at the time, the airline came up with an alternative way to try and raise quick cash—by offering unlimited First Class tickets for life, for $250,000 each.
Inflation-adjusted, these first-class tickets—also known as the AAirpass—would cost $570,000 in 2019, although American discontinued selling them in 1994 after getting 28 customers to buy them.
The issue that American quickly found out was that although consumers may not abuse an “Unlimited” option in many other arenas—such as unlimited soda at a restaurant, or even an all-inclusive holiday, where the majority of people will still have physical (and dietary) limits of how much food and beverages they will consume—when it came to first-class tickets, the customers who bought the unlimited passes were more than willing to go the extra mile, literally and metaphorically.
The purchasers of the AAirpass were a level beyond what might be classed as a frequent flyer, with stories of some travelers using the pass to fly as many as 10,000 times, until American Airlines revoked what it had originally promised as “Unlimited lifetime passes.”
However, in 2007, American Airlines “revenue integrity team” targeted the loss-making operations of the airline, and unsurprisingly, the AAirpass had been unprofitable for decades. Vroom and Rothstein had their “unlimited” passes revoked with American claiming “fraudulent activity.”
Rothstein claimed he “often gave miles to people with good stories about why they needed to fly someplace. For example, I gave a man in Seattle a ticket to go to his father’s funeral. I gave many people tickets to visit ill family members. I don’t view that as philanthropy, I view that as good deeds.”
Rothstein now says he doesn’t fly American anymore after they revoked his unlimited AAirpass, and that his favourite carrier now is United.
We're thinking that perhaps it would have been better to sell 'unlimited first class' to non-frequent flyers?