Thursday, April 10, 2008

From the News

American Airlines announced today that it was canceling 933 more flights in order to inspect and repair wiring on its MD-80 aircraft.  This most recent news brings American's total canceled flights to over 2,500 since Tuesday when this internal crisis began.  American is hopeful that it will be able to return to business as usual come Sunday, though that could certainly change.  One positive sign is that the flight reductions themselves have started to decrease and over a third of American's MD-80 fleet has been returned to active service.  American's safety difficulties appear to be rooted in the FAA's recent oversight crackdown.  As readers of the blog will no doubt recall, the FAA has been under intense public and political scrutiny since it was accused of laxity in its inspections of Southwest Airlines' fleet.  In addition to American, Delta, Alaska, and Midway Airlines have also been compelled to ground portions of their fleet in response to FAA safety demands.  While there is no word yet on what the economic impact will be from all of these groundings, Gerald Arpey, American's CEO, stated that the groundings will cost the airline tens of millions of dollars.

On the passenger rights front, a breaking news report indicates that federal passenger rights legislation-now the only hope for airline consumer groups following the Second Circuit's decision in ATAA v. Cuomo-looks to be going forward.  The current FAA reauthorization bill, which has sat lifeless on the dockets of the House and Senate for months, contains marching orders for airlines whose aircraft are left out on the tarmac for three or more hours.  In addition to requiring provisions for adequate food, water, and working toilets, the proposed legislation would also allow passengers to request a return to the terminal if the plane has sat at the tarmac for at least three hours and the captain determines there is no imminent sign of departure.  It now appears that the federal passenger rights act will be removed from the reauthorization bill and reattached to moving legislation.

Finally, on the analysis front, the Wall Street Journal's Scott McCartney has an intriguing piece on the supposedly new airline attitude toward customers of out-of-business carriers: "It's your loss, not ours."  Citing the fact that Congress allowed protections for airline customers expire in 2006, McCartney stated that consumers should no longer expect other carriers to honor their tickets.  Consumers should therefore be wary about purchasing tickets on struggling carriers; unless they have a code-share relationship with one of the more stable airlines, options for rebooking will remain slim.  As a further point of interest, McCartney supplied a "Carriers to Watch Closely" list which included Frontier Airlines, ExpressJet, Sun Country, and Italy's version of the "living dead," Alitalia.

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