American Airlines Delays April 2008
On April 8, 2008, American Airlines decided to cancel as many as 500 flights, which affected about 54,000 travelers. By doing this, the airline lost tens of millions of dollars (American). This airline decided to make maintenance checks along with increasing its fees and overcrowding some of its flights after he raise in fuel (Chang). This is the second inspection after the Federal Aviation Administration did not approve the airplanes the first time because the emergency inspections were not done properly. Since the problem was within the Airline’s control, American had to pay for hotel rooms, meals and transportation for thousands of passengers (Bailey). Many customers, such as Raul Garza, called the “red flag for American” and said that they might not use that carrier in the future (Chang). This man complained that flying is too inconvenient and more stressful than it should be (Chang). There were passengers that trusted American Airlines in being better safe than sorry, but it made people such as Roxanne Devries nervous. She said,
“Why were they flying if they’re redoing the same inspections?” (Chang).
The reason that airlines such as American are conducting inspections is because a $10.3 million fine against Southwest Airlines was given for missed safety inspections (Chang).
Traveling by air has grown much more popular in recent years, but the oil prices have gone up, there is more safety concerns against aging aircrafts, and the planes are more crowded. The price of oil has more than doubled since dropping to 52$ a barrel in January 2007 (Bailey). American is in a dilemma, as buying a new fleet of planes would be damaging to their bank statement, but it would attract more customers that want a safer flight. Airlines have top make a tough call whether to buy a new set of planes when the economy is at a low and their business may not improve.
An aviation analysis noted that, “They cant fund a new airplane, but the aging fleet is costing them more to operate, not just in maintenance but from risk of cancellations because of missed inspections,” (Chang).
Reading this article made me nervous about flying, since the passenger of the plane is in no control of whether their plane has been recently inspected. It is scary to think that a plane I could have been on did not have its wire bundles checked properly, and the wires could have jammed to cause an accident. I would be extremely frustrated if I was on a second leg of a flight and I found out that my flight was cancelled. It so happened that there was a fisherman who was stopped half way in his journey, so he couldn’t get his fish home to freeze in time. Since this incident did not only happen to American Airlines, flyers must be patient with their future travels, and people must learn that airplanes are getting more difficult to run. This occurrence is no coincidence, since there has recently been a new round of airline bankruptcy filings, including ATA Airlines, Skybus, and Aloha Air (Bailey). It is shocking that some people’s luggage went direct, but the passenger was left in the airport overnight with only the clothes on their back. The world population is becoming more and more international, but the airlines are not making a profit. As the ticket prices go up, less people will start flying, and less gas will be guzzled.
Chang, Andrea. “American Airlines cancels as many as 500 flights”. Los Angeles Times. 9 April 2008. 24 April 2008.
travel.latimes.com/articles/la-trw-american-airlines-cancels-up-to-500-flights-9apr09
“American Airlines ‘normal again.’” BBC News. April 13 2008. April 24, 2008. news.bbc.co.uk/2/hi/business/7345323.stm.
Bailey, Jeff. “American Cancels 1000 Flights in New Sign of Trouble.” The New York Times. 9 April 2008. 24 April 2008.nytimes.com/2008/04/09/business/09cnd-air.html?pagewanted=1&_r=1&ref=us
Dan G. 3/27/08
In response to Lizzy’s “American Airlines Delays April 2008″
Continued increase of gas prices has taken its affect on air travel, forces companies such as American Airlines to raise its prices in order to keep up with the market. “Ending a week in which it abruptly canceled more than 3,000 flights for maintenance inspections, American Airlines became the last of the major network carriers to join in a new across-the-board fare increase.” The company was forced to cancel many of its flights last week due to new inspection rules, which were just put into effect not too long ago. Since American Airlines’ fleet is becoming old and out of date, every flight makes the next one even more risky. The corporation can’t decide whether or not to build a new fleet when the economy is in such decline, they worry that it will not pay itself off since people have lost confidence in the company. “The FAA said that it had checked several American MD-80s and decided that the work carried out two weeks ago did not meet its standards.” After canceling so many flights, people were just about fed up with American Airlines. “The airline runs about 2,300 flights a day, more than a third of which use MD-80s, mainly on mid-range flights.” This posed a huge problem because more and more flights continued to be grounded causing complaints and a lack of assurance.
Over April break I traveled with the GHS Rugby team on tour to Argentina using American Airlines. Although our flights did not get canceled, many worried that they would be and that the tour would be canceled. This is the mindset that is going through the minds of travelers. If American Airlines doesn’t stop these flight cancellations, then they will continue to lose popularity and less people will fly with them. It is important that they try to regain the support of the public, otherwise they will be torn apart in the future.
