Short Stuff: AAirpass

pronounce both a's? I don't know, and I don't think so. I think that was more just for looks, So it's a air pass. No, I think it's just air pass. Well, just so people don't think we're crazy, what we're talking about is a program where American Airlines wanted to uh and did in fact sell people lifetime tickets unlimited first class travel. And they called it a a r P, A S S. And I just don't know whether to call it double a air pass or a a air baths or a air baths. I like the way I

said it the most. It's got a little mustard on it. Yeah. Well, we'll call it air pass, Okay, cool? So so yeah, like I think about this for a second, unlimited first class travel for the rest of your life. Anytime you want to fly anywhere, you just show up, flash your card, get on the plane. I think you had to book first or whatever. But in addition to that, you also had you got frequent Flyer miles as if you needed them,

that you would rack up with each flight. You also had a lifetime membership to the Admiral's Club, which was Triple M or American Airlines UM said their lounge or whatever. I guess sky club is what you call it. But yeah, yeah, they're lounges there v I P Lounge at the airports. UM. So you can have a pretty cushy experience, you know with this thing. The thing is is not everybody could

afford it. Um. There was a very expensive thing to buy at the time and remained such as long as they were selling it for until I think yeah, so, I guess we should point out the reason they did this was because there was a time in the nineteen seventies in the early eighties where air travel was not doing so great. The airlines were suffering in a lot

of ways. Uh, their revenues were way down, and they said there was a Deregulation Act of nineteen seventy eight and American Airlines actually posted a seventy six million dollar loss in nineteen eighty. So they're like, we gotta do something here. Why don't we see if there are some rich people out there that would buy into this deal?

And there were, Yeah, I mean, rather than go borrow at the market, like, interest rates were really really high, so they made a lot of sense to just go turn to consumers and say, hey, you want to basically prepay for a lifetime of first class travel. And they figured that probably like they could go to you know, um really well healed firms to say, hey, you've got some top employees who fly a lot, this actually would probably make sense. And I think they were successful in

that in that respect. But some famous people bought it too. Willie Mays had one, Mark Mark Cuban still has his. He said it was the one of the best purchases he's ever made. Um. Michael Dell, founder of Dell Computers, had one. Um or still may um And ultimately twenty eight people bought into this thing, which cost at at the beginning when they started offering two hundred and fifty thousand dollars, and then you could add a companion pass

for another hundred and fifty thousand dollars. Yeah, so let's let's talk about the money for a minute. Um to fifty plus one fifty is four hundred thousand dollars. That's a lot of money, to be sure. But if you've got some dough and you like to travel or have to travel, it's a great deal. Yeah, it really is.

It's a fantastic deal, be because if you travel enough, this thing's going to pay for itself potentially within just a few years, depending on how much you travel, and if you travel a lot, like you're a super traveler, you could conceivably make this thing pay for itself within a single year. Yeah. So that's the first offerers they laid out there, two and fifty grand plus one fifty for the companion. They realized, wow, we didn't charge enough.

So eight o nine years later they said, all right, how about six hundred thousand dollars including the companion, So that's an extra two grand. Then a nine and ninety three they bumped it to one point zero one million. Yeah, that extras was super important at that point. I think they were. They must have been doing some really specific math to come to that though, right I would. I would guess though, like no one in the history of the world has ever charged one point zero one million

dollars for anything. It's weird. Uh. And then I think at the very end, and two, I can't believe this lasted this long. And two thousand four their final offering was in a Nieman Marcus catalog at three million bucks plus two mill for your companion. Yeah. And in between two thousand four they just stopped offering it all together. But they trotted it out back one more time in two thousand four for that Christmas catalog, but nobody bought it.

As far as I know, no one bought it, So I think the number that I ran across, so there's some really good articles on this. There's one by Zachary Crockett on The Hustle. Uh. There's another one by Ken Benzinger from the Los Angeles Times. And the number that I saw is twenty eight. There's twenty eight people who ever bought a air pass, a double a air pass? How many to eight or I'm surprised it wasn't more,

to be Frank, I'm a little surprised too. And the thing is that some of these people bought it, and I think really didn't get their money it's worth out of it. But then there were a couple of people, there were a few people, a small handful, who got so much of their money out of it that American Airlines said, uh, we can't take this. Remember how we said that you had a lifetime pass were we we were going back on that deal. And I think we should take a break and then we'll talk about those

guys right after this. Okay, let's do it. M M all right, Chuck, Let's talk about Jacques Room and Stephen Rothstein. Yeah. So these were a couple of people who became pretty prominent in this whole. Almost called it a scam because somehow it seems like it it's got a flavor to it. For sure it does. So Stephen Rothstein, he bought his pass. Uh. He was an investment banker for bear Stearns. Uh. And then there was Jacques Room, like you said, and he

was a direct marketing catalog consultant. He actually took out a loan, four thousand dollar loan at twelve percent interest over five years to get his AN eighty nine. And these guys, boy did they travel. Yeah. Yeah. They both made fun of something that that part in um Up in the Air where George Clooney gets congratulated for hitting the ten million mile mark. They just both kind of scoffed at it. They're like, we don't even remember when we hit that mark. Yeah, they hit that by like

July of the first year. Basically, I think one of them. I think Room has an estimated thirty eight million miles traveled to his name, and Rothstein has about thirty million. Yeah, that's a lot of miles. And you would think, like, even if you like to travel, you can't go on that many trips and like vacations and things. So and you're kind of right, But here's what some some of the things these guys were doing. Like Room was like, you know what, I need a babysitter here in Dallas.

