The $250,000 Airline Pass That Was Worth Every Penny

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In the early 1980s, American Airlines started selling the AAirpass, which granted the holder unlimited first-class travel with the carrier—for life. At first, the pass cost $250,000. Sounds like a lot of money (especially three decades ago), but it’s a bargain considering that pass holders have been known to take $125,000 worth of flights in less than a month’s time.

First off, you can’t buy an AAirpass any longer. Not the pass as it was first envisioned anyway. American still does sell something called the AAirpass, but it’s a shell of the original product. The current pass is available only to customers who spend a minimum of $10,000 annually on American Airlines’ flights. The main benefit for pass holders is access to fixed rates that aren’t all that cheap, but that at least ensure travelers won’t get gouged as badly as the masses when booking flights at the last minute. For example, a flight from Chicago to Dallas costs a bit over $500 for a pass holder; the same trip, if booked on the day of travel by an average Joe, probably runs around $900. Today’s pass holders also get to check two bags free of charge, a perk that used to be standard for all travelers.

The original AAirpass, as the Los Angeles Times explains in an enlightening piece that describes the experiences of several pass holders, was something else entirely. Introduced in 1981, it cost $250,000 and was a lifetime pass guaranteeing unlimited first-class travel. A companion pass cost another $150,000.

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What American discovered over the years is a lesson that every restaurant owner who offers an all-you-can-eat buffet must know: For some customers, “unlimited” really does mean unlimited.

How else can anyone explain the guy who flew 16 round trips to London in a 25-day period—flights that would have cost over $125,000 at full retail price? Or the pass holder who flew to 18 times in a single month in 2004? Or how travelers could have accumulated well over 30 million frequent flier miles, blowing away the 10-million-mile mark reached by George Clooney’s character in “Up in the Air”?

American started selling the passes as a means to raise big bucks on the quick, but over the years certain pass holders have gotten more out of the airline than the airline has gotten out of them. So said one former executive to the LA Times:

“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.”

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Pass prices were raised over time—to $600K in 1990, and up over $1 milllion by 1993. The pass was discontinued soon thereafter, but then made a brief reappearance in 2004, when it was available via the Neiman-Marcus catalog for $3 million. (Not a single person bit.)

As for the seriously frequent fliers who snagged passes in the early days at what now appear to be bargain-basement prices, American Airlines has lost millions of dollars on them. A few years ago, the airline went so far as to start investigating customers who take the most advantage of their passes for fraud, eager for any reason to cancel their passes and stop the flight free-for-all.

In what may seem like sour grapes over selling a product that ultimately caused American to lose big bucks, passes have been revoked from customers accused of selling usage of their passes to other travelers, and multiple lawsuits have been filed.

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American doesn’t have to worry about members of the modern-day AAirpass system taking too much advantage of their passes. The airline collects money each time a pass holder flies, so it actually encourages these fliers to fly as frequently as possible.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

1 comments
factorydirectlanyards
factorydirectlanyards

JUst like a big company . BUt if I hardly fly - you wouldn't complain ..........