April 9 (Bloomberg) -- American Airlines, the world's largest carrier, canceled almost 1,100 flights today to reinspect jets grounded two weeks ago for checks on wiring.

An estimated 120,000 travelers were left stranded, and parent AMR Corp. fell the most in a month in New York trading as the airline parked its 300 Boeing Co. MD-80 jets for another review of their compliance with a federal safety order. American said it would have ``significant'' costs from the groundings.

Today's cancellations followed 460 from yesterday and erased half of American's schedule. About 900 flights will be scrubbed tomorrow, and more may be dropped on the next day, too, American said.

``The safety system has been broken, and it will take some time for it to be repaired,'' said Jim Hall, managing partner of Hall & Associates LLC in Washington and former chairman of the National Transportation Safety Board. ``Unfortunately it's going to happen on the backs of passengers.''

The Federal Aviation Administration found lapses in American's compliance with an earlier order for how wiring bundles on the planes are attached to the jets' wheel wells, leading to the airline's decision yesterday to ground the jets.

Amid criticism in Congress of FAA oversight, ``everyone is bending over backward to make sure it's done right and it looks right,'' George Hamlin, managing director of New York-based consulting firm ACA Associates, said of the latest checks at American. ``What this results in is serious delays.''

Dallas-Fort Worth International Airport, American's biggest hub, had at least 336 departures canceled. American used buses to ferry stranded passengers to San Antonio and other nearby destinations, the airport said on its Web site.

`Personal Responsibility'

``I take full and personal responsibility,'' Chief Executive Officer Gerard Arpey said today in Marina del Rey, California, where he was attending a press conference for the Oneworld airline alliance.

AMR tumbled $1.15, or 11 percent, to $9.17 at 4:15 p.m. in New York Stock Exchange composite trading. It was the biggest drop since March 12, and brought the shares' decline over the past year to 72 percent.

The inspections aren't a safety issue, Executive Vice President Dan Garton told reporters at the airline's Fort Worth, Texas, headquarters.

FAA Specifications

During FAA spot checks at American, inspectors found that the wiring bundles on the MD-80s didn't match agency specifications such as the orientation of certain clamps and ties, Garton said.

``It's not a question of whether we completed'' the work specified in the directive, ``but how we completed it,'' Garton said. While ``the financial impact is significant'' from the groundings, the amount hasn't been determined, he added.

As of 3 p.m. New York time, 179 MD-80s had been inspected, with 53 returned to service and 126 still being worked on, American spokesman John Hotard said in an e-mail. American put the tally of MD-80 cancellations at 1,094 by about 7 p.m.

Alaska Airlines grounded its fleet of nine MD-80s and canceled 14 flights today to reinspect the planes at the FAA's request, said Caroline Boren, an Alaska spokeswoman. Seattle- based Alaska found no flaws in its first inspection of the MD- 80s, which make up about 8 percent of its jet fleet.

The FAA also is looking at Delta Air Lines Inc.'s MD-80s that were checked last month, said Diane Spitaliere, an FAA spokeswoman.

Delta's View

Delta is reinspecting all 117 of its MD-88 planes, which are part of the MD-80 family, and has had to make additional adjustments on about 20 percent of them, spokeswoman Chris Kelly said. She declined to say how many flights had been canceled.

The Atlanta-based airline is ``more than halfway'' through the checks, and all affected customers have already been rebooked on other flights, she said.

American initially grounded the MD-80s, which make up 46 percent of its main jet fleet, last month to ensure that wiring bundles met an FAA directive regarding how they are secured.

The repeated inspections will combine with surging jet-fuel prices to produce a full-year loss at AMR, said Jim Corridore, a Standard & Poor's analyst in New York. Corridore, who rates AMR as ``hold,'' expects a loss of 95 cents a share instead of the $1.50-a-share profit he projected earlier.

``This issue is not specific to AMR,'' Corridore said in a note to investors. ``But these repeated occurrences, along with continuing high oil prices, are likely to impact the company's bottom line.''

Jet Fuel

The price of jet fuel, which is refined from crude oil, has climbed 79 percent in the past 12 months. It was trading today in New York at a record $3.57 a gallon.

American uses the twin-engine MD-80s mostly on domestic routes. The jets can seat 140 passengers, according to American's Web site. It decided to ground the planes yesterday ``based upon our conversations and interaction with the FAA inspectors,'' said Tim Wagner, an American spokesman.

Each canceled MD-80 flight would have had about 110 people on board, Wagner estimated, pushing the two-day total of passengers left without flights to about 171,000, after 51,000 travelers were affected yesterday.

The FAA is trying to determine why the planes were able to keep flying, Spitaliere said. An FAA audit of nine jets in Dallas-Fort Worth found eight that didn't meet a directive regarding the wiring, she said.

March Cancellations

American and Delta canceled more than 700 flights March 26 and 27 for the earlier round of MD-80 inspections as the FAA tightened scrutiny of airline-industry maintenance.

Missed checks of Southwest Airlines Co. jets for fuselage cracks prompted the FAA to review how 117 carriers complied with a total of 2,392 safety orders. The agency found 99 percent compliance in audits completed March 28. Four carriers that weren't identified may be fined for not following directives, the FAA said.

On April 1, the FAA began a second round of more-detailed audits that raised questions about American's compliance, Spitaliere said. This larger review, which will continue until June 30, involves looking at 10 percent of all FAA directives at each carrier, the agency has said.

To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; John Hughes in Washington at Jhughes5@bloomberg.net.

Last Updated: April 9, 2008 19:16 EDT