A computer error that gave too many American Airlines pilots approval to take vacation during the year-end travel season is expected to cost the world’s biggest carrier about $10 million, an industry expert said.
American 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 in 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 percent of their salaries to work during those shifts left vacant because of the scheduling error. During negotiations with the pilots’ union to staff the flights, American Airlines increased the offer to 200 percent 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.
Baker said the decision by American Airlines Chief Executive Doug Parker to pay double the normal salary initially seemed too generous. But he concluded that the move makes sense.
“Alas, we estimate that the difference between a 150 percent and 200 percent 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.