WEBVTT - Short Stuff: AAirpass 0:00:04.200 --> 0:00:07.440 Hey, and welcome to the short stuff. I'm Josh, there's Chuck. 0:00:07.680 --> 0:00:11.080 Jerry is absent, but we're still making do We're muddling 0:00:11.160 --> 0:00:14.680 through with short stuff. Like I said, I said it twice, 0:00:14.680 --> 0:00:17.599 which was redundant, and as everyone knows, that's a huge 0:00:17.640 --> 0:00:19.720 waste of time and short stuff. So we're gonna have 0:00:19.760 --> 0:00:22.079 to cut out a few facts. That's right. But the 0:00:22.120 --> 0:00:24.319 first thing we need to do is decide on what 0:00:24.400 --> 0:00:26.920 we call this thing. Do you know what they called it? 0:00:27.480 --> 0:00:31.800 Who's they? American Airlines? Oh? Like, like, is do you 0:00:31.800 --> 0:00:34.960 pronounce both a's? I don't know, and I don't think so. 0:00:35.320 --> 0:00:38.040 I think that was more just for looks, So it's 0:00:38.080 --> 0:00:44.280 a air pass. No, I think it's just air pass. Well, 0:00:44.560 --> 0:00:46.640 just so people don't think we're crazy, what we're talking 0:00:46.680 --> 0:00:50.960 about is a program where American Airlines wanted to uh 0:00:51.080 --> 0:00:55.560 and did in fact sell people lifetime tickets unlimited first 0:00:55.560 --> 0:01:00.760 class travel. And they called it a a r P, 0:01:01.000 --> 0:01:03.080 A S S. And I just don't know whether to 0:01:03.120 --> 0:01:05.560 call it double a air pass or a a air 0:01:05.600 --> 0:01:07.920 baths or a air baths. I like the way I 0:01:07.959 --> 0:01:14.400 said it the most. It's got a little mustard on it. Yeah. Well, 0:01:14.400 --> 0:01:18.080 we'll call it air pass, Okay, cool? So so yeah, 0:01:18.360 --> 0:01:21.919 like I think about this for a second, unlimited first 0:01:21.959 --> 0:01:24.720 class travel for the rest of your life. Anytime you 0:01:24.720 --> 0:01:27.680 want to fly anywhere, you just show up, flash your card, 0:01:28.000 --> 0:01:29.800 get on the plane. I think you had to book 0:01:29.920 --> 0:01:32.880 first or whatever. But in addition to that, you also 0:01:33.040 --> 0:01:36.520 had you got frequent Flyer miles as if you needed them, 0:01:36.560 --> 0:01:38.600 that you would rack up with each flight. You also 0:01:38.640 --> 0:01:41.399 had a lifetime membership to the Admiral's Club, which was 0:01:41.480 --> 0:01:45.920 Triple M or American Airlines UM said their lounge or whatever. 0:01:46.120 --> 0:01:49.840 I guess sky club is what you call it. But yeah, yeah, 0:01:49.840 --> 0:01:53.000 they're lounges there v I P Lounge at the airports. UM. 0:01:53.080 --> 0:01:55.640 So you can have a pretty cushy experience, you know 0:01:55.720 --> 0:01:58.640 with this thing. The thing is is not everybody could 0:01:58.680 --> 0:02:02.080 afford it. Um. There was a very expensive thing to 0:02:02.160 --> 0:02:05.080 buy at the time and remained such as long as 0:02:05.080 --> 0:02:09.240 they were selling it for until I think yeah, so, 0:02:09.639 --> 0:02:11.280 I guess we should point out the reason they did 0:02:11.320 --> 0:02:13.440 this was because there was a time in the nineteen 0:02:13.520 --> 0:02:17.519 seventies in the early eighties where air travel was not 0:02:17.560 --> 0:02:19.840 doing so great. The airlines were suffering in a lot 0:02:19.840 --> 0:02:24.519 of ways. Uh, their revenues were way down, and they 0:02:24.560 --> 0:02:28.519 said there was a Deregulation Act of nineteen seventy eight 0:02:28.560 --> 0:02:31.880 and American Airlines actually posted a seventy