How one man cost American Airlines £21M using his lifetime first class air pass  

The very idea of possessing an air pass that allows the holder unlimited first class travel for life on one of the world’s largest airlines would sound wonderful to many of us. That is exactly the privilege for which a small group of individuals paid American Airlines $250,000 each back in the 1980s. Despite the high initial investment required to purchase the air pass, one individual managed to rack up over 30 million miles of flight miles and take over 10,000 first-class flights during the twenty years he held his pass – until the airline revoked it, citing fraudulent misuse that had supposedly cost the airline over $21 million. 

In this article, AeroTime examines the remarkable story of Steven Rothstein, a Chicago-based investment banker who did just that. However, with Rothstein’s use of the air pass far surpassing any levels that the airline could have predicted, both parties would end up in a legal case against each other that would take over 12 months to resolve, racking up further costs on both sides.  

Throughout this staggering story, in a course of events that simply could not be repeated in the modern age, both parties fought their case. Once you reach the end of this article, it will be up to you to decide who came out on top, and who suffered the most from American Airlines’ decision to sell the ultimate in air travel ‘golden tickets’. 

Curimedia / Wikimedia CommonsBackground 

In the early 1980s, American Airlines, already established as one of the world’s largest carriers, was struggling financially. High fuel prices, an aging fleet of inefficient aircraft, and increased competition following the deregulation of the US air travel industry in 1978 led the Fort Worth, Texas-based airline to take unprecedented measures in an attempt to stave off a Chapter 11 bankruptcy filing in the US courts.  

One of the steps taken by the airline was to offer a special air pass, branded by the company as its ‘AAirpass’ scheme. Such schemes were fairly commonplace in the US airline industry at the time, with many carriers offering either a fixed number of flights across their networks for a fixed fee, or else unlimited flights within a restricted timescale, but again for a fixed one-off initial fare.  

However, in 1981, with a financial crisis looming and a need to raise cash quickly, American Airlines elevated its AAirpass scheme to the next level. For a one-off fee of $250,000 (around $750,000 at current values), customers could purchase a special air pass that would allow for unlimited first class travel on American Airlines-operated flights for life. 

Felix Goetting / Wikimedia CommonsAt a time long before direct online bookings would become possible, holders of the special AAirpass would simply call a dedicated telephone number for the American Airlines Platinum Executive reservations department to book flights. Importantly, no identification was needed to either book the flights or even to travel, as ID was not required to be presented upon check-in as it is nowadays. These points would become crucial in the eventual legal outcome of this story.  

Between 1981 and 1988, 66 individuals purchased these ‘golden ticket’ air passes, netting the airline a very useful $16.5 million in cash, equivalent to almost $50 million in 2025. Passholders earned frequent flier miles on every trip and even got a lifetime membership to the Admirals Club, American Airlines’ network of airport VIP lounges.  

As he spent much of his professional life traveling, the opportunity to purchase an unlimited first-class air pass on one of his preferred carriers seemed too good to pass up for 37-year-old Chicago businessman Steven Rothstein. He bought his American Airlines unlimited first class AAirpass in 1987, stumping up the $250,000 initial fee for the privilege of flying in luxury every time he stepped onto an American Airlines aircraft. Rothstein was later described by his wife Nancy as someone who “got on a plane like most people get on a bus”, and his forking out for the special air pass would turn out to be a no-brainer, despite its high initial cost.  

Aero Icarus / Wikimedia CommonsHaving held his own first class AAirpass for two years, in 1989 Rothstein would invest another $150,000 (around $450,000 today) for a companion AAirpass, which would allow a fellow traveler to fly with him in first class on American Airlines flights. However, using his business acumen, Rothstein negotiated with the airline so that the companion AAirpass could be used on either the same flight as the one he had booked or the one immediately before or after. Again, this would become significant in terms of how the story would end.  

Using his air pass to the full 

Using his first class AAirpass, Rothstein would travel multiple times every month. Between 1987 and 2008, he took around 10,000 flights, averaging out at 476 per year – more than one flight every day – and the full cost of every flight he took was absorbed by the initial cost of the air pass.       

In an interview, Rothstein would later explain that he had only ever been given one rule by American Airlines when he bought his air pass: he could not give it to anyone else to use to book flights on the carrier. Again, this precise wording would become crucial in the litigation that would follow in later years.  

“When I bought the AAirpass, in no uncertain terms they told me that there was only one rule, which was that I couldn’t give anybody the AAirpass. And those were the days before they took identification from passengers,” he explained. When a work colleague at his investment bank offered Rothstein $5,000 per week to use the air pass, Rothstein refused, instead keeping to the rule that the airline had set out. 

