AA_EXP09

I would have gone to PVG instead and bought a cheap MU fare there.

ORD & LAS

Didnt Charlie Joiner play for the San Diego Chargers? Im pretty sure
he`s in the H.O.F.. Or maybe that was another Joiner?

ma91pmh

I read that as the judge saying "guys this is peanuts go get it settled in settlement conference rather than drag this into bankruptcy court"

Settlement hearing was April 5th, I wonder if they reached an agreement. My guess is Rothstein would have been keen to settle given the new chapter numbered 11.

bordeauxboy

Why all the dancing around by AA? Just didn't want to provide a refund? If they wanted to cancel the Aairpasses, the agreements signed by both Vroom (Section 18c) and Rothstein (Section 17c) allow AA to terminate the agreement at any time. No need to prove fraud.

AA must have been trying to position themselves for public relations purposes. Well, guess what AA, this is telling me that if I buy such a product from you it is only okay if I do not use it - probably not the intended message. We hear how much these particular customers cost, but not about the people that undoubtedly bought these passes and then had life circumstances that made them less usable than originally expected.

johnathome

Is it correct that the passholder's don't have to pay taxes on the individual tickets either? So AA is making those payments now for these pass holders?

With Chapter 11, I think the airline has lots of room to renegotiate all the contacts and end those lawsuits.

FWAAA

That's correct. AA covers all taxes and fees.

In Ch 11, AA could reject all lifetime AAirpasses and lifetime Admirals Club memberships if it chose to.

ma91pmh

I think the key point is though they would have to reject ALL lifetime passes, not just this guys. So there is plenty of reason for both sides to come to a settlement, that would likely put a big chunk of change in this mans pocket

josephstern

That was my takeaway also - my only guess is that since this is one of many versions of the contracts they used, the ability to refund and cancel isn't in some versions.

josephstern

Didn't anyone here find it odd that in the "Vroom's Contract" PDF, pages 6 and 7 have completely different typefaces? Page 7 seems to have been reprinted by someone at some point.

dhuey

I'm guessing without knowing that AA could also seek court-ordered modifications to the AAirpasses to end the practices it considers to be abusive and costly, while still honoring the basic idea of the deal.

BillScann

I first met Jack Vroom in 2004 on an ANC-DFW flight. I was offered the chance to upgrade at check-in for $150 and, despite being short on cash because of my wife's first pregnancy, I bought-up and found myself sitting in 1D next to Jack. We chatted for a long while, something I don't typically do on planes, and to make a long story longer, he flew my wife and I from DC to Rio de Janeiro; and then my wife, newborn son, and I back to DC several months later.

Jack is a great guy with a big heart and a pocketful of great stories. The abuse he's received from AA is an abomination. All Jack ever did was use the AAirpass he bought and paid for, fair and square. Shame on AA for being so dishonest.

ma91pmh

I really don't know the details, but from what I can glean, this seems the most plausible view of the world, and the only folks as bad as AA in all this are the sad apologists for them that can often frequent this board. I really don't like companies that do stupid things and then turn around and try to portray it as somehow they are being screwed, and find it even more incredulous when some of their paying customers stand up and defend such nonsense.

Madone59

Wow, that is quite the story. Would you do it today? That kind of money now is $1,000,000+. If you earned 6% on that money and only flew on the interest you +1 would have a hard time spending it all.

MSPeconomist

It sounds like AA's decision to offer these things on their original terms in retrospect was a big mistake. It's odd that they were offered on a lifetime basis because there would have been no data on their likely use patterns.

What I suspect AA did to exacerbate their mistake is failing to take account of the fact that when they raise the price, fewer such contracts will be sold, but they will still be purchased by some customers that differ somewhat from those who purchased the earlier and heaper version. For instance, if 100 people (to make up a number) purchase the lifetime FC contract at $300K and fly $35,000 on average, but in the following year AA raises the price to $500K and only sells 20 contracts, those 20 people are likely to fly MUCH more than the $35,000 average flown per year by the original larger group. It can be the case that there is no price for the contract which makes it viable for AA. People self select, just the same as those who know they are very sick try to purchase unlimited coverag health insurance policies.

MSPeconomist

Six percent of a million is $60,000. Using IFC it's easily possible to spend that much on air fares; this is only about a half dozen TPAC/TATL in full J. Indeed, some domestic coach business travelers who purchase last minute tickets would spend more per year.

However, in addition to the loss of interest or other earnings on the million, one should account for the million being gone or spent down to zero at the end of the lifetime. Tax implications should also be considered in these calculations.

(response to post #73 above)