In 1987, American Airlines was desperate for cash, so they made an offer that seemed brilliant at the time. Pay $250,000 upfront, and fly first-class anywhere in the world, for the rest of your life.
Most people thought it was too expensive, but a few visionaries saw it differently. Steven Rothstein was one of them.
Mr. Rothstein was a Chicago investment banker who understood the value of a good deal. Steven didn’t just buy the lifetime pass for himself. He paid an additional $150,000 for a companion pass that allowed him to bring anyone, anywhere, anytime.
For $400,000 he’d unlocked something that was priceless: the absolute freedom of the sky, and Steven didn’t waste it.
He flew to London for lunch, and Paris for a business meeting that could have been a phone call. He’d book flights to Asia just to try a specific restaurant he’d heard about.
If a friend in another country needed him, Steven was on a plane that afternoon. If he was bored on a Tuesday, he’d fly to Hawaii for the day. He once flew to Maui 16 times in one month just because he could.
The companion pass became his gift to the world. He’d bring business associates to seal deals. He’d fly his daughter across the country to visit colleges. He’d offer the seat to strangers in airports who’d missed their flights just to be kind.
Steven wasn’t hoarding his golden ticket. He was living it fully.
Over 21 years, he took more than 10,000 flights, accumulating over 40 million miles. His trips spanned six continents, always including first-class meals, service, and seats.
But someone at American Airlines was watching, and they started doing math.
If sold normally, those 10,000 flights would have generated tens of millions of dollars in revenue. Every time Steven Rothstein’s name appeared on a passenger manifest, it represented a first-class seat the airline couldn’t sell to a paying customer.
The $250,000 they’d collected in 1987 had been spent long ago. Now Steven was costing them millions of dollars.
In 2008, American Airlines decided to revoke his pass.
Their justification was that Mr. Rothstein had violated the terms by occasionally listing his companion pass under fake names or giving it to people who weren’t explicitly traveling with him.
Steven fought back, but to no avail. He said he’d followed the rules as written. The companion didn’t have to be the same person every time; which was supposedly the whole point. But American Airlines had made up its mind.
After 21 years of unlimited freedom, Steven Rothstein’s golden ticket was cancelled.
Let me leave you with this…
This AAirpass Program Case is routinely taught in B-Schools to get graduate students thinking with a long term perspective. I’m reminded about this case because we live in trying times where many decision makers are tempted to take the short term, easier route that may lead to disaster.
It’s easy to lose your head and make bad decisions, when the following happens almost overnight. We just experienced the second largest job-loss in one month since the pandemic, oil prices are up over 60% in four months, and gas prices are up over 20% since December. Did I mention that we’re at war?
Given these facts, two things are certain.
First, when people lose their jobs they buy fewer goods and services at lower prices. This AI trend will only exacerbate current conditions.
Second, no one is exempt from rising energy prices. It will affect every company, causing prices to rise. Inflation will return and you’re going to need to manage your margins.
I’m not going to get into the politics or the right and the wrong of any of it. That’s not what my column is about, and anyone sending me hate emails as a result will be immediately deleted from this list.
My column is about helping decision-makers and entrepreneurs Captain their ships through troubled waters. And the only way to get through all of this is to take a longer-term approach.
Artificial Intelligence isn’t going away. The job losses we’ve seen will continue. You’ll need to adjust your offerings for a high-end market to maintain profits. Races to the bottom don’t create solid bottom lines.
Increases in energy prices will cause inflation and you’ll need to manage your pricing to account for the problem. Without doing this difficult work, you’ll end up with losses that might lead to bankruptcy.
Entrepreneurship isn’t easy. The only easy day was yesterday. If it were easy, everyone would be capable.
So get to it already. Dig a hole, shoulder a weapon and say, “Not today. Today we’re going to be fine because I’ll do the hard work and make the necessary decisions to get us through this.”
And the only way to do that is through long-term decision making. But do it knowing that you’re not alone.
I’m right there with you. If you need to talk, you know my number.
As always, if you’re having problems with your accounting and tax work, I’m waiting for you to contact me.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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