six million dollar 0:02:31.960 --> 0:02:35.000 loss in nineteen eighty. So they're like, we gotta do 0:02:35.080 --> 0:02:37.280 something here. Why don't we see if there are some 0:02:37.400 --> 0:02:41.280 rich people out there that would buy into this deal? 0:02:41.680 --> 0:02:45.239 And there were, Yeah, I mean, rather than go borrow 0:02:45.240 --> 0:02:47.919 at the market, like, interest rates were really really high, 0:02:48.040 --> 0:02:50.200 so they made a lot of sense to just go 0:02:50.320 --> 0:02:52.520 turn to consumers and say, hey, you want to basically 0:02:52.560 --> 0:02:56.440 prepay for a lifetime of first class travel. And they 0:02:56.480 --> 0:02:59.160 figured that probably like they could go to you know, 0:02:59.480 --> 0:03:02.160 um really well healed firms to say, hey, you've got 0:03:02.200 --> 0:03:04.400 some top employees who fly a lot, this actually would 0:03:04.400 --> 0:03:07.280 probably make sense. And I think they were successful in 0:03:07.320 --> 0:03:11.000 that in that respect. But some famous people bought it too. 0:03:11.160 --> 0:03:15.360 Willie Mays had one, Mark Mark Cuban still has his. 0:03:15.560 --> 0:03:18.120 He said it was the one of the best purchases 0:03:18.160 --> 0:03:22.560 he's ever made. Um. Michael Dell, founder of Dell Computers, 0:03:22.600 --> 0:03:26.480 had one. Um or still may um And ultimately twenty 0:03:26.520 --> 0:03:30.160 eight people bought into this thing, which cost at at 0:03:30.240 --> 0:03:33.800 the beginning when they started offering two hundred and fifty 0:03:33.840 --> 0:03:37.160 thousand dollars, and then you could add a companion pass 0:03:37.200 --> 0:03:40.320 for another hundred and fifty thousand dollars. Yeah, so let's 0:03:40.400 --> 0:03:43.240 let's talk about the money for a minute. Um to 0:03:43.520 --> 0:03:48.120 fifty plus one fifty is four hundred thousand dollars. That's 0:03:48.120 --> 0:03:52.200 a lot of money, to be sure. But if you've 0:03:52.240 --> 0:03:55.120 got some dough and you like to travel or have 0:03:55.280 --> 0:03:58.760 to travel, it's a great deal. Yeah, it really is. 0:03:58.840 --> 0:04:01.200 It's a fantastic deal, be because if you travel enough, 0:04:01.240 --> 0:04:04.800 this thing's going to pay for itself potentially within just 0:04:04.840 --> 0:04:07.200 a few years, depending on how much you travel, and 0:04:07.240 --> 0:04:10.559 if you travel a lot, like you're a super traveler, 0:04:11.000 --> 0:04:13.520 you could conceivably make this thing pay for itself within 0:04:13.520 --> 0:04:17.240 a single year. Yeah. So that's the first offerers they 0:04:17.320 --> 0:04:19.800 laid out there, two and fifty grand plus one fifty 0:04:19.839 --> 0:04:23.760 for the companion. They realized, wow, we didn't charge enough. 0:04:24.279 --> 0:04:28.480 So eight o nine years later they said, all right, 0:04:28.480 --> 0:04:33.040 how about six hundred thousand dollars including the companion, So 0:04:33.120 --> 0:04:36.200 that's an extra two grand. Then a nine and ninety 0:04:36.279 --> 0:04:39.640 three they bumped it to one point zero one million. Yeah, 0:04:39.640 --> 0:04:43.280 that extras was super important at that point. I think 0:04:43.279 --> 0:04:45.400 they were. They must have been doing some really specific 0:04:45.480 --> 0:04:47.480 math to come to that though, right I would. I 0:04:47.520 --> 0:04:49.479 would guess though, like no one in the history of 0:04:49.480 --> 0:04:52.080 the world has ever charged one point zero one million 0:04:52.120 --> 0:04:56.960 dollars for anything. It's weird. Uh. And then I think 0:04:57.000 --> 0:05:00.599 at the very end, and two, I can't believe this 0:05:00.680 --> 0:05:04.800 lasted this long. And two thousand four their final offering 0:05:05.760 --> 0:05:09.360 was in a Nieman Marcus catalog at three million bucks 0:05:09.400 --> 0:05:12.400 plus two mill for your companion. Yeah. And in between 0:05:13.360 --> 0:05:15.640 two thousand four they just stopped offering it all together. 