Money Matters

Mark Cuban Says This is One of the Best Purchases He’s Made in His Life

(Source: www.inc.com)

The year? 1981.

The problem? American Airlines was totally broke.

According to The Hustle, the airline had posted $76 million in losses the previous year. (This was a result of the Airline Deregulation Act of 1978.)

The solution? An innovative idea that was supposed to bring in a good chunk of change.

For just $250,000, you could buy an unlimited AAirpass. For an additional $150,000 you could buy a second one. It was supposed to guarantee unlimited first-class travel for life. There were no restrictions. You could take as many flights as you wanted, to anywhere you wanted.

In addition to free flights, passengers earned frequent flier miles on every flight they took. More flights = more frequent flier miles, especially long-haul international flights.

This ended up being a very solid investment for the passengers who bought it. Mark Cuban was one. He told The Hustle it was one of the best purchases he’s ever made.

Those people redeemed so many first-class flights that it ended up costing American Airlines millions in lost revenue.

The Hustle goes on to tell the whole story, which you should totally read because it’s funny, quippy and just an utter delight. They’ve even got pictures of the original contract one passholder signed. 

Here are the highlights, along with other nuggets of information pulled from other news articles published over the years about the unlimited AAirpass.

Over 10,000 first-class flights claimed

The story highlights Steve Rothstein, who purchased the unlimited AAirpass and the companion pass in 1987. He then went on to take more than 10,000 flights over the next 25 years.

He flew all over the country and frequently jetsetted to London. “He flew up to Ontario just for a sandwich,” The Hustle article reports. He’d even offer his companion pass to strangers at the airport.

The LA Times also spoke to Rothstein in 2012. He told them in July 2004, he took 18 flights. “If a friend mentioned a new exhibit at the Louvre, Rothstein thought nothing of jetting from his Chicago home to San Francisco to pick her up and then fly to Paris together,” the newspaper reported.

Rothstein would almost always book two seats, but cancel one last minute. American Airlines eventually revoked his pass.

Taking out a loan

Another unlimited AAirpass holder, Jacques Vroom, didn’t have cash on hand to buy the two passes. So he took out a loan. And Vroom certainly cashed in on his pass. 

The Texas-based direct marketing catalog consultant never missed one of his son’s football games in Maine. He also enjoy short jaunts to Europe just because. One time, he flew with his daughter to Buenos Aires for a day. It was to help her with a middle school report on South American culture.

“There was one flight attendant, Pierre, who knew exactly what I wanted,” Vroom told LA Times. “He’d bring me three salmon appetizers, no dessert and a glass of champagne, right after takeoff. I didn’t even have to ask.”

Vroom racked up so many frequent flier miles that he began to give them away. Texas Monthly reported he collected over 37 frequent flier miles. Vroom donated miles to AIDS patients so they could visit their families.

American Airlines also revoked Vroom’ pass.

25 people still carry an unlimited AAirpass

Mark Cuban still has his pass. So do most of the other pass holders. The whole thing failed miserably. Here’s what the airline’s president at the time told LA Times when they interviewed him about the program

“We thought originally it would be something that firms would buy for top employees,” said Bob Crandall, American’s chairman and chief executive from 1985 to 1998. “It soon became apparent that the public was smarter than we were.”

Instead, mostly wealthy people bought them. And used them profusely. Sometimes they would book an empty seat just for a little extra arm room.

American Airlines not only revoked a few passholders, but also started charging more for the unlimited AAirpass. By 1990, they were charging $600,000 for two passes. Then it went up to $1.01 million. When they stopped selling it completely in 1994, over 60 people had purchased them.

Alas, you can no longer grab the best travel deal of a lifetime. But at least you can get free guided meditations on some of your next flight. ​

More Info: www.inc.com

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