AA's CEO says impact from groundings likely in tens of millions of dollars

By Trebor Banstetter

tbanstetter@star-telegram.com

American Airlines' chief executive, Gerard Arpey, said Thursday he took responsibility for the grounding of the airline's 300 workhorse MD-80 jets this week and he apologized again for the havoc and inconvenience.

The airline estimates that another 570 flights will be canceled on Friday. About 2,500 flights have been canceled so far this week.

"We're doing everything we can to accomodate our customers," Arpey told reporters during an afternoon briefing.

Arpey wasn't critical of the Federal Aviation Administration for ordering the planes grounded for a new round of inspections, after determining American wasn't completely compliant with rules during an earlier set of inspections focused on wheel well wiring.

"We obviously failed to complete this airworthiness directive to the precise standards of the FAA, and I take personal responsibility for that," Arpey told reporters.

He said the airline has 123 MD-80s back in service, and 10 are awaiting FAA inspection.

American has cancelled thousands of flights this week after the FAA's order.

Arpey said it was too early to know the extent of the financial impact on the company. But he said it will be substantial, and likely in the tens of millions of dollars. He said it's hard to say whether this will have any lasting impact on the company's reputation.

Arpey praised American's mechanics.

"Our mechanics are absolutely not to blame," he said. "They are the finest mechanics in the world."

Arpey noted that American worked with Boeing to put the FAA's current airworthiness rules on the MD-80 together.

The directive is "extremly complex" and not black and white, Arpey said. "In this latest recurrence, the FAA found we weren't in precise compliance, and we need to be."

In no cases have the inspections yielded evidence of chafing of wires, Arpey said. He did not criticize the FAA.

"I am in no way being critical of the FAA," Arpey said. "The FAA has always held airlines to strong safety standards. The FAA is under their own set of pressures."

Asked what's changed in the climate where airlines in recent weeks have been forced to ground planes and cancel flights over questions about proper inspections, Arpey said, "it would be fair to characterize as the FAA stepping up surveillance and doing their job. I believe the FAA has always set a very high standard for safety."

Even though American wasn't in compliance with the FAA's rules, Arpey asserted the MD-80s are safe.

"Reasonable people in good faith can reach different conclusions on the method of accomplishing the goal," he said of American's procedures.

"I put my kids on these airplanes all the time," Arpey, a father of three, said. "Irrespective of FAA oversight, noone would put a plane in service that wasn't safe."

American canceled 900 flights systemwide on Thursday.

The airline scrambled to cope with the grounding of its MD-80 fleet for the third day, offering travel vouchers to thousands of stranded passengers, mobilizing teams to inspect parked jets and assuring customers that its airplanes are safe to fly.

Looking for comments?