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More Cancellations For Beleagured AA

Air traveler angst continued on Friday as American Airlines grounded hundreds more flights. The number of canceled flights this week at American Airlines passed the 3,000 mark when the nation's largest carrier said 595 more flights would be scrubbed.

American said an undetermined number of flights would also be canceled Saturday, but it hoped to complete safety inspections of all its mid-range MD-80 aircraft by Saturday night.

The financial toll and loss of goodwill will likely grow as well, as the inspection-related mess spread further to other carriers and hurt an industry already bleeding cash thanks to high fuel costs.

American said it was cancelling 570 more flights on Friday - the fourth straight day of large-scale cancellations since the nation's largest airline learned that the wiring on 300 planes needed to be re-inspected.

Industry experts estimate American's revenue losses will range between $40 million to $50 million, reports CBS News correspondent Nancy Cordes.

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.

"If somebody's got a choice between being in a plane crash and being late, is there a choice?" Jane Bernard, a writer from New York who was delayed by at least three hours en route from LaGuardia Airport to Miami, said Thursday.

Friday's cancellations hit hardest at Dallas-Fort Worth International and Chicago O'Hare airports, hubs through which American funnels many of its passengers.

Lines at DFW appeared back to normal Thursday, as more passengers learned of the cancelations before driving to the airport.

"There were a thousand people in here on Tuesday," said Theresa Williamson, a nurse from Tucson, Ariz., who had her first flight home canceled Tuesday but was back at Terminal A on Thursday waiting in line to check her bags. "I felt bad for the employees, because there were only two or three of them."

Just ahead of her in line was Veronica Johnson, a Washington-area resident who was in Dallas for a business meeting and finally found a flight home after the frustrations of being booked on four flights, only to have each one canceled.

"My employer was panicking, my kids were panicking, I was panicking," Johnson said. "I just think they ought to be more conscious of how (the grounding of planes) affects their customers."

American's top executives said they understand customers' anger, and they continued to offer mea culpas.

Chairman and Chief Executive Gerard Arpey said he took responsibility and that neither American's mechanics nor the FAA were to blame.

Arpey said the cost would run into the tens of millions of dollars, but said gave no precise figure.

American had initially expected to cancel 570 Friday flights, but on Friday morning the airline raised the number to 595 - more than a quarter of its schedule.

That pushed the four-day total to around 3,100 canceled flights.

Alaska Airlines, Midwest Airlines and Atlanta-based Delta Air Lines Inc. joined the wave, each canceling a small number of flights on MD-80 aircraft Thursday.

At least 250,000 passengers have been affected by the American cancellations this week alone.

Other carriers like Continental Airlines Inc., JetBlue Airways Corp., AirTran Airways and Northwest Airlines Corp. 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.

American spokeswoman Andrea Huguely said the cost probably wouldn't be known until Saturday night, when the carrier expects to have all its MD-80s back in service.

The cost to other airlines also was unclear, and the pain could continue, analysts said.

"Just given the level of scrutiny, it wouldn't surprise me if there were more cancellations and groundings at other airlines," said Standard & Poor's analyst Philip Baggaley.

He said the disruption was worse than some major storms that have affected large airline hubs.

"The costs are fairly substantial," Baggaley said. "Given that the cancellations have been spread among a number of carriers, this will make it harder for airlines to turn around and try to raise fares, particularly in the weakening economy. It does indeed come at a bad time."

Meanwhile, mechanics and FAA inspectors cleared more of the planes to return to service. American said Friday that 226 of its 300 MD-80s were back in service by Friday morning. It expected to operate half its normal number of MD-80 flights in the morning, rising to 60 percent by late afternoon.

American had grounded the same planes two weeks ago after the FAA began a crackdown on airline compliance with safety rules. American put the planes back in the sky, but they weren't examined by the FAA until this week, when inspectors found the wire-packaging work hadn't been done correctly.

The federal rule stems from reports that poorly packed wires could lead to electrical arcing, which could cause a devastating fire - although FAA said it had no reports of fires. Arpey said mechanics have found no signs of chafing in the wiring of its jets, and that passengers were never in danger.

Airline officials said they were giving $500 travel vouchers for passengers who were stranded overnight away from home, and that customers who were booked on canceled flights could request a full refund or apply the value of their ticket toward future flights.

The airline also said it waived its customary fee for changing flights for any customer on an MD-80 flight through Sunday, even if the flight was not canceled.

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