In 1981 American Airlines began marketing their 1st Class seats, for unlimited use (the AAirpass), for a meager $250,000 flat fee. Sounds expensive, right? You'll see....
Also, for $150,000, you could allow a friend to be seated in 1st Class with you, and this offer was also for the lifetime of that person as well.
The program quickly crashed in American Airlines' face as the promotion was really only intended for corporations who fly their executives all over the country. Instead, private citizens were forking up a quarter million, yet costing the airline over $1 million each year!
Some people were even purchasing the additional ticket meant for a "friend" and allowing complete strangers to fly 1st Class as a courtesy.
Another member flew return from Chicago to London 16 times in just 25 days! He bought his AAirpass in 1994 after winning over $4 million in compensation from a car accident.
After several years of hemorrhaging money, and the genius conclusion that spending $750k each year, every year, just to make $250k, American Airlines decided the program made absolutely no business sense.
American Airlines ceased selling these lifetime 1st Class tickets in 1994, and began cracking down on misuse, such as customers allowing anyone to use their buddy pass each time they flew.Don't compete — DOMINATE.
More Marketing Flops
Can one article sabotage a publicly-traded retail company online? It turns out, yes! In February of 2011, David Segal of the New York Times published an article about a well-known retail company... ahem, J.C. Penny,...
Can one marketing flop really close the doors of a successful business? Watch this ad and I'll let you know... The woman in the ad is the company owner's daughter who I really don't want to name as I'm sure...
Get My Free Updates
Matt Steffen was Listed by Forbes as the #1 Marketing Consultant Who Avoids the B.S.