UPDATE 3-Southwest grounds planes over new maintenance glitch
(Recasts with Southwest expecting normal operations Thursday)
By John Crawley
WASHINGTON, March 12 (Reuters) - Southwest Airlines Co (LUV.N) grounded more than three dozen planes on Wednesday due to a new glitch in safety inspections, although it said normal operations would resume the following day after reinspection.
The groundings, which cut 4 percent of its scheduled flights, came after the Federal Aviation Administration last week proposed a record $10.2 million fine against the airline, charging it missed deadlines to inspect planes for structural flaws during 2006 and 2007.
Southwest said in a statement that it discovered "an ambiguity" in maintenance records on 44 planes and decided to "take a conservative approach" and take them out of service for reinspection.
Southwest normally operates 3,400 scheduled flights each day and only uses Boeing Co (BA.N) 737 aircraft. It ended 2007 with a fleet of 520 737s.
Shares of Southwest fell 7.3 percent to close at $11.49 on the New York Stock Exchange. Shares of U.S. airlines were broadly lower on high fuel prices and a report cutting ratings on several airlines from JP Morgan analyst Jamie Baker.
Southwest did not disclose the specific problem but the FAA said it was related to an agency inspection requirement for window areas on 737-300 and 737-500 aircraft. The FAA said Southwest grounded the planes until it could verify that it correctly followed instructions for the inspections.
The airline said one plane was already retired, five more were in maintenance for scheduled work, and the remaining 38 were taken out of service.
It said all 38 aircraft would be reinspected by the end of Wednesday night and it expected normal operation on Thursday morning.
Southwest said its ongoing internal review of its maintenance programs could result in additional operational changes.
The effect of the groundings on Southwest's financial performance was not clear. The airline did not return a call seeking further information on its decision.
Last week, the FAA proposed the $10.2 million fine for allegedly missing deadlines to inspect 46 planes for fuselage cracks and flying them for more than week after acknowledging the oversight.
Aviation and regulatory officials said the planes should have been grounded immediately until the required crack inspections were completed. Southwest said the FAA and Boeing cleared the planes for flight while the inspections were completed.
Southwest, Boeing and a safety expert hired by the airline to review the matter said at no time was aircraft safety compromised.
But a congressional committee investigating the fuselage inspection issue cited chronic problems in Southwest's oversight of inspection programs and a "cozy relationship" between airline maintenance officials and FAA inspectors.
Three Southwest employees have been placed on administrative leave. Two FAA officials in Dallas, where Southwest is based, have been reassigned.
In addition to the House of Representatives Transportation Committee, the U.S. Transportation Department's inspector general, and the FAA are investigating Southwest's procedures for complying with mandatory inspections.
Acting FAA Administrator Bobby Sturgell met with Southwest chief executive Gary Kelly on Wednesday to review the maintenance issues.
John Goglia, a retired airline mechanic and former member of the U.S. National Transportation Safety Board, said Southwest took the right step on Wednesday.
"They found something they didn't like and couldn't be a 100 percent sure by the paperwork that it was done properly," Goglia said.
Airlines fail from time to time to meet all aircraft inspection requirements, Goglia said. Without excusing Southwest for the case that resulted in the proposed fine, he said most problems are small and airlines are known to quickly correct them once they are discovered. (Additional reporting by Chris Reiter and Ritsuko Ando; Editing by Tim Dobbyn and Jean Yoon)
