American’s dire situation, and an extravagant and wildly creative ultimate frequent flyer pass that may have contributed to it, have made world headlines.
Readers have been astounded by a widely circulated story originating in the Los Angeles Times, which details how American designed and sold lifetime “first-class-tickets-to-anywhere-forever” passes in the 1980s for USD250,000 each. Buyers could also buy companion tickets to fly anyone they chose along with them, first class – forever.
Some of the people who bought the passes (all men, reportedly) really did start flying everywhere, all the time, sometimes picking random people out of check-in queues and giving them first-class upgrades just to show they could. One pass holder was costing American more than USD1 million a year as he flew to Japan to pick up sushi for lunch and then jetted back to the US in the evening.
Another of the pass holders, with the memorable surname Vroom, built up so many frequent flier miles he would give them away, often to AIDS sufferers so they could visit their families. When American realised the passes had got completely out of control, it battled to restrict their use, but apparently with little success.
Although it wasn’t people like Vroom who sent American to Chapter 11, the story reveals the corporate culture at the airline in earlier decades.
Back in the present day, American’s parent company AMR Corp says that the company has agreed with its bankruptcy creditors to develop “potential consolidation scenarios” – which could include mergers.
US Airways is pressing for merger talks, according to America’s Huffington Post, although AMR chief executive Thomas Horton has reiterated that he wants American to emerge from bankruptcy protection as an independent company.
American is the third-largest airline in the US. Hundreds of its pilots and other employees marched into AMR headquarters in Fort Worth, Texas, and in New York last week to deliver a message of no confidence in AMR management.
Talks on a merger continue and US Airways is still the most likely suitor. Whatever the outcome and prospects for American, the airline is unlikely to be releasing any more lifetime first-class air passes.
Written by : Peter Needham