How American Airlines Screwed Some Very Frequent Fliers

The L.A. Times had a very interesting story over the weekend about American Airlines’ “AAirpass” program. It sounds like a dream: for anywhere between $250,000 (when the program began) and $3 million (the most recent offer, in 2004, which nobody took up), AA customers could purchase tickets that gave them unlimited first-class travel for life. As Ken Bensinger writes, “It was almost like owning a fleet of private jets.” But now the financially troubled airline is cutting off these incredibly frequent fliers (Jacques Vroom, of Dallas, has logged more than 37 million miles). The program, it seems, is costing the company more than a million dollars per pass holder per year. The airline told some of the passengers via letters delivered at check-in that their passes were canceled. Needless to say, there are lawsuits filed.

Some thoughts about this. 1) I’m surprised that the L.A. Times, and not the DMN, or Texas Monthly, or National Magazine Award winner Tim Rogers, broke the story. 2) I really, really want one of these passes.

11 comments on “How American Airlines Screwed Some Very Frequent Fliers

  1. I suspect the reason Tim didn’t break this story is he still is on Mark Cuban’s shit list. If I recall correctly the free for life ticket is the first thing Cuban bought after unloading Broadcast.com.

    If he was on speaking terms with Cuban I’m he would have been the first to hear about Cuban’s pain and pending lawsuit.

  2. These sort of ‘lifetime’ executory contracts are great right up until the vendor files for Chapter 11 bankruptcy protection. The owners of the contracts will become ‘creditors’ and be able to argue in the federal bankruptcy court that they should get some portion of the proceeds – typically pennies on the dollar. These contracts should not be given precedence over other executory contracts terminated in bankruptcy. I always wished I had bought one of them back in the day (I was 24 when they stopped selling them), but now I am sort of glad I didn’t.

    With regard to Mr. Vroom – AA is suing him for selling his companion seat. AA claims it is a violation of the deal to resell your unlimited lifetime seat. More on that here: http://thescoopblog.dallasnews.com/2012/05/la-times-american-airlines-takes-on-holders-of-lifetime-passes-including-dallas-marketing-guru-jacques-vroom.html/

  3. My guess is, the local media are busy covering a bankruptcy. These contracts are small compared with debt, pensions, etc. Nifty story, though.

  4. I read the article and it really sounds like Vroom and the other guy gamed the system and American was dumb to let it happen and dumber to end it the way they did.

  5. @muse, as you say, the owners of the lifetime contracts become creditora, but what if AA proves that they have received full value (obviously they have received benefits that far exceed the cost) couldn’t the court deny the claim of said pass holders?

  6. And then there is the way AA “screwed over” almost every employee and retiree with their “from the top”policies and very little care for the bottom 99%!

  7. I read the L.A. article. My perspective is these customers broke the ‘spirit’ of their contracts by selling their companion seats. (I.e. basically becoming couriers [delivering people for cash, documents for cash, upgrades to strangers for cash, etc.].) The program was designed to offer unlimited travel -TO- destinations, not unlimited travel for the sake -OF- transportation of people or goods…with (often) no stay at the destination.

  8. I read the article quickly…saw a few examples of folks profiting or acting silly (customers will do that). However, are they revoking ALL AAirpasses or just placing their wrath on folks identified as gluttinous or greedy? If there are around 64 folks using them (and they are all over 60 years of age I imagine) and they cost the airline $1 million a year over a bad business decision that will solve itself within 15-30 years that’s not exactly big savings. They could find $64 million in savings annually between the seat cushions of rows 1-6.

  9. Where is AA’s side of the story???

    So far this is more innuendo than journalism.

  10. You guys should read the article more closely.

    1. Nothing in the contract (which was linked to the article) says Vroom can not sell his companion seat.

    2. AA never found any evidence that he sold any seats, just that he had lots of different companions, including AIDS patients he was taking to see their families, poor students for learning abroad, etc.

    Vroom should be commended and his AAirpass returned. AA clearly did not honor their contract. How cn we as customers not expect them to do the same to us?

  11. Priscilla…you should read other articles on the issue as this article (if you can call this one) clearly has an angle. I’d hardly say AA screwed these frequent fliers over- one that had clocked over 30 million miles, clearly AA have been more than generous.

    Court proceedings found that Vroom had received over $100,000 in cheques from these various ‘companions’. Out of the 3,009 reservations Rothstein made in less than 4 years (usually for two seats), he cancelled 2,523 of them. You can clearly see that not only did these customers defraud the system to an excessive degree (ie. flying to London 16 times within a 25 day timespan) but because they booked flights they had no intention of taking it caused a considerable loss in potential revenue for AA.

    What these individuals were doing was harmful and fraudulant to AA. These kind of unlimited deals are often made with the naive belief that the purchaser will use it in good faith. No surprise when they never work.