When A Corporation Trusts Too Much: The Saga of the Unlimited AAirpass

If you sell this guy a ticket to your all-you-can-eat buffet and he eats the table, is he at fault, or are you?

A strange subplot of the American Airlines bankruptcy is the saga of its unlimited AAirpass, a special deal offered by the airline in 1981. The company sold passes for a lifetime of free and unlimited First Class travel with no limitations at a price of $250,000. An additional $150,000 permitted AAirpass customers to buy one “companion ticket” that would let one person—anyone— accompany them on any flight, anywhere, again, for life.

Apparently eschewing competent market research—and you wondered why this airline went belly up?—American assumed that the lifetime luxury travel passes would be bought by corporations for their high-flying employees. But no; the purchasers were almost all very rich people with a lot of time on their hands. As designed, American got a quick influx of cash, but at an unacceptable and strangely unanticipated cost: the AAirpasses placed the company at the mercy of  few profligate travelers who exploited American’s carelessness to the edge of absurdity, thereby raising a fascinating ethical question: If someone lets you have the right to ruin them, is it ethical to do it?

Some of the holders of the AA super-ticket flew everywhere and anywhere, almost daily, They would lunch in Paris and have dinner in Jakarta, just for the hell of it. They clogged up reservation lists on popular flights by making multiple advance bookings just in case they decided to fly to London for some fish and chips, cancelling at the last minute…or not, without penalty. Sometimes they would pull strangers out of the check-in lines and tell them to cancel their own coach tickets, so they could sit next to them in First Class. Meanwhile, they amassed an incredible number of frequent flyer miles, and used them for more free tickets. What American had done, it eventually became evident, was the equivalent of letting the ultimate glutton, a never-sleeping combination of Henry the Eighth, Mr. Creosote from “Monty Python’s The Meaning of Life,” and competitive eating champion Joey Chestnut, a pass to the all-you-can-eat buffet. Two of the Frequent Fliers From Hell were costing the airline over a million dollars a year each.

The Los Angeles Times interviewed several of American’s legal free-loaders. One was retired bond broker Willard May of Round Rock, Texas. After his regular income dried up, May used his AAirpass as a personal golden goose. He began letting a Dallas couple back use his pass and his companion ticket to fly back and forth to Europe for $2,000 a month. “For years, that was all the flying I did,” May told the Times. “It’s how I got the bills paid.”

As its red ink deepened. American’s desperation response to the drain on its resources caused by the Travel Pigs (one of them was named Vroom. How dumb do you have to be to sell a lifetime airpass to someone named “Vroom?”) was to get their lawyers to devise theories for the company to void the passes for abuse, and to hire private investigators to try to catch them at doing something fraudulent. American began suing and harassing some of the most enthusiastic fliers, after other tactics, like having its CEO call them up and beg them to sell their AAirpass back, failed. In a few cases, like that of May, they cancelled the passes, claiming fraud.

The story shows that American was the victim of its own incompetence and carelessness. The percentage of fanatics and eccentrics  in America is fairly apparent; it is astounding that the company didn’t include in its business calculations the near certainty that some purchasers of the lifetime pass would abuse it, and failed to write in some restrictions specifically prohibiting sales and ticket transfers. Does that excuse the conduct of the abusers, however?

When I started writing this post, my assumption was that it did not, and that the AAirpass purchasers who turned the special tickets into tickets to a lifetime of fantasy travel were willful and mean-spirited travel vampires who enjoyed sucking American dry. That last paragraph changed my mind. It is reasonable to expect that business people know their business. I have a lifetime pass to a gym, and I haven’t used it since 2000. I’m sure there are some other purchasers of the same deal that virtually live at the gym, but that flabby and lazy people like me outnumber muscle-heads like him, and on balance, the company has made money. If it didn’t, it isn’t the gym rat’s duty to watch out for the company’s bottom line, or calibrate his own conduct to minimize the consequences of the gym’s bad business sense. Upon reflection, the same principle applies to American, and its million dollar-a-year flyers like Mr. Vroom. He was not acting unethically by presuming that American knew, when it offered the AAirpasses for sale, that there would be people like him, and that they calculated the price of the lifetime tickets accordingly. If he did not intentionally use his ticket to speed the airline to bankruptcy, for that would be unquestionably unethical, then he is within ethical boundaries. Vroom used the frequent flyer miles to get tickets for AIDS patients to visit their families; he doesn’t seem like such a bad guy. It doesn’t appear that any of the AAirpass holders were trying to harm anyone, and if American Airlines knew their own business, they wouldn’t have been hurt.

I cannot fault the airline for trying to cancel the tickets of those it regards as abusers, however. Even at all-you-can-eat buffets, the establishment will sometimes tell a glutton, “That’s all you can eat.” American was successful in persuading some courts to agree that AAirpass holders were violating the implicit terms of their too-generous deals, and those purchasers could hardly argue that they hadn’t received their money’s worth. There is no ethical obligation to avoid trying to control the damage caused by one’s own foolishness, including taking reasonable steps to stop others from exploiting it.

__________________________________________

Pointer: Boing Boing

Facts: LA Times

Graphic: Foodists

Ethics Alarms attempts to give proper attribution and credit to all sources of facts, analysis and other assistance that go into its blog posts. If you are aware of one I missed, or believe your own work was used in any way without proper attribution, please contact me, Jack Marshall, at  jamproethics@verizon.net.

 

One thought on “When A Corporation Trusts Too Much: The Saga of the Unlimited AAirpass

  1. I think this is fascinating. No restrictions for a lifetime. I’d be happy finding a movie ticket like that…. but an airline? I would have loved this as a gift for my 1st birthday in 1981.

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