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The frequent fliers who flew too much

Many years after selling lifetime passes for unlimited first-class travel, American Airlines began scrutinizing the costs — and the customers.

May 05, 2012|By Ken Bensinger, Los Angeles Times
  • For many years, Steven Rothstein, left, and Jacques Vroom held lifetime unlimited first-class tickets with American Airlines.
For many years, Steven Rothstein, left, and Jacques Vroom held lifetime… (Carolyn Cole / Los Angeles…)

There are frequent fliers, and then there are people like Steven Rothstein and Jacques Vroom.

Both men bought tickets that gave them unlimited first-class travel for life on American Airlines. It was almost like owning a fleet of private jets.

Passes in hand, Rothstein and Vroom flew for business. They flew for pleasure. They flew just because they liked being on planes. They bypassed long lines, booked backup itineraries in case the weather turned, and never worried about cancellation fees. Flight crews memorized their names and favorite meals.

Each had paid American more than $350,000 for an unlimited AAirpass and a companion ticket that allowed them to take someone along on their adventures. Both agree it was the best purchase they ever made, one that completely redefined their lives.

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.

The AAirpass system had rules. A special "revenue integrity unit" was assigned to find out whether any of these rules had been broken, and whether the passes that were now such a drag on profits could be revoked.

Rothstein, Vroom and other AAirpass holders had long been treated like royalty. Now they were targets of an investigation.

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When American introduced the AAirpass in 1981, it saw a chance to raise millions of dollars for expansion at a time of record-high interest rates.

It was, and still is, offered in a variety of formats, including prepaid blocks of miles. But the marquee item was the lifetime unlimited AAirpass, which started at $250,000. Pass holders earned frequent flier miles on every trip and got lifetime memberships to the Admirals Club, American's VIP lounges. For an extra $150,000, they could buy a companion pass. Older fliers got discounts based on their age.

"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."

The unlimited passes were bought mostly by wealthy individuals, including baseball Hall-of-Famer Willie Mays, America's Cup skipper Dennis Conner and computer magnate Michael Dell.

Mike Joyce of Chicago bought his in 1994 after winning a $4.25-million settlement after a car accident.

In one 25-day span this year, Joyce flew round trip to London 16 times, flights that would retail for more than $125,000. He didn't pay a dime.

"I love Rome, I love Sydney, I love Athens," Joyce said by phone from the Admirals Club at John F. Kennedy International Airport in New York. "I love Vegas and Frisco."

Rothstein had loved flying since his years at Brown University in Rhode Island, where he would buy a $99 weekend pass on Mohawk Air and fly to Buffalo, N.Y., just for a sandwich.

He bought his AAirpass in 1987 for his work in investment banking. After he added a companion pass two years later, it "kind of took hold of me," said Rothstein, a heavyset man with a kind smile.

He was airborne almost every other day. 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.

In July 2004, for example, Rothstein flew 18 times, visiting Nova Scotia, New York, Miami, London, Los Angeles, Maine, Denver and Fort Lauderdale, Fla., some of them several times over. The complexity of such itineraries would stump most travelers; happily for AAirpass holders, American provided elite agents able to solve the toughest booking puzzles.

They could help AAirpass customers make multiple reservations in case they missed a flight, or nab the last seat on the only plane leaving during a snowstorm. Some say agents even procured extra elbow room by booking an empty seat using a phony name on companion passes.

"I'd book it as Extra Lowe," said Peter Lowe, a motivational speaker from West Palm Beach, Fla. "They told me how to do it."

Vroom, a former mail-order catalog consultant, used his AAirpass to attend all his son's college football games in Maine. He built up so many frequent flier miles that he'd give them away, often to AIDS sufferers so they could visit family. Crew members knew him by name.

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