“American Airlines grounds flights.” BBC News. 9 Apr 2008. 27 Apr 2008.
“Memo Pad.” New York Times. 15 Apr 2008. 27 Apr 2008.
American Airlines
Valerie Leone
“It’s one thing to ground planes for emergency inspections. . . . It’s entirely another matter to ground the planes again because the emergency inspections may not have been done properly” (Chang).
Joe Brancatelli, a publisher of a business traveler website hit the American Airlines situation right on the nose with that declaration. Shutting down flights for an inspection would be comforting to customers, but a failed inspection being redone is more than scary.
The MD-80s are the planes that are targeted on these re-inspections by the FAA to check “the spacing of the ties on the wiring bundles and the direction in which the retention clips and cords were facing” (“cancels”).
The amount of flights out of the total American-Airlines flights is more than a third, which leaves more than a third dissatisfied customers. “The airline runs about 2,300 flights a day, more than a third of which use MD-80s, mainly on mid-range flights” (“grounds”).
I personally am not turned off from doing business with American Airlines, but am grateful that they are taking actions that may give them a questionable reputation, yet will make flying safer. I am glad they are not attempting to contain the cancelations on the news, but wish that this incident could have inconvenienced less people. “By Wednesday morning, only 30 of its 300 affected planes were back in operation” (“grounds”). Even after all the initial cancelations, American Airlines failed to notify customers of the issues and caused trouble in their travels, especially, as Dan pointed out, sending clothes without the passengers, or not getting the caught fish to a cool area. It is a good action that America Airlines is taking, but the situation should have been handled better than it was.
Works Consulted
Chang, Andrea. “American Airlines cancels as many as 500 flights”. Los Angeles Times. 9 April 2008. 28 April 2008. .
Bailey, Jeff. “American Cancels 1000 Flights in New Sign of Trouble.” The New York Times. 9 April 2008. 28 April 2008. .
“American Airlines Grounds Flights”. BBC News. April 9 2008. 28 April 2008. .
In regards to the current issue American Airlines is dealing with, I think the only way there will be hope of re-gaining their reputation would be to buy a new fleet of airplanes. However, in a time like this when the economy is struggling, this action wouldn’t be the most convenient solution.
Thus the decision depends on if the company would like to risk spending this much money to attempt to bring back all of their customers, or if they would like to give up and sell their company. In this case, it may be easier and more worthwhile to sell the company. In the long run, if this continues, customers are going to stop using the airline, especially with several other safe airlines available. Furthermore, it may not be worth the risk of buying new airplanes, because then the company would have to advertise the fact that they have new planes and can be trusted once again. All together, the cost of buying the new fleets as well as all the expenses from advertisement wouldn’t compensate.
American Airlines is currently struggling to make money in compensation for what they’ve lost. “Even in small, niggling ways, the airlines are searching for passenger revenue. On Monday, American became the latest to announce it will start charging passengers $25 for checking a second bag,” (dallasnews.com). This method of trying to maintain success for the airline isn’t exactly the best idea, as it will turn many customers to cheaper and more convenient airlines.
Along with all the money being charged to customers, the airlines are trying to avoid delays by making more cancellations. The airports are also going to step in and aid the airlines in supporting the customers while they wait. This is all a good solution for the problem, yet only temporarily. In the long run, airlines will go bankrupt if they don’t satisfy their customers. Flying isn’t a right, it’s a luxury and people won’t pay a lot to fly if it isn’t worth their pay.
Maxon, Terry. “Fuel Costs Force Airlines to Change Strategy” 29 April 2008. http://www.dallasnews.com/sharedcontent/dws/bus/stories/290408DNbusairlines.394cd40.html
McCartney, Scott. “Airlines Address Long Waits- Sort of” 29 April 2008. http://online.wsj.com/article/SB120941800952050857.html?mod=googlenews_wsj
Not only airlines in the U.S. but also airlines all over the world are being affected by oil prices. The high oil prices are taking their toll in the traveling. Companies are struggling to maintain revenues. This has forced them to make important decisions to bolster their profitability. They have being canceling flights but they cannot keep doing this. I believe that by getting bigger planes with more capacity they could save money. For instance, if more people are in a plane they can share the profits more evenly and lower price but if there is an abundance of flights, some are going to be almost empty therefore wasting fuel and making it more expansive for everyone. Although at the start it might be really expensive, if it follows the plan it would eventually pay for itself in the long run.
