Jim’s Notebook — May 16, 2012

American’s AAirpass Boondoggle … Le Club vs. Le Big Mac … Which Cards Don’t Charge Foreign Transaction Fees … How Much Did You Gain on Your Cruise?

Years ago as a photographer and editor, and later as an airline executive, I use to fly first class. A lot. Those were the glory days of travel with good food and wine and royal treatment both in the air and on the ground.

Of course, those glory days are gone for most of us — except for those pampered few who own an AAirpass, which allows you unlimited first-class travel for life on American Airlines, plus frequent-flyer miles, access to AA’s VIP lounges and a special desk to sort out all your travel problems.

First issued by American Airlines in 1981, the cost of the pass was $250,000, plus an additional $150,000 for a companion ticket. The thinking up in American’s ivory control tower was that since interest rates were sky-high at the time, AAirpass would generate millions in revenue that could then be used for expansion.

“We thought originally it would be something that firms would buy for top employees,” the Los Angeles Times quoted Bob Crandall, American’s chairman and chief executive from 1985 to 1998, as saying. “It soon became apparent that the public was smarter than we were.” Much smarter, I’d say.

Remember “Up in the Air,” the film in which George Clooney’s character became a super-elite traveler when he attained 10 million frequent-flier miles? There are some AAirpass holders who can’t even remember when they accumulated 10 million miles, it was that long ago.

One guy from Chicago, who bought his pass in 1994 and obviously likes to live on planes, flew round trip to London 16 times this year in one 25-day period, all totally free.  “I love Rome, I love Sydney, I love Athens,” he told a reporter from the LA TImes by phone from the Admirals Club at John F. Kennedy International Airport in New York. “I love Vegas and Frisco.” Well Mr. very-frequent flyer, here’s a bit of news: American doesn’t love you.

The passes are costing American millions every year and since the company is now in dire economic straits, it’s trying to revoke as many as possible. In fact, it’s even formed a special “revenue integrity unit” to check which pass holders may have broken any rules so their passes can be pulled. It’s even bribing people with free tickets to rat others out.

But regardless of whether you’re an AAirpass holder or not, once you arrive wherever you’re going you need to eat, something the folks at hotels.com are capitalizing on with their new “Club Sandwich Index,” which compares the average cost of a club sandwich in three-to-five star hotels in 26 countries. In total, they surveyed 750 hotels, finding that the most expensive city in the world for a club sandwich is — mon dieu! — Paris.

In one five-star hotel they even cite one chef’s little creation as costing a bacon-busting $53.57. According to The Economist, which publishes the Big Mac Index as a measure of the cost of living in different cities, you could buy 11 Big Macs for that amount in the City of Light. Forget the club, I say, let them eat cake.

To make matters worse, if you charged le club on your credit card it could even cost you an additional $1.50+ in fees. Avoid that by reading which credit cards don’t charge a foreign transaction fee (in the Huffington Post) or which issuers are cutting credit card foreign transaction fees (on creditcards.com). Let those bankers eat cake too.

And finally, to come full circle, perhaps we shouldn’t be too quick to criticize the AAirpass holder who took the 16 round trips in 25 days, as overdoing it a bit. A travel agency in the UK surveyed 1,200 cruisers and was told by more than half of them that they had gained a pound a day for two weeks on a cruise, a total of14 pounds.

Obviously, whether you’re booking a flight or setting sail, some people just don’t know when to put the fork down.


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