Anthony92931 / Wikimedia CommonsWith his immensely prolific use of the air pass between 1987 and 2008, Rothstein is reported to have cost American Airlines an estimated $21 million in revenue that it could have otherwise made by selling the first-class seats he booked. Every single one of Rothstein’s flight reservations was made using the dedicated American Airlines Platinum Executive reservations line, and Rothstein himself became a familiar voice at the end of the telephone to those who worked at the carrier. One particular agent, Lorraine Cross, handled many of his bookings personally. 

During the period when he held the pass, Rothstein would often visit the same destination multiple times. He was even known to take a return flight between his Chicago base and Ontario so that he could pick up a sandwich in his favorite restaurant. 

Over the course of 21 years, Rothstein took – 

1,000 flights to New York City

500 flights to San Francisco 

500 flights to Los Angeles 

500 flights to London

120 flights to Tokyo 

80 flights to Paris 

80 flights to Sydney

50 flights to Hong Kong 

and roughly 7,000 flights to destinations across the rest of the world.
Following a chance meeting on a flight between the US and London with the charismatic Bob Crandall, the then-CEO of American Airlines, Rothstein would receive a personal letter from the airline boss thanking him for his custom and seemingly assuring him that the airline was happy for him to be using his air pass to the maximum. 

“I am delighted that you’ve enjoyed your AAirpass investment – you can count on us to keep the Company solid, and to honor the deal, far into the future.”  

Ken Fielding / ShutterstockAn abrupt ending

Rothstein carried on with his relentless flight schedule for more than two decades, crisscrossing the globe in the biggest seats and enjoying the best inflight service that American Airlines offered on its network at the time.  

Yet, this seemingly idyllic lifestyle was not to last. On December 13, 2008, Rothstein arrived at Chicago O’Hare Airport (ORD) along with a friend for what was supposed to be just another routine trip to Europe. He and his companion were checked in as normal and headed to the gate for their flight to London. However, upon arriving at the departure gate, Rothstein was handed a typed letter on American Airlines headed paper which read:  

“I write to inform you that, effective immediately, American Airlines, Inc., is hereby exercising its right to terminate your AAirpass Agreement dated October 1, 1987.”   

In an interview with The Guardian newspaper, Rothstein would later say, “I went into the ticket counter. I checked in my luggage for London. I walked to the gate and just as I was walking on the plane, they handed me a letter terminating the AAirpass. Why did they let me go to the gate? Why didn’t they tell me upfront, which would have been the nice thing to do?” 

Aeroprints / Wikimedia CommonsHowever, the fact that American Airlines had failed to be “nice” was just the start of things to come. The carrier would later launch legal proceedings against Rothstein – not for the number of flights he had taken, but for allegedly abusing the AAirpass scheme. According to American Airlines, the stockbroker had supposedly violated the terms of the AAirpass scheme by making a string of speculative bookings for non-existent passengers, and for allowing others, sometimes even strangers, to use tickets that he had booked to travel on American Airlines flights instead of him.  

Legal action follows 

Upon the withdrawal of his AAirpass, Rothstein duly sued American Airlines in the United States District Court for the Northern District of Illinois, for breach of contract and claimed damages worth $7 million. Rothstein argued that American Airlines had waived its rights to enforce the contract by acquiescing to his booking patterns and “not cracking down on his actions sooner”. He added that the carrier had breached the terms of the AAirpass agreement by withdrawing it without notice and terminating its lifelong benefits.  

However, undeterred by Rothstein’s legal action, American Airlines launched its own counterclaim against him. In its court filing, the company made an accusation of fraud against Rothstein, accusing him of booking seats for non-existent passengers under false names such as ‘Bag Rothstein‘ and ‘Steven Rothstein Jr’ so that he could ensure that the seat next to him would always be vacant for privacy or to use for extra carry-on luggage. It alleged he also had a history of approaching strangers at the gate and offering them a free upgrade to travel on his first-class companion ticket, or simply booking tickets for flights he was never planning to board.   

JetPix / Wikimedia CommonsIn the ensuing legal action and the investigations that followed, it emerged that Rothstein had either canceled or ‘no-showed’ for 84% of the reservations he had made between May 2005 to December 2008. The airline also alleged that he had used his AAirpass to make companion reservations for at least 41 flight sectors between December 2003 and April 2004 without taking ultimately them up, leaving empty seats on airplanes.  

According to another court document, American contended that out of 3,009 flight sectors booked from August 2006 to November 2008, 14 were considered fraudulent under the airline’s alleged terms. However, Rothstein argued that he had never been notified that they were considered fraudulent at the time they were made. 

Rothstein’s defense  

In his defense, Rothstein claimed that by failing to take action against him for his booking behavior, the airline had simply acquiesced to his actions and had “condoned his booking companion seats under fictitious names for years”. He also argued that every single reservation he had ever made was placed directly with a paid American Airlines employee, and that at no time had any related concerns or misgivings been raised with him.  