0:05:15.680 --> 0:05:17.680 But they trotted it out back one more time in 0:05:17.720 --> 0:05:21.600 two thousand four for that Christmas catalog, but nobody bought it. 0:05:21.800 --> 0:05:23.400 As far as I know, no one bought it, So 0:05:23.440 --> 0:05:26.040 I think the number that I ran across, so there's 0:05:26.040 --> 0:05:28.760 some really good articles on this. There's one by Zachary 0:05:28.800 --> 0:05:34.120 Crockett on The Hustle. Uh. There's another one by Ken 0:05:34.600 --> 0:05:38.599 Benzinger from the Los Angeles Times. And the number that 0:05:38.680 --> 0:05:41.640 I saw is twenty eight. There's twenty eight people who 0:05:41.720 --> 0:05:45.200 ever bought a air pass, a double a air pass? 0:05:45.800 --> 0:05:50.560 How many to eight or I'm surprised it wasn't more, 0:05:50.680 --> 0:05:52.560 to be Frank, I'm a little surprised too. And the 0:05:52.839 --> 0:05:54.479 thing is that some of these people bought it, and 0:05:54.520 --> 0:05:57.200 I think really didn't get their money it's worth out 0:05:57.240 --> 0:05:59.120 of it. But then there were a couple of people, 0:05:59.200 --> 0:06:01.719 there were a few people, a small handful, who got 0:06:01.800 --> 0:06:04.800 so much of their money out of it that American 0:06:04.839 --> 0:06:07.800 Airlines said, uh, we can't take this. Remember how we 0:06:07.800 --> 0:06:10.880 said that you had a lifetime pass were we we 0:06:10.480 --> 0:06:13.719 were going back on that deal. And I think we 0:06:13.720 --> 0:06:15.240 should take a break and then we'll talk about those 0:06:15.279 --> 0:06:18.240 guys right after this. Okay, let's do it. M M 0:06:36.760 --> 0:06:41.880 all right, Chuck, Let's talk about Jacques Room and Stephen Rothstein. Yeah. 0:06:41.880 --> 0:06:44.240 So these were a couple of people who became pretty 0:06:44.279 --> 0:06:46.839 prominent in this whole. Almost called it a scam because 0:06:46.920 --> 0:06:49.880 somehow it seems like it it's got a flavor to it. 0:06:49.960 --> 0:06:55.599 For sure it does. So Stephen Rothstein, he bought his pass. Uh. 0:06:55.640 --> 0:06:58.599 He was an investment banker for bear Stearns. Uh. And 0:06:58.640 --> 0:07:00.760 then there was Jacques Room, like you said, and he 0:07:00.839 --> 0:07:04.599 was a direct marketing catalog consultant. He actually took out 0:07:04.640 --> 0:07:07.640 a loan, four thousand dollar loan at twelve percent interest 0:07:07.680 --> 0:07:11.520 over five years to get his AN eighty nine. And 0:07:11.640 --> 0:07:16.520 these guys, boy did they travel. Yeah. Yeah. They both 0:07:16.560 --> 0:07:20.200 made fun of something that that part in um Up 0:07:20.200 --> 0:07:22.920 in the Air where George Clooney gets congratulated for hitting 0:07:22.920 --> 0:07:25.760 the ten million mile mark. They just both kind of 0:07:25.800 --> 0:07:27.920 scoffed at it. They're like, we don't even remember when 0:07:27.960 --> 0:07:30.080 we hit that mark. Yeah, they hit that by like 0:07:30.200 --> 0:07:33.160 July of the first year. Basically, I think one of them. 