American Airlines Could Face Huge Safety Fine; Audit Hits FCC

The Federal Aviation Administration is close to wrapping up a two-year investigation of safety violations at American Airlines that could result in one of the largest fines in the agency’s history, according to government and industry officials familiar with the investigation.

Separately, the Transportation Department’s inspector general is due to release an audit in the next several days that criticizes the FAA for lax oversight of aircraft maintenance at American, the officials said.

The FAA safety investigation involves improperly secured wiring in 290 MD-80s in American’s fleet. The loose fastening resulted in damage to wiring in several dozen planes and, in at least a handful of cases, electrical arcing _ a potential fire threat, according to the officials, who asked not to be identified because they weren’t authorized to speak publicly.

As a result of the safety violations, the FAA temporarily grounded hundreds of planes in April 2008, wreaking havoc in the travel schedules of thousands of passengers.

FAA officials have not yet determined the amount of the fine that will be proposed against American, but it will likely be along the lines of the $10.2 million fine the agency proposed against Southwest Airlines in March 2008, the officials said. The Southwest fine, the largest ever proposed by the FAA, was the result of nearly 60,000 flights made on planes that had missed required examinations for structural cracks. It was settled for $7.5 million in March 2009.

FAA spokesman Lynn Lunsford said that the agency’s investigation is not yet complete and that it would be premature to comment on the amount of any fine that might be proposed.

American spokesman Tim Wagner said the airline isn’t aware of any pending fine. The airline has long said that the safety of its aircraft was never jeopardized.

The inspector general’s audit involves allegations of maintenance problems at American, including aircraft landing gear that weren’t retracting properly and windshield heating systems that had electrical problems. A spokesman for the Allied Pilots Association, which represents pilots at American, said the union brought some of the safety issues to the attention of the inspector general in 2008 after FAA inspectors failed to respond to the union’s complaints.

“We had been trying to bring some of these systematic issues to the attention of the FAA and were finding some significant push-back,” said Sam Mayer, a spokesman for the union.

FAA officials declined to speak publicly about the audit since it hasn’t yet been released by the inspector general. However, an FAA official said the agency has submitted formal replies that agree with many of the auditors conclusions about weaknesses in maintenance oversight at American.

Those problems were largely corrected during a special in-depth FAA review of American maintenance programs last spring, the official said.

Wagner said American has cooperated with the inspector general’s audit. He declined to comment further.

In 2008, the FAA proposed a $7.1 million fine against American for, among other violations, flying two jets 58 times without making repairs after an FAA inspector and American’s own mechanics found problems with their autopilot systems. Those problems were unrelated to the issues that led to the groundings.

Sources:

Federal Aviation Administration

Department of Transportation Inspector General

American Airlines