The investigation even interviewed those who staffed the phone reservations lines at the airline’s reservations center, including Lorraine Cross. In her deposition, Cross stated that she had not received any written directions from American Airlines regarding what was and was not deemed to be acceptable practice for making reservations for the Executive Platinum AAirpass customers. Cross claimed she did not suspect any misuse of the AAirpass in Rothstein’s name.  

During the legal proceedings, Rothstein admitted to offering up his ticket to those in need on numerous occasions throughout the 20+ years he held the unlimited flights AAirpass. However, he explained this by saying that he had simply been doing good deeds by booking tickets on behalf of people he was in a position to help. He insisted that his actions had not breached the single rule of the air pass – of not “giving it to others” – in the way he had interpreted the rule.  

JetPix / Wikimedia CommonsSpeaking to Forbes in a 2019 interview, Rothstein said, “I gave a man in Seattle a ticket to go to his father’s funeral. I also gave many people tickets to visit ill family members. I do not view that as philanthropy, I view that simply as a good deed.” 

On a sadder note, in a 2019 Guardian article Rothstein’s daughter Caroline explained the reason behind her father booking over 2,000 empty flight seats while he held his AAirpass  This, she suggested, was a way Rothstein used to cope with the trauma that resulted from the death of his teenage son Josh, who had been fatally injured in a car collision while walking down the street in 2002.  

Steven explained in court papers: “When everyone was asleep in the house, and I had nobody to talk to, and I was lonely about Josh’s death, I would telephone American Airlines reservations and speak to the agents about who knows what for an hour and then at the end, they’d ask me, oh, what reservation was I calling about to make, and I would say, ‘Oh yeah, I need to go to San Francisco next week’. I didn’t really need to go to San Francisco. I was just very confused and very lonely, and I was calling American Airlines because they were logical people for me to speak to. They knew me. I knew them. I knew their names. I knew their lives.” 

The litigation between the parties was delayed throughout 2011 and 2012 – ironically, because of Chapter 11 bankruptcy proceedings involving American Airlines, the very outcome for which the unlimited lifetime AAirpass had been launched to avoid some thirty years previously.  

Aeroprints / Wikimedia CommonsSettlement 

Eventually, in late 2012, as American Airlines emerged from Chapter 11 bankruptcy protection but with the legal action with Rothstein still rumbling on and with legal costs rising, the parties came to an out-of-court settlement, although the full details were prejudiced (not allowed to be disclosed by any party) and have remained so ever since. All further action was dropped by both sides and Rothstein and American Airlines walked away from the whole saga.   

That should have been the end of the story, yet Rothstein was not the only AAirpass holder to have their ticket revoked. Another customer, Jacques E. Vroom Jr, a Dallas-based marketing executive, paid $356,000 for his unlimited AAirpass and companion pass in December 1989. Vroom traveled nearly 38 million miles on American Airlines flights until July 2008. Allegedly, he used his AAirpass to attend all his son’s college football games in Maine and built up so many frequent flier miles that he would give them away, often to AIDS sufferers so that they could visit family. It was said that he flew so frequently that many American Airlines crew members knew Vroom by name. 

Aero Icarus / Wikimedia CommonsHowever, while checking in at London-Heathrow Airport (LHR) on July 30, 2008, Vroom was handed a letter by airline staff informing him that his passes had been terminated due to fraudulent activity. The airline sued Vroom in 2011, accusing him of selling his companion seat, which amounted to a violation of the American Airlines AAirpass rules that were republished in 1994.  

However, Vroom immediately countersued the carrier, arguing that the rule went into effect after the purchase of his lifetime pass and had no legal effect, He also sued the airline for slander, by bringing his name into disrepute in the eyes of the public. At the time of writing, this litigation still appears to be ongoing, with neither claim nor counterclaim having ever been resolved.     

Conclusion  

While American Airlines thought that the unlimited first class lifetime AAirpass would be a quick-win money-making scheme to help it avoid bankruptcy (which it initially did), it clearly did not account for the likes of passengers such as Rothstein and Vroom who made full use of the program for their benefit, but ultimately to the detriment of the carrier.  

Basic mathematics shows that these two customers alone cost American Airlines more than it ever made by selling the AAirpasses to begin with. Fortunately for Rothstein and Vroom, but unfortunately for the airline, it took the carrier years to figure out that these two customers alone were costing it millions of dollars annually. 

Airbus airplanes / ShutterstockSpeaking years later to the Los Angeles Times about the AAirpass scheme, Bob Crandall, the American Airlines CEO between 1985 and 1998, explained: “We thought originally it would be something that companies would buy for their top employees. It soon became apparent that the public was smarter than we were.” 

While the first-class unlimited travel AAirpass was discontinued by American Airlines in 1994, a revamped version appeared for sale ten years later. In 2004, the carrier offered an unlimited first class AAirpass one last time, in the Neiman-Marcus (a US-based department store chain) Christmas catalog. It was priced at $3 million per individual pass, plus $2 million extra for a companion pass. None were sold. 

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