* Fine stems from alleged maintenance lapses in 2008
* Problems led to 3,000 flight cancellations
* Airline has said it fixed problem on MD-80 planes
(Adds Transportation Secretary, AMR quotes; byline)
By John Crawley
WASHINGTON, Aug 26 The U.S. government on
Thursday proposed to fine American Airlines $24.2 million for
alleged maintenance violations that led to thousands of flight
cancellations two years ago.
It is the biggest-ever fine against an airline proposed by
the Federal Aviation Administration.
"We expect operators to perform inspections and conduct
regular and required maintenance in order to prevent safety
issues. There can be no compromises when it comes to safety,"
said Transportation Secretary Ray LaHood in the ruling.
The FAA said the planned civil penalty stemmed from
inspection and repair lapses flagged in April 2008 that
prompted the airline to ground 300 MD-80 series planes,
disrupting flights for several days.
American, a unit of AMR Corp AMR.N and the second-largest
U.S. airline, canceled 3,000 flights, affecting 300,000
The previous biggest proposed fine was $10.2 million
against Southwest Airlines (LUV.N) for alleged inspection
shortcomings on certain Boeing Co (BA.N) 737s in 2006 and 2007.
Southwest appealed and eventually settled the case with the FAA
by agreeing to pay $7.5 million.
American has 30 days to appeal the proposed fine.
"These events happened more than two years ago, and we
believe this action is unwarranted," AMR said in an e-mailed
statement. "We plan to follow the FAA's process and will
challenge any proposed civil penalty. We are confident we have
a strong case and the facts will bear this out."
"American Airlines has always maintained its aircraft to
the highest standards, and we continue to do so," the airline
The company has said it addressed the concerns of safety
regulators over problems with wiring in the wheel well before
putting the workhorse narrow-body MD-80s back into service.
Industry insiders had long expected a stiff fine for
American. The case is the most notable from a period marked by
sharp congressional and expert criticism that safety regulators
had become cozy with carriers they oversaw.
Additionally, the FAA under the Obama administration has
stepped up fines and other enforcement action against passenger
and cargo air carriers and related businesses.
Shares of American and other major airlines have been under
pressure all week as part of the broader market slide on
worries about the U.S. economy.
AMR stock was little changed at $6.07 in afternoon trade on
the New York Stock Exchange.
(Reporting by John Crawley and Kyle Peterson; editing by
John Wallace and Gunna Dickson)