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April 09, 2008

American bumps Southwest off airline front page

Looks like the AA has got its own set of maintenance problems. Potential wiring problems on jets led American to cancel 1,000 or more (updated) flights today after scrubbing 500 yesterday. And, AA said the cancellations could continue tomorrow.

American cancelled some flights two weeks ago, when it found wiring inspections on some of its MD-80s didn’t meet Federal Aviation Administration standards. The new bout of cancellations is due to the FAA finding problems with the initial attempt to fix the problem. No word on whether or not a fine is coming down the pike.

As for volume, 800 flights is about one-third a daily load for American. Given that MD-80s are shorter-flight planes, I’m guessing that a whopping 40 percent of American’s domestic itinerary got scrubbed today.

And, it ain’t good news for the bottom line. The story notes analysts are already expecting American to announce a first-quarter loss of $300 million in two weeks. If the number comes in worse, with the wiring problems as well, the second quarter could be a bloodbath.

That’s not all. Many customers are complaining about the lack of advance notice from American. And, if the average scrubbed flight had 100 passengers, American just inconvenienced 100,000 people. If just 5 percent of them are mad enough to stop flying American, that’s 5,000 customers down the drain.

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