Cancellation wave latest problem for airlines – Cost will not be limited to American as it spreads across entire industry
ATLANTA – Another day and hundreds more flights grounded. The financial toll and loss of goodwill among travelers from the debacle that spread further Thursday beyond American Airlines’ massive cancellations could be severe — on an industry already reeling from high fuel costs.
Lawmakers were asking questions and some fed-up air travelers headed for trains. Others gave the airlines a pass, saying the companies were doing the best they could.
“I’m really upset, but I’m trying to keep a positive attitude for the sake of my children and my husband, who’s wandering around looking for us,” said Rainie Nelson, a 39-year-old from Park Ridge, Ill., who was stranded at Chicago O’Hare International Airport with a toddler and an infant while on their way to Palm Springs, Calif.
Of American employees, she said, “There is no point in yelling at them. It’s not their fault. So, I’m going to be as nice as I can be.”
Mingo Valencia, a 60-year-old stuck at Hartsfield-Jackson Atlanta International Airport while heading home to Midland, Texas, wasn’t so gracious.
Congress also weighed in Thursday. The FAA official who ordered the audits last month, Nicholas Sabatini, faced tough questions from a Senate subcommittee about the agency’s lax oversight of airlines and his own accountability for recent breakdowns. The FAA noted that airlines had 18 months to complete the work on the MD-80s since the initial order was issued in September 2006.
American, a unit of Fort Worth, Texas-based AMR Corp., had canceled nearly 2,500 flights this week as of Thursday due to the safety inspections of its MD-80 aircraft following an FAA warning, and said an unspecified number of additional cancellations were expected through Saturday.
Alaska Airlines, Midwest Airlines and Atlanta-based Delta Air Lines joined the wave, each canceling a small number of flights on MD-80 aircraft on Thursday.
Roughly 250,000 passengers have been affected by the American cancellations this week alone.
Other carriers like Continental Airlines, JetBlue Airways, AirTran Airways and Northwest Airlines said they passed the first round of FAA audits with a clean slate and did not expect extra maintenance work or flight delays. It was impossible to say whether that could change since the FAA is conducting another round of safety audits.
The cancellations come at a time of high fuel prices and mixed success among the major air carriers at getting domestic fare increases to stick. The fact that airplanes are flying very full is making it difficult for airlines that cancel flights to find empty seats on other carriers to rebook their passengers.
“This disruption is severe,” said Webster O’Brien, an industry expert with aviation consulting firm Simat, Helliesen & Eichner. “People are going to be unhappy. There isn’t going to be an easy way to walk everybody out of it.”
American CEO Gerard Arpey said Thursday that the cancellations will cost the airline “in the tens of millions of dollars.” Analysts say the toll could easily be that, and perhaps much more.
Besides lost revenue from the canceled flights, American also was giving $500 travel vouchers to an unspecified number of inconvenienced passengers and putting some travelers up in hotels. There also could be transportation costs to and from hotels, extra overtime for employees and the long-term costs of losing goodwill among customers.