By: Chris O'Shea
Airline companies have been tightening their belts for years now, as the recession and rising gas prices crippled a once booming industry. Some airlines started charging for their horrible food and some simply revoked that horrible food altogether. American Airlines might have topped all of the budget watching efforts though, because it started squeezing out customers who flew too much.
Meet Steven Rothstein and Jacques Vroom — two freakishly frequent fliers. Both, many years ago, purchased something called the AAirpass, which is essentially a lifetime first class ticket aboard the airline. The tickets, which cost Rothstein and Vroom $350,000 each, came packed with amenities. They could bypass security in most cases, and even purchase a "buddy pass" for someone for an extra $150,000.
With their golden tickets in hand, Rothstein and Vroom made use of them, and then some. Rothstein told The Los Angeles Times that he has flown about 40 million miles, and Vroom thinks he's somewhere around the 60 million mark. In 1993, the cost of an AAirpass was one million dollars. That was also the last year the tickets were sold. Rothstein and Vroom were part of the reason why.
As Bob Crandall, American Airlines' chairman and chief executive officer from 1985 to 1998, explained, "We thought originally it would be something that firms would buy for top employees. It soon became apparent that the public was smarter than we were."
Bridget Cade is the leader of American Airlines' "elite revenue integrity team." Cade began looking for ways to save money, and one of the first places she looked was the AAirpass holders. She, and other executives, were tired of being dumber than the fliers, and she investigated Rothstein and Vroom, to see if they had done anything that would allow the company to revoke their tickets. It turns out that they were.
Rothstein had, during his time with his pass, scheduled 3,009 reservations in under four years. He always booked two seats, yet he canceled 2,523 of those reservations. Cade brought the matter to court, arguing that Rothstein never meant to use the seats, thus keeping American from making money. His ticket was instantly canceled.
Vroom, now that guy had no qualms about flying too much. In fact, he often booked flights with people he didn't even know, and even flew to Japan a few times without staying overnight, just so he could rack up the miles. Cade looked into his other habits too: Getting people to pay him to use his pass. According to the LA Times, Vroom had, at various times, received checks for $2,800, $6,000 and $100,000, to use his AAirpass. That was all Cade needed. She took him to court as well, and revoked his golden ticket. Vroom countersued, and the case is still undecided.
If Rothstein and Vroom can get audited, it's probably worth watching your own actions when flying. Considering that American has filed for bankruptcy, there are bound to me more belt-tightening measures. The next one could involve you.
[Pic via Flicr - ReneS]