Computer Glitch Causes a $10 Million Problem for American Airlines

December 21, 2017

Much like this year’s Thanksgiving season, the last week of December will see record numbers of travelers hitting the road or heading to the airport for the holidays. Along with more than 97 millions drivers, AAA estimates that some 6.4 million people will fly to their destinations. Due to a computer glitch, however, thousands of passengers who booked flights with American Airlines nearly missed out on being a part of this massive crowd of travelers.

The company’s problems came to light in November when it announced that too many pilots had been given time off during the holiday season. First, a programming error led American’s scheduling program to overestimate the number of pilots and first officers that were available to assign to flights. This convinced the company’s vacation scheduling system that there were plenty of employees to go around, causing the program to grant leave to nearly anyone who asked for it. By the time American discovered the issue, approximately 15,000 Christmastime flights had become in danger of getting canceled.

Thankfully, the company solved the problem in the nick of time by striking a deal with the pilots’ union. Initially, American offered to pay time and a half for anyone who gave up their vacation to fly during the holidays. Union reps weren’t having it, though, and instead demanded that the company double the salaries of any employees who helped cover for the computer error. While reluctant at first, American eventually agreed to the conditions and staffed the flights that were facing cancellation. All that overtime pay will end up costing the company about $10 million. Still, it’s better than granting refunds to thousands of angry customers who just had their holiday plans ruined by a simple glitch.

Questions:

  1. Do you think this situation would have played out differently if the pilots for American Airlines were not part of a union? Why or why not?
  2. Besides losing money from refunds, what other problems would American Airlines have faced if it had been forced to cancel holiday flights?

Sources: Jack Stewart, “American Airlines’ Computer Glitch Leaves It Without Pilots Over Christmas,” Wired, November 29, 2017; Justin Sablich, “A Guide to (Somewhat) Painless Christmas Travel,” The New York Times, December 19, 2017; Hugo Martin, “Pilot Holiday Computer Glitch Could Cost American Airlines $10 Million,” Houston Chronicle, December 8, 2017.

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