The Frequent Fliers Who Flew Too Much

Think about how much you paid for your last airline flight. Then imagine how much an unlimited-use lifetime first-class airline pass would be worth -one in which you could take a companion of your choice on each flight. American introduced the AAirpass in 1981 for $250,000. The price later went up, and the companion pass was extra, but it was always worth more to those who flew a lot. Steven Rothstein and Jacques Vroom each bought passes early in the program and flew everywhere -all the time.
In the 2009 film "Up in the Air," the loyal American business traveler played by George Clooney was showered with attention after attaining 10 million frequent flier miles.

Rothstein and Vroom were not impressed.

"I can't even remember when I cracked 10 million," said Vroom, 67, a big, amiable Texan, who at last count had logged nearly four times as many. Rothstein, 61, has notched more than 30 million miles.

But all the miles they and 64 other unlimited AAirpass holders racked up went far beyond what American had expected. As its finances began deteriorating a few years ago, the carrier took a hard look at the AAirpass program.

Heavy users, including Vroom and Rothstein, were costing it millions of dollars in revenue, the airline concluded.

This is clearly a case of launching a promotion without crunching the numbers, or thinking "what could possibly go wrong?" American Airlines investigated both Vroom and Rothstein for fraudulent use of their passes. After raising the price of the unlimited passes to $3 million (with an extra $2 million for a companion pass), no more were sold. The airline filed for Chapter 11 bankruptcy last November. Link -via Metafilter

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Typical corporate thinking, and then to investigate the owners of the tickets for fraud? It reminds me of when J.C. Penney brought out an unlimited warranty car battery. I was working for the company in one of their automotive centers at the time and we working class peons all immediately saw the flaw. They had NO restrictions such as change of ownership of the car it was installed in, selling the car and keeping the battery or a faulty charging system on the car. It really blew up in their faces and they quickly changed the warranty. For being at the top there are times when management certainly looks like a bunch of idiots.
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