Pilot holiday computer glitch could cost American Airlines $10 million
A computer error that gave too many American Airlines pilots approval to take vacation during the busy Christmas travel season is expected to cost the world’s biggest carrier about $10 million, according to an industry expert.
The Fort Worth-based carrier has confirmed that a glitch in the airline’s work scheduling program raised the possibility of canceling hundreds — perhaps thousands — of the nearly 200,000 flights scheduled during December, one of the busiest travel periods of the year, because no pilots were available to fly them.
The airline initially offered to pay pilots 150% of their salaries to work during those shifts that were left vacant because of the scheduling error. During negotiations with the pilots’ union to staff the flights, American Airlines increased the offer to 200% of the pilot’s regular salary.
The extra pay is expected to cost the carrier $10 million, according to Jamie Baker, an aviation analyst with J.P. Morgan. That is a fraction of the $2.7 billion in wages and benefits the airline is expected to pay for the entire fourth quarter, Baker noted in a memo to investors.
Baker said the decision by American Airlines Chief Executive Doug Parker to pay double the normal salary initially seemed overly generous. But he concluded that the move makes sense.
“Alas, we estimate that the difference between a 150% and 200% pay rate to be sufficiently immaterial that we won’t criticize management for choosing a gentler, more collaborative approach in order to deflect both negative press coverage and passenger angst around this issue,” Baker said.
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