Jansing and Co | May 08, 2012
>>> there's a guy racking up frequent flyer miles , george clooney . you might remember his character notched up 10 million miles in "up in the air." two guys who bought life plane tickets with american airlines have tripled and quadrupled that amount. the airline claimed that was costing the airline millions of dollars. everything is on hold now that american is going through bankruptcy protection . here to sort it out for us, brian kelly . brian, good morning to you. first of all, i don't think a lot of folks are familiar with pass program, this golden ticket program, originally set up as a big cash cow for the airline, right?
>> right. yeah, in the '80s, american started selling this pass to raise money when it was hard to get loans. so i think most people aren't familiar with it because unfortunately it's no longer up for sale. but back in the day f you got in on this, it was an amazing deal.
>> how much are we talking?
>> they weren't cheap. when american first started selling them, they were about $250,000 for a single pass. and then as time went on, they add on the ability to add on a companion for an extra $150,000. most of the people that got in early got first class for life for $400,000. but as we see now, the few that got in on this really took advantage of it.
>> you could fly pretty much anytime you wanted. it was essentially like having access to your own private jet .
>> unbelievable, yeah. as long as there was a seat for sale, you could get on it. and american even covered the taxes on the trip, so it was completely free from that point on. and you earned frequent flyer miles . so one of these travelers earned 40 million american advantage miles. conservatively valued, those are worth over $400,000 alone. it was an amazing deal no matter how you looked at it.
>> and then what happened?
>> and then what happened. so of course naturally people took it to the next level. and these flyers were going to europe several times a week and then the real ethically gray thing happened. they were shuttling people for money. and you really aren't supposed to sell the companion pass. they poked the bear one too many times and american, for just a couple of these travelers, american pulled the pass. i think it is important to note, american -- the pass is still good for a majority of the people that purchased them. it's just a couple of the people who took it to the next level --
>> we reached out to --
>> took it too far.
>> we reached out to american. i want to put up their statement on the screen. they said to us in part, most large companies have processes and procedures in place to monitor misuse and fraud. cases like these are very isolated and represent an extremely small percentage of our overall airpass accounts but fraudulent activity costs all of our customers money. so we work hard to ensure our policies are followed and all of our customers are benefiting from efficient and fair practices. we're going to have to leave it right there. we thought this was a fascinating story. so we're glad you came on and talked to us about it. brian kelly , the pointsguy.com. thank you, sir.