American Airlines' unlimited free pass for first-class tickets ended up being a costly mistake for the company over the years
A frequent flyer had his lifetime offer of free first-class flights revoked after he ended up costing the airline millions of dollars.
For most of us, the idea of a lifetime free pass for anything sounds like a dream come true, especially when it comes to air travel.
But, as American Airlines soon realized, a lifetime pass that promises endless first-class flights isn't just too good to be true—it can become a financial disaster.
In 1981, American Airlines was dealing with financial struggles and came up with a plan to quickly raise some cash.
They offered a deal where individuals could pay $250,000 up front for a lifetime of free first-class flights.
The airline hoped this would bring in some much-needed revenue at the time. And at first glance, it seemed to work. A total of 66 people purchased the lifetime pass, known as the AAirpass.
However, what seemed like a good idea turned into one of the worst financial decisions American Airlines ever made, and the reason largely comes down to one man—Steven Rothstein.
American Airlines initally offered the AAirpass for $250,000. pexels/Alfred GF
Rothstein bought his AAirpass in 1987, and over the course of 21 years, he managed to cost American Airlines over $21 million in lost profits.
How did he do it? Beyond just enjoying the perks and luxury of first-class travel, Rothstein simply flew so much that the airline couldn't keep up with the costs.
By 2008, Rothstein had logged 30 million miles on 10,000 flights, all without paying a cent for his tickets.
If you do the math, it's clear that Rothstein's flying habits made the entire AAirpass program a financial nightmare for the airline.
Even though it took a while, American Airlines eventually realized how much money they were losing because of Rothstein.
In 2008, they decided to pull the plug on his free flights and revoked his pass mid-travel, leaving him stranded before boarding a flight to Bosnia.
Rothstein flew across the world roughly 10,000 times before being stopped Caroline Rothstein
American Airlines didn't stop there—they also sued Rothstein. But the lawsuit wasn't over his excessive use of the AAirpass.
Instead, they accused him of fraud. The airline claimed that Rothstein had booked flights for fake passengers, using names like 'Bag Rothstein' and 'Steven Rothstein Jr.'
He was also accused of booking flights that he never planned on taking.
Over the years, Rothstein also admitted to giving his free flights to people in need, helping them attend family emergencies or funerals.
Speaking to Forbes in 2019, Rothstein reflected on his actions, sharing his perspective: "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."
Though American Airlines initially took legal action against him, the two sides eventually settled out of court.
And in case you're wondering, Rothstein now prefers to fly with United Airlines whenever he travels.