0:07:33.200 --> 0:07:38.080 I think Room has an estimated thirty eight million miles 0:07:38.120 --> 0:07:42.680 traveled to his name, and Rothstein has about thirty million. Yeah, 0:07:42.720 --> 0:07:44.520 that's a lot of miles. And you would think, like, 0:07:45.120 --> 0:07:47.800 even if you like to travel, you can't go on 0:07:47.880 --> 0:07:51.960 that many trips and like vacations and things. So and 0:07:52.040 --> 0:07:54.480 you're kind of right, But here's what some some of 0:07:54.480 --> 0:07:57.640 the things these guys were doing. Like Room was like, 0:07:58.200 --> 0:08:00.800 you know what, I need a babysitter here in Dallas. 0:08:01.360 --> 0:08:04.360 Uh So I'm gonna fly to Washington, d C. And 0:08:04.400 --> 0:08:06.440 pick up my father in law, bring him back here 0:08:06.480 --> 0:08:08.680 so he can babysit tonight and I'll just fly him 0:08:08.680 --> 0:08:11.080 back afterwards. That's exactly what he would do. Yeah, he 0:08:11.160 --> 0:08:14.280 once he once flew to London to get two tires 0:08:14.280 --> 0:08:17.240 for his motorcycle because it was cheaper than paying for 0:08:17.280 --> 0:08:21.200 the freight shipping. Let me see here, July two thousand four. 0:08:21.600 --> 0:08:28.720 In one month, Rosteen flew eighteen times to places like Nova, Scotia, Miami, London, 0:08:28.880 --> 0:08:32.240 Los Angeles, Maine, Fort Lauderdale, New York. Yeah, and so 0:08:32.480 --> 0:08:36.360 like this was like flying for these guys was a lifestyle, 0:08:36.440 --> 0:08:38.480 like it was part of their life. It was actually 0:08:38.520 --> 0:08:40.520 kind of like the center of their life. They both 0:08:40.559 --> 0:08:43.679 have families, but they both had families that knew that 0:08:44.000 --> 0:08:46.280 they were going to be probably in a different country 0:08:46.520 --> 0:08:48.160 just about every day of the week. It was just 0:08:48.280 --> 0:08:51.880 what they did. And so American had not planned for 0:08:52.000 --> 0:08:54.640 guys like this to buy the air pass. This was 0:08:54.720 --> 0:08:57.600 not part of the original plan. UM. So when they 0:08:57.640 --> 0:09:01.880 started to realize that Room and Stein were each each 0:09:02.320 --> 0:09:06.200 costing them about a million dollars a year in travel, 0:09:07.120 --> 0:09:09.360 they decided that they needed to find a way to 0:09:09.440 --> 0:09:13.360 basically cancel their air passes. And so they got an 0:09:13.360 --> 0:09:19.880 elite task force on this, the UM the Revenue Integrity Team, 0:09:19.920 --> 0:09:21.600 and said, go find a way to get rid of 0:09:21.600 --> 0:09:24.839 these guys passes. Yeah, because there are obviously rules, but 0:09:24.960 --> 0:09:27.800 not enough because they were doing things and it wasn't 0:09:27.840 --> 0:09:29.720 just them. There were other people in the program doing 0:09:29.760 --> 0:09:33.520 things like booking multiple trips in case like their one 0:09:33.600 --> 0:09:37.120 vacation didn't work out, or they changed their plans last minute, 0:09:37.160 --> 0:09:39.560 they could just jet on over to Paris instead of Hawaii, 0:09:40.200 --> 0:09:43.559 or I don't really like flying with anybody, so I'm 0:09:43.559 --> 0:09:46.480 just gonna book my companion seat to be empty on 0:09:46.559 --> 0:09:49.439 every single trip, exactly. Yeah, and again basically what I 0:09:49.480 --> 0:09:51.800 would do, yes, right, what what a lot of people 0:09:51.840 --> 0:09:53.640 would do. And they were definitely not the only ones 0:09:53.720 --> 0:09:56.640 doing