What a deal he was on given the large AA network. Had not seen this story before.
Sounds like he rorted the system from reading it, but global travel first class for $US250,000 was a great deal in the first place.
Man had his $250,000 lifetime first-class ticket cancelled after he cost the airline $21,000,000
American Airlines' unlimited free pass for first-class tickets wound up costing them big time over the decades
Dylan Murray
A frequent-flyer had his lifetime offer of free first class flights revoked after he ended up costing the airlines millions of dollars.
For many, a lifetime free pass for anything is a life-changing deal, and
air travel is no exception. However, as
American Airlines found out, a lifetime free pass doesn’t just
sound too good to be true — it really
is too good to be true.
In an attempt to make quick cash in 1981, American Airlines offered up free first-class tickets for life to any individual willing to pay them $250,000 on the spot.
At the time, this was done by the airline with the intention of making additional profits as they were dealing with financial struggles and were looking for a way out.
American Airlines initally offered the AAirpass for $250,000. (pexels/Alfred GF)
At face value, their plan worked. A total of 66 people purchased the lifetime pass, known officially as the AAirpass.
However, when you look deeper, this was one of the worst financial mistakes they ever could’ve made, and it's all because of one man named Steven Rothstein.
Rothstein purchased the AAirpass in 1987, and within 21 years, he alone cost American Airlines over
$21 million dollars in profits.
How did he do this? Well, even beyond the amenities and add-ons that come with riding first-class, it was the sheer amount of flying Rothstein did that cost the airline millions.
By 2008, Rothstein had traveled 30 million miles across 10,000 flights with American Airlines, all of which were free of charge.
If you do the math, you can see that just one passenger made the entire AAirpass program unprofitable.
Despite this, it took decades for American Airlines to come to the realization that Rothstein was costing them millions of dollars.
Once they had finally figured it out in 2008, they quickly cut off Rothstein in the middle of a travel day, leaving the man unable to board his flight to Bosnia as a result.
Rothstein flew across the world roughly 10,000 times before being stopped (Caroline Rothstein)
American Airlines also sued Rothstein as a result of his actions, though not for his personal overuse of the AAirpass.
Instead, they sued the stockbroker for fraud, accusing him of booking seats for non-existent passengers under names such as 'Bag Rothstein' and 'Steven Rothstein Jr', and also booking tickets for flights he was never planning to board.
Rothstein also admitted to offering up his ticket to those in need on numerous occasions throughout the 20+ years he had unlimited flights.
Speaking to Forbes back in 2019, Rothstein explained his side of the story, saying: “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.”
Despite American Airlines' initial legal action, they and Rothstein eventually settled outside of court.
And, in case you were wondering, Rothstein now prefers to fly with United Airlines whenever he travels.
One man's use of the American Airlines AAirpass program wound up costing the company millions over the decades.
www.unilad.com