In the U.S. there has being a steady market for airplane trips. The domestic industry has only growled about 6% percent. With the increasing oil prices, the airlines had being forced to raise their prices. The average ticket has gone up about 10.2% in the last month compared with a year ago. As Lizzy mentioned, many flights are getting canceled and are loosing millions of dollars. To solve this dilemma they have instated a $25 charge for a second bag. Also they had raised the prize of their tickets. Airline companies have being forced to face the current economic recession. They have being faced with the effects of inflation but they had to somehow to face their problems.
The Australian company “Qantas” has a policy that has helped them to minimize cots. They have hedged 12 months of oil barrels at a price of $90. Their barging will end on June 2009. Therefore they have decided to make plans for the future. Other airlines around the world have being facing the same problems their prices have gone up and some are facing bankruptcy. In Europe Ryanair has pronounced that they expect losses of about 50% this year. The current situation with airlines around the world would eventually leave out some of the weakest competition and leave the big airlines to divide the market. With high prices, small companies are not able to compete with huge airlines therefore they are going out of business. Unless something drastic happens I don’t think there is a clear solution to this problem in aviation.
Done, Kevin. “Airlines act to ease impact of fuel bills.” Financial Times . 28 Apr. 2008. 29 Apr.
2008 .
Prada, Paulo. “Strapped Airlines Seen Pushing Fares Higher.” The Wall Street Jurnal. 29 Apr. 2008.
29 Apr. 2008 .
Response to American Airlines
Although the recent situation causing American Airlines to cancel up to 500 flights, has made many travelers unsettled about which airlines they can trust, it is extremely important to look at it from their side. American Airlines lost tens of millions of dollars by canceling its flights in light of second inspections which needed to be done, inspections for the benefits of its travelers. Many people were obviously put off by the cancellations, but what they should also take note of is the fact that their flight was cancelled to prevent anything that could have cost them their life. American Airlines was forced to lose insane amounts of money for the benefit of having safe flights for its travelers, and I think that is what most people are continuously overlooking.
Flying has become a quickly growing means of transportation as traveling abroad has increased in recent years. Therefore, planes obviously are becoming more filled; and in light of rising oil prices the cost of fuel for aircrafts is outstanding. Everyone wants to feel like they are in good hands when they are traveling, yet with our country’s economic state there is no way that a new fleet of (very expensive) planes could ever help the airline recover. It has become increasingly hard for an airline to even stay out of bankruptcy. Therefore, it is extremely necessary that airlines today, as well as their inspectors make sure that the aircrafts which they are using, and have been using, are in the best shape that they can be. Regardless of past inspections, what really matters is what changes they can make now to prevent anything bad in the future. American Airlines left many travelers stranded due to cancelled flights in order to ensure the safety of its passengers. I think that it is important that we see the cancellations as a good thing and something that we should see more often in airlines, only maybe next time not all at once.
“American Airlines ‘normal again.’” BBC News. April 13 2008. April 24, 2008. news.bbc.co.uk/2/hi/business/7345323.stm.
Response to the Recent Airlines Inspections and Economic Trouble
Recently, aviation has come under close scrutiny by the government. With increasing numbers of international travelers, increasing prices of oil, and increasing number of plane malfunctions, plane inspection has become tighter than ever. About a month ago, four Alabama passengers sued Southwest Airlines after it “missed safety inspections over a period of about six years” (Brumback). This set the stage for the recent groundings and inspections of American Airlines planes. “American Airlines grounded 10 percent of its planes and cancelled flights in response to a hastily issued directive from the Federal Aviation Administration that required the company—the world’s largest airline—to inspect for possible wiring dangers” (Spencer). Airline companies, specifically American Airlines, have been suffering recently due to the high cost of oil. As a result, safety procedures have been overlooked, and money for new fleets is unavailable. Shockingly, American Airlines “operates a fleet of Boeing 767-200s that are on average 21 years old, as well as 18-year-old Airbus A300s” (Spencer).
These overlooked safety violations are not only costing airlines millions of dollars, but are also causing paranoia and setbacks for the everyday traveler. In this past frantic American Airlines incident, over 250,000 people were affected by the flight cancellations (“American”). With aviation becoming more and more unpredictable, people are refusing to rely to flying. Futhermore, a “breaking news” story about a plane crash due to a malfunction or gear jam is hardly going to make any human want to fly again. Although these inspections may be costing airlines millions of dollars, they are saving lives.