this, and from from you know, the rules that 0:09:56.720 --> 0:09:59.880 A had, it was not against the rules. A didn't 0:10:00.040 --> 0:10:03.080 like it because they couldn't sell that seat and they 0:10:03.200 --> 0:10:05.760 you know, UM had trouble filling a seat when it 0:10:05.840 --> 0:10:08.000 was you know, their extra flights were canceled at the 0:10:08.080 --> 0:10:11.400 last minute, UM because these people didn't pay cancelation fees. 0:10:11.760 --> 0:10:14.480 So but there there wasn't anything they could get them on. 0:10:14.679 --> 0:10:17.280 The one that they went after, these guys four was 0:10:17.480 --> 0:10:21.520 selling their extra companion pass and it turns out like 0:10:21.559 --> 0:10:24.080 they both did. They both gave away their companion passes 0:10:24.080 --> 0:10:27.720 to total strangers pretty frequently. UM, Room had a habit 0:10:27.840 --> 0:10:32.000 of finding people who suffered from AIDS, HIV AIDS, and 0:10:32.040 --> 0:10:34.559 this is back in like the eighties and nineties, um, 0:10:34.600 --> 0:10:37.760 when it was a totally different jam. And he said, 0:10:37.880 --> 0:10:39.800 you know, hey, let me let me fly with you 0:10:39.840 --> 0:10:42.120 and you can go see your family for free. But 0:10:42.200 --> 0:10:45.760 they also they it really is. They also definitely sold 0:10:45.800 --> 0:10:50.439 them to Room made a hundred grand alone from just 0:10:50.600 --> 0:10:53.960 one couple or one couple alone paid him that much 0:10:54.440 --> 0:10:57.240 UM to shuttle them back and forth to Europe. So 0:10:57.280 --> 0:10:59.600 they were both definitely making money off of this on 0:10:59.640 --> 0:11:03.400 the side too, And that's what American went after him for. Yeah, 0:11:03.440 --> 0:11:05.920 I mean it sounds like for that one couple he 0:11:05.960 --> 0:11:08.400 was just acting as their de facto travel agent at 0:11:08.440 --> 0:11:13.080 one point. Yeah, and almost travel agent slash escort too. Yeah, 0:11:13.160 --> 0:11:14.840 I'll fly well because he kind of had to fly 0:11:14.880 --> 0:11:17.720 with him, right, that's my understanding of it. Yeah, So 0:11:17.880 --> 0:11:20.560 if you read some of these articles, you can read 0:11:20.640 --> 0:11:24.840 from Caroline Rothstein, who was I believe his daughter, and 0:11:25.280 --> 0:11:27.800 she said, you know what, like my dad gets a 0:11:27.800 --> 0:11:31.640 bad rap um. Sure he sold some, but it's not 0:11:31.720 --> 0:11:33.480 like he was out there getting rich off this, and 0:11:33.520 --> 0:11:36.120 it's not like there was anything in the policy at all, 0:11:36.160 --> 0:11:39.040 saying they couldn't do it because they got the first version, 0:11:39.520 --> 0:11:42.080 which did didn't say anything about selling him. I guess 0:11:42.080 --> 0:11:45.319 they didn't think ahead. And then later and further subsequent 0:11:45.360 --> 0:11:47.480 contracts they pointed out that you couldn't do it. But 0:11:47.559 --> 0:11:49.760 she was like, they didn't break any rules even no, 0:11:49.920 --> 0:11:54.200 they didn't, and UM, so American just basically said, well, 0:11:54.679 --> 0:11:57.719 we still say you're you're you're abusing your passes and 0:11:57.760 --> 0:12:00.560 they terminated both of them, and so some law stuits, 0:12:00.640 --> 0:12:04.679 lawsuits started going back and forth. Um, and then Americans 0:12:04.720 --> 0:12:08.120 parent company filed bankruptcy and so from everything I could find, 0:12:08.440 --> 0:12:10.920 those lawsuits are now still sitting out there in like 0:12:11.080 --> 0:12:14.280 legal limbo. But neither man has their air pass anymore. 