Uh So I'm gonna fly to Washington, d C. And pick up my father in law, bring him back here so he can babysit tonight and I'll just fly him back afterwards. That's exactly what he would do. Yeah, he once he once flew to London to get two tires for his motorcycle because it was cheaper than paying for the freight shipping. Let me see here, July two thousand four. In one month, Rosteen flew eighteen times to places like Nova, Scotia, Miami, London,

Los Angeles, Maine, Fort Lauderdale, New York. Yeah, and so like this was like flying for these guys was a lifestyle, like it was part of their life. It was actually kind of like the center of their life. They both have families, but they both had families that knew that they were going to be probably in a different country just about every day of the week. It was just what they did. And so American had not planned for guys like this to buy the air pass. This was

not part of the original plan. UM. So when they started to realize that Room and Stein were each each costing them about a million dollars a year in travel, they decided that they needed to find a way to basically cancel their air passes. And so they got an elite task force on this, the UM the Revenue Integrity Team, and said, go find a way to get rid of these guys passes. Yeah, because there are obviously rules, but not enough because they were doing things and it wasn't

just them. There were other people in the program doing things like booking multiple trips in case like their one vacation didn't work out, or they changed their plans last minute, they could just jet on over to Paris instead of Hawaii, or I don't really like flying with anybody, so I'm just gonna book my companion seat to be empty on every single trip, exactly. Yeah, and again basically what I would do, yes, right, what what a lot of people

would do. And they were definitely not the only ones doing this, and from from you know, the rules that A had, it was not against the rules. A didn't like it because they couldn't sell that seat and they you know, UM had trouble filling a seat when it was you know, their extra flights were canceled at the last minute, UM because these people didn't pay cancelation fees. So but there there wasn't anything they could get them on.

The one that they went after, these guys four was selling their extra companion pass and it turns out like they both did. They both gave away their companion passes to total strangers pretty frequently. UM, Room had a habit of finding people who suffered from AIDS, HIV AIDS, and this is back in like the eighties and nineties, um, when it was a totally different jam. And he said, you know, hey, let me let me fly with you and you can go see your family for free. But

they also they it really is. They also definitely sold them to Room made a hundred grand alone from just one couple or one couple alone paid him that much UM to shuttle them back and forth to Europe. So they were both definitely making money off of this on the side too, And that's what American went after him for. Yeah, I mean it sounds like for that one couple he was just acting as their de facto travel agent at

one point. Yeah, and almost travel agent slash escort too. Yeah, I'll fly well because he kind of had to fly with him, right, that's my understanding of it. Yeah, So if you read some of these articles, you can read from Caroline Rothstein, who was I believe his daughter, and she said, you know what, like my dad gets a

bad rap um. Sure he sold some, but it's not like he was out there getting rich off this, and it's not like there was anything in the policy at all, saying they couldn't do it because they got the first version, which did didn't say anything about selling him. I guess they didn't think ahead. And then later and further subsequent

contracts they pointed out that you couldn't do it. But she was like, they didn't break any rules even no, they didn't, and UM, so American just basically said, well, we still say you're you're you're abusing your passes and they terminated both of them, and so some law stuits, lawsuits started going back and forth. Um, and then Americans parent company filed bankruptcy and so from everything I could find, those lawsuits are now still sitting out there in like

legal limbo. But neither man has their air pass anymore. And so you might say, you know, oh boo, who these guys made their money back many times over with all the travel they did, and you know, they kind of almost seemed like they took advantage of a a and played them for chumps. But Caroline Rothstein, Stephen Rothstein's daughter, says, like, my dad lived to travel, or lives to travel. I

believe he's still alive. Um, and he he was basically lost his life when American took away his his air pass and much the same for Jacques room to Like, all that guy loved to do was travel. That was what he loved to do, and that's why one of the reasons he would travel so much. Yeah. I got a couple of feelings about that. One is, you, you make this deal with American Airlines, they should have honored it for life. Yeah. But the other also is like,

these guys can still travel, they just gotta pay for it, right. Well, yeah, it's true. No, for sure, It's not like they're like not like right, I bet I bet they didn't fly American Airlines ever again, though I would guess not. But yeah, I just have the impression that was a very bitter pill for both of them, too small to swallow, and they both I think, feel like they were targeted because they were among the least wealthy air pass holders, so

they made easy targets. But they were also probably among the two that were the um using it far and away the most too. So who knows, But as far as I know, it's not really resolved legally, but I'm guessing as far as American Airlines is concerned, it's done. You got anything else I got nothing else. I've never heard of this. It's super interesting. I love it. Uh. If you want to go learn more about this, go

check out Zachary Crockett stuff. He as a writer I don't know if he still has or not, but a long time writer for Priceonomics and others, and he just really does a great job of finding really interesting stuff and writing about it. So UM, hats off to him, Hats off to the l A Times and to Caroline Rothstein for publishing all these great articles, and hats off to you for listening to short stuff Audios. Stuff you Should Know is a production of I Heart Radios How

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