Litigation was delayed due to the airline's filing for Chapter 11 bankruptcy.
Rothstein sued American Airlines in the United States District Court for the Northern District of Illinois, arguing that "American waived its rights to enforce the contract by not cracking down on Rothstein sooner" according to District Court Judge Virginia Mary Kendall who denied Rothstein's motion in 2011. A letter from the airline was hand-delivered to him at the airport informing him that the pass had been terminated due to fraudulent behavior, specifically his history of approaching passengers at the gate and offering them travel on his companion seat and for using the companion program to purchase an adjacent empty seat under a fake name to keep them vacant, which was often used for privacy or extra carry-on luggage. Then American Airlines CEO Robert Crandall wrote Rothstein a letter on 13 January 1998 saying "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." On December 13, 2008, Rothstein checked in at Chicago O'Hare International Airport with a friend for a flight to Bosnia. Rothstein negotiated additions to the contract, including a provision for his companion to fly on flights immediately before or after his flight. He added a $150,000 companion pass two years later. Steven Rothstein, a financier then from Chicago, upgraded to a lifetime AAirpass for $233,509.93 on October 1, 1987, after a discount of $16,490.07 for the value of mileage on a previous AAirpass.
The two AAirpass holders including their companion passes were terminated from the program when the airline accused them of fraudulent activity. The program has been called "a huge disaster" for the company.
#Airpass trend for free
The airline points to accumulation of air miles for flights which they received for free under the AAirpass, allowing some passengers to accumulate tens of millions of miles as well as taxes and airport fees paid for by the airline. The airline's investigators concluded that two AAirpass holders, Steven Rothstein and Jacques Vroom, were costing the airline more than $1 million annually. In 2007, during a period of financial instability for the airline, American Airlines assigned a "revenue integrity unit" to investigate AAirpass holders. The airline ended sales of the unlimited passes in 1994 except for a one-time offer in the 2004 Neiman Marcus Christmas catalog at a price of $3 million (equivalent to $4,303,911 in 2021) for the pass and $2 million for a companion pass none were sold.
The program was launched at a time when the airline was struggling financially and in need of a quick infusion of cash. A total of 66 AAirpasses are reported to have been sold under the unlimited travel conditions, with businessman Michael Dell, baseball player Willie Mays, and America's Cup-winner Dennis Conner among those who purchased the passes. Lifetime membership was priced at $250,000, with the option to purchase a companion pass for an additional $150,000. The program (now re-branded as AirPass) initially enabled passholders unlimited first class travel on any of the airline's flights worldwide.
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