0:12:14.600 --> 0:12:16.960 And so you might say, you know, oh boo, who 0:12:17.120 --> 0:12:20.200 these guys made their money back many times over with 0:12:20.280 --> 0:12:22.480 all the travel they did, and you know, they kind 0:12:22.480 --> 0:12:24.880 of almost seemed like they took advantage of a a 0:12:25.080 --> 0:12:30.319 and played them for chumps. But Caroline Rothstein, Stephen Rothstein's daughter, says, like, 0:12:30.480 --> 0:12:34.120 my dad lived to travel, or lives to travel. I 0:12:34.160 --> 0:12:38.240 believe he's still alive. Um, and he he was basically 0:12:38.280 --> 0:12:41.960 lost his life when American took away his his air 0:12:42.000 --> 0:12:45.160 pass and much the same for Jacques room to Like, 0:12:45.240 --> 0:12:48.040 all that guy loved to do was travel. That was 0:12:48.080 --> 0:12:50.800 what he loved to do, and that's why one of 0:12:50.840 --> 0:12:53.760 the reasons he would travel so much. Yeah. I got 0:12:53.760 --> 0:12:56.720 a couple of feelings about that. One is, you, you 0:12:57.080 --> 0:12:59.640 make this deal with American Airlines, they should have honored 0:12:59.640 --> 0:13:02.640 it for life. Yeah. But the other also is like, 0:13:02.679 --> 0:13:06.040 these guys can still travel, they just gotta pay for it, right. Well, yeah, 0:13:06.040 --> 0:13:07.880 it's true. No, for sure, It's not like they're like 0:13:07.920 --> 0:13:11.679 not like right, I bet I bet they didn't fly 0:13:11.679 --> 0:13:14.440 American Airlines ever again, though I would guess not. But yeah, 0:13:14.480 --> 0:13:16.920 I just have the impression that was a very bitter 0:13:16.960 --> 0:13:19.480 pill for both of them, too small to swallow, and 0:13:19.520 --> 0:13:21.800 they both I think, feel like they were targeted because 0:13:21.840 --> 0:13:25.320 they were among the least wealthy air pass holders, so 0:13:25.360 --> 0:13:28.600 they made easy targets. But they were also probably among 0:13:28.679 --> 0:13:31.840 the two that were the um using it far and 0:13:31.880 --> 0:13:35.000 away the most too. So who knows, But as far 0:13:35.040 --> 0:13:38.520 as I know, it's not really resolved legally, but I'm 0:13:38.559 --> 0:13:42.000 guessing as far as American Airlines is concerned, it's done. 0:13:42.400 --> 0:13:45.240 You got anything else I got nothing else. I've never 0:13:45.280 --> 0:13:47.640 heard of this. It's super interesting. I love it. Uh. 0:13:47.720 --> 0:13:51.160 If you want to go learn more about this, go 0:13:51.280 --> 0:13:54.439 check out Zachary Crockett stuff. He as a writer I 0:13:54.480 --> 0:13:55.880 don't know if he still has or not, but a 0:13:55.880 --> 0:13:59.800 long time writer for Priceonomics and others, and he just 0:14:00.160 --> 0:14:03.240 really does a great job of finding really interesting stuff 0:14:03.240 --> 0:14:06.240 and writing about it. So UM, hats off to him, 0:14:06.280 --> 0:14:08.959 Hats off to the l A Times and to Caroline 0:14:09.040 --> 0:14:12.360 Rothstein for publishing all these great articles, and hats off 0:14:12.440 --> 0:14:18.559 to you for listening to short stuff Audios. Stuff you 0:14:18.559 --> 0:14:20.600 Should Know is a production of I Heart Radios How 0:14:20.600 --> 0:14:23.560 Stuff Works. For more podcasts for my Heart Radio, visit 0:14:23.560 --> 0:14:26.400 the iHeart Radio app, Apple Podcasts, or wherever you listen 0:14:26.480 --> 0:14:27.400 to your favorite shows.