AMR cancels nearly 1,100 flights for inspections

By Kyle Peterson

CHICAGO (Reuters) - American Airlines canceled almost 1,100 flights, or nearly half its schedule, on Wednesday to reinspect aircraft, a disruption that affected about 100,000 passengers and triggered chaos at the busiest U.S. airports.

The airline said it expects about 900 cancellations on Thursday.

The disruption at the No. 1 domestic airline, a unit of AMR Corp, follows 460 cancellations on Tuesday and hundreds of cancellations two weeks ago. The March disruption was for the same reason as this week's problem -- to ensure compliance with a Federal Aviation Administration safety directive on wiring inspections for MD-80 aircraft.

"We have obviously failed to comply with the airworthiness directive to the precise standards that the FAA requires," AMR Chief Executive Gerard Arpey said at a news conference in Los Angeles. "I take full personal responsibility."

Delta Air Lines Inc canceled about two dozen flights on Wednesday and Alaska Airlines, 14, to address the same situation on their MD-80s. Delta canceled hundreds of flights at the same time as American in late March.

Dan Garton, American's marketing chief, told reporters in a conference call the carrier hoped to have full operations by Saturday. "We're working hard to get the airline back to normal," Garton said.

Airline officials could not estimate the hit financially but Arpey said the episode would be "costly." A spokesman estimated about 100,000 passengers were affected by the 1,094 cancellations.

Shares of AMR fell more than 11 percent in regular trade, outpacing losses by stocks of other U.S. airlines. However, AMR gained about a third of that back after-hours to $9.51.

The Amex airline index .XAL> was down 4.9 percent on high fuel prices and expectations for a weaker economy.

FAA CONCERNS

American said in a statement on Tuesday the FAA raised new concerns about recent wiring inspections and related work on the narrowbody MD-80 aircraft. The airline's 300 aging MD-80s make up nearly half of AMR's fleet.

The inspections stem from an industrywide FAA review of airline compliance with agency safety directives. In addition to American and Delta, several others have grounded aircraft as a result of the audit, which was triggered by inspection and maintenance lapses at Southwest Airlines Co.

Inspections at American relate to a 2006 FAA order to ensure that wiring in the right MD-80 wheel well is properly installed and secured to guard against electrical shorts and possible fire.

AMR first performed the work two weeks ago but an FAA review of that effort found some wire bundles were not secured exactly as the directive specified.

The FAA is under enormous pressure from Congress and government watchdogs for not closely overseeing compliance with its safety orders.