OK, so what is going on with American Airlines?

At last count, the company running the world’s largest airline fleet has grounded almost 2,500 flights since Tuesday, leaving tens of thousands of passengers on the ground. The airline canceled 460 flights on Tuesday, 1,094 flights on Wednesday and another 900 today.

According to American, because it voluntarily grounded its planes (as opposed to weather or an act of God), it is offering customers $500 vouchers, hotel accommodations, and reimbursing passengers who are stranded overnight.

CNN reports that 100 of American’s 300 MD-80s were back in service by Thursday morning, and the carrier said it expects to resume normal service by Saturday evening.

American grounded its fleet of Boeing MD-80s to inspect bundles of wiring, which manage auxiliary hydraulic pumps, in the wheel wells.

And, it’s not alone.

Delta has said that it canceled a “handful” of flights, all of which were Boeing MD-80s. Alaska Airlines announced Wednesday morning that it would begin inspections on nine of its MD-80s. United grounded 41 flights and delayed several others to inspect the cargo fire-suppression systems on its fleet of Boeing 777s. And Midwest Airlines grounded 14 flights to re-inspect its MD-80s.

So what’s the deal? It all goes back to “inspection-gate,” when it was discovered that fuselage cracks on Southwest Airlines’ planes had gone undetected, and that the FAA had let the airline slide on its inspections. Subsequent Congressional hearings unfolded a whole soap opera of threats, scapegoating and cover-ups.

Though the FAA levied a $10.2 million fine against Southwest for skipping mandatory inspections, two inspectors for the FAA testified before Congress that the government agency had failed to do its job. The whistleblowers, Douglas Peters and Charalambe Boutris, talked of “collaborative” and “cozy” relationships between the FAA and the airlines it’s supposed to be regulating.

According to the Huffington Post, in a scene straight out of a Sopranos episode, FAA inspector Douglas Peters “choked up” during the hearing while he testified about a former manager who “came into his office, commented on pictures of Peters’ family being most important, and then said his job could be jeopardized by his actions” if he were to go public.

Both Peters and Boutris testified that the agency views airlines as customers, not companies to be regulated; other testimonies reported that airlines were given “plenty of leeway” to correct problems that inspectors thought needed serious attention.

Is the FAA a watchdog group designed to enforce airline safety regulations and policies, or is it supposed to promote the aviation business? Unfortunately it seems to be both, and that doesn’t work.

The FAA is also severely understaffed, meaning that it can’t physically inspect each aircraft. Instead, it relies on the airlines to do the inspections and reviews the maintenance reports. So basically, the FAA is inspecting a piece of paper, not the planes that we’re flying on.

As Peter explains in his blog, the FAA sends out notices, called an “airworthiness directive” to the airlines stating that they’ve found a safety problem on a particular aircraft and that it needs to be fixed. There are three levels of airworthiness directives, from “this isn’t a big problem but deal with it” to “critical error, stop the planes and fix it now!” The MD-80 directive falls in the middle, which gave the airlines a loose deadline of about two years to fix the problem.

Southwest was caught not following through on the inspections in the allotted time. Were the planes ever in real danger? Probably not, but in the past, fuselage cracks led to a deadly Aloha Airlines flight in 1988. The Southwest scandal was enough to prompt the other airlines into performing their inspections before the deadlines, hence the hundreds of grounded planes.

The only good news in all of this? There hasn’t been a major U.S. jetliner crash in six-and-a-half years. The last one took place in 2001, when an American Airlines Airbus A300 crashed into a neighborhood in Queens, New York, after the plane’s vertical tail fin snapped after takeoff, killing 265 people.

By Managing Editor Sarika Chawla for PeterGreenberg.com

Related links: BBC, Fox Biz, HuffPo, CNN

PeterGreenberg.com’s Coverage:

Whistleblowers, the FAA and Airworthiness

Airline Safety Starts With Maintenance

FAA Inspection-Gate Causes Cancellations

Southwest Suspended, FAA Employees Reassigned

Southwest Flew Unsafe Planes, FAA Under Fire

And don’t forget to read more from Peter’s Travel Detective Blog.