A frequent-flyer had his lifetime offer of free first class flights revoked after he ended up costing the airlines millions of dollars.
A free plane ticket for life is a deal that would alter the course of many people’s lives. But as American Airlines discovered, a complimentary pass for life is more than just an enticing idea—it’s actually too good to be true.
In 1981, American Airlines offered lifetime first-class travel to anyone who paid $250,000 immediately in an effort to generate some quick cash.
The airline, which was experiencing financial difficulties and seeking a way out, did this at the time to increase their profits.
On the surface, their strategy was successful. The AAirpass, a lifetime pass, was bought by 66 individuals in total.
But if you go more, you’ll see that this was one of their worst financial decisions ever, and it’s all down to a guy named Steven Rothstein.
Within 21 years of buying the AAirpass in 1987, Rothstein had lost American Airlines more than $21 million in profit.
What was his secret? The amount of flights that Rothstein took cost the airline millions of dollars, and that’s not even counting the extras that come with flying first class.
By 2008, Rothstein had logged 30 million miles across 10,000 complimentary flights on American Airlines.
A single customer rendered the AAirpass program financially unviable, as can be seen from the calculations.
Regardless, American Airlines didn’t realize Rothstein was losing them millions of dollars for decades.
Once they had finally figured it out in 2008, they quickly cut off Rothstein in the middle of a travel day, leaving the man unable to board his flight to Bosnia as a result.
American Airlines also sued Rothstein as a result of his actions, though not for his personal overuse of the AAirpass.
On the contrary, they pursued a fraud lawsuit against the stockbroker, claiming that he had booked seats for imaginary customers using aliases like “Bag Rothstein” and “Steven Rothstein Jr.” and had also purchased plane tickets for journeys that he had no intention of taking.
While he had unlimited flights for almost 20 years, Rothstein confessed to giving them away on multiple occasions to people in need.
Speaking to Forbes back in 2019, Rothstein explained his side of the story, saying: “I gave a man in Seattle a ticket to go to his father’s funeral. I gave many people tickets to visit ill family members.
“I don’t view that as philanthropy, I view that as good deeds.”
Rothstein and American Airlines were able to reach a settlement outside of court, notwithstanding the former’s early legal action.
Just so you know, United Airlines is now Rothstein’s preferred airline for all of his travels.