AMR Rules Out ‘External Threats’ in Software Failure

American Airlines has eliminated outside interference as the cause of the software malfunction that grounded its U.S. fleet and forced the cancellation of more than 1,000 flights, Chief Executive Officer Tom Horton said.

“We understand the cause for the failure,” he said in an interview today. “We’ve ruled out any external threats. We’re continuing the investigation, doing some further testing. We have a high degree of confidence the situation will not recur.”

Horton declined to comment on a specific cause of the April 16 disruptions in the reservations and flight operations systems. Fort Worth, Texas-based American and its American Eagle regional partner, which are units of AMR Corp. (AAMRQ), both had flights scrubbed because of the shutdown.

The incident shouldn’t affect any decision to adopt American’s operating systems when the carrier exits bankruptcy protection and merges with US Airways Group Inc. this year, Horton said. US Airways CEO Doug Parker has said he’s inclined to use systems at the larger American for the combined airline, unless there is a compelling reason not to.

Questions about an outside cause arose because the grounding came a day after two bombs exploded near the finish line of the Boston Marathon, Horton said.

Parker will take over as American’s CEO after the merger with Tempe, Arizona-based US Airways. The new airline will be the world’s biggest by passenger traffic.

American is seeing “a bit of softness” in travel demand this month, following a slowing across the industry in close-in bookings last month, Horton said. Bookings for May and June are slightly ahead of the same period in 2012, he said.

Quarterly Profit

AMR today reported first-quarter profit of $8 million, excluding $349 million in bankruptcy costs and one-time items, compared with a loss of $248 million on the same basis a year earlier. Revenue rose 1 percent to $6.1 billion.

American is the first major U.S. carrier to report earnings for the quarter. US Airways Group Inc. (LCC), Delta Air Lines Inc. and Southwest Airlines Co. all are expected by analysts to post profits next week. United Continental Holdings Inc. is estimated to have a loss.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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