To avoid a never-ending disaster of malfunctions, delays, and concern, all aviation companies should invest their time and money into buying new fleets and following up on safety inspections. Not only will these updates reassure travelers, they will most likely also bring in profit from the improved conditions.
Works Cited:
“American Airlines cancels more flights over safety inspections.” M&C. 27 April 2008. ,
Brumback, Kate. “Passengers sue Southwest Airlines over missed inspections.” USA Today. 27 April 2008. .
Spencer, Naomi. “US: Hundreds of aging American Airlines planes grounded for inspection.” World Socialist Web Site. 27 April 2008. .
It is painfully evident that American Airlines is experiencing what may turn out to be an irreversible amount of trouble. Being one of the most expansive airlines out there today, it makes me wonder how their economic issues aren’t going to just affect them but affect other airlines, airports, and the current global organization of flight as a whole.
As Gerard Arpey, chairman and CEO of American Airlines is quoted saying in Fortune Magazine “There is no business that can go on forever selling its product for less than the cost to produce it” (Gimbel). As illustrated in this quote, American Airlines is definitely going through a rough patch and many fear that they may not be able to dig themselves out of the financial problems they are facing. I agree with Meg when she says that she thinks the only way this company will truly be able to regain its top status and begin to obtain profits is if they replace their antiquated and sub-par fleet with a new one. As Gerard also says “They [Southwest Airlines] are without question the price leader. And they’ve used that hedge position to in effect buy market share. And over the years, we’ve learned the hard way that we have to be competitive or we lose the business” (Gimbel). In order to recover the trust of the people, American Airlines needs to have an up-to-date fleet, or else they will lose business to those airlines which airplanes meet current safety standards. Flying is one thing that many are unwilling to take risks with, no matter how inexpensive the airfare is.
On the other hand, although they are indeed in a whole lot of trouble, Meg and others are looking at the fact that they are charging more to check a second bag now as a failure on their part. As it certainly doesn’t bode well for their financial standing, many airlines such as Delta and Northwest (Chicago Tribune) have already taken these actions earlier this year. With the rising cost of gasoline, I believe it is an action every airline is eventually going to have to take, and I don’t believe this to be a telltale sign that American Airlines is going under.
“American Airlines Economy Fliers to Pay $25 for 2nd Bag.” 29 Apr. 2008. Chicago Tribune. 29 Apr. 2008 .
Gimbel, Barney. “American Airlines Loses $3.3 Million a Day.” 29 Apr. 2008. Fortune. 29 Apr. 2008
.
I agree with Lizzy the fact that Airlines are cancelling flights because they don’t meet safety standards is disheartening. One of the major problems that plague modern airlines is decreased ticket prices along with rising fuel prices. With crude oil nearing 120 dollars a barrel and aging aircraft that require more maintenance, operating costs have increased exponentially while gross income has decreased due to lower ticket prices. My sister recently flew to California for a round trip ticket price of $238 if there were 100 people on the flight the airline only grossed $23,800. After paying the two sets of pilots, two sets of crew, fuel expenses for a 6,000 mile trip I wondered if they had lost money rather than made money. This seems to be the route of the problem, oil costs too much and airlines can’t afford to fly the planes or to make safety checks on time.
In my opinion it is outrageous that the Airlines are booking flights that they know that they won’t be able to fly because the planes will be out of commission. As one of the articles I read indicated that it would be ok to ground hundreds of planes for emergency inspections or repairs. It is another thing however to ground the planes because required safety checks hadn’t been made. At this point in the economy with rising oil prices Airlines need to start coming up with creative ways to get oil at lower prices. One airline did this by buying oil in advance securing it at a certain price; this can go both ways though. If oil increases they clearly made the right decision, but if by some weird change of events oil went down below the price they have secured they will have to cover the cost of the oil at a more expensive price. This is much like buying stocks on margin, there is a possibility to make or in this case save lots of money but there is also the possibility to loose just as much. Airlines have a rough future ahead and they need to be able to guarantee that booked flights will take off on time without delays and cancellations.
Works consulted
Chang, Andrea. “American Airlines cancels as many as 500 flights”. Los Angeles Times. 9 April 2008. 28 April 2008
Prada, Paulo. “Strapped Airlines Seen Pushing Fares Higher.” The Wall Street Jurnal. 29 Apr. 2008.
29 Apr. 2008
Done, Kevin. “Airlines act to ease impact of fuel bills.” Financial Times . 28 Apr. 2008. 29 Apr.
2008
“American Airlines ‘normal again.’” BBC News. April 13 2008. April 24, 2008. news.bbc.co.uk/2/hi/business/7345323.stm
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