Airline groundings end, but U.S. scrutiny tougher

WASHINGTON (Reuters) - U.S. airlines can expect tougher safety scrutiny, but the worst disruptions from a government crackdown appear to be over, for now, following two weeks of aircraft groundings and mass flight cancellations.

With American Airlines running a normal schedule on Sunday after putting down 300 MD-80s and canceling more than 3,000 flights last week to reinspect and resecure wiring, and rivals having sidelined planes for similar or other problems since mid-March, the immediate shakeout driven by the Federal Aviation Administration (FAA) appears to have run its course.

The FAA is still investigating a handful of airlines for possible lapses in maintenance as part of an unprecedented industrywide review of compliance with its safety orders. But preliminary results of the audit, a response to congressional and other assertions this spring of some industry indifference to compliance and ineffective agency oversight, show 99 percent adherence, the agency said.

"Based on the high compliance we saw, we're optimistic we're not going to see problems like this again," FAA spokeswoman Laura Brown said.

FAA officials expressed public concern about compliance with a 2006 MD-80 wiring order. The agency worried improperly safeguarded wheel-well wires could be damaged over time and trigger an electrical short, possibly igniting a fire. American twice failed to satisfy FAA requirements on this issue.

Delta Air Lines Inc and Alaska Air Group grounded planes and canceled flights to address MD-80 wiring, but they, too, have addressed FAA concerns, both said.

American and Delta, with 130 MD-series planes, comprise the bulk of MD-80 flying by U.S. carriers. Alaska is phasing out the planes and has just a handful in service.

Groundings, political pressure, and a proposed record FAA fine of $10.2 million against Southwest Airlines Co in March for missing structural inspections have jolted an industry already losing altitude due to financial pressures.

"The FAA is stepping up surveillance and doing their job," American's Chief Executive Gerard Arpey said last week.

But Robert Mann, an airline consultant, sees an industry engaged in a very messy transition from a relatively lax environment for verifying compliance with FAA safety directives to a more rigorous approach.

FAA reassigned a senior safety official and two others while two Southwest maintenance employees have been moved to other jobs over the fiasco at that carrier, which centered on lapsed inspections for fuselage cracks.

"There are thousands of directives out there that require absolute compliance," Mann said.

One veteran lobbyist who has worked for airlines on safety issues said it is dawning on airlines the cozier way of doing business with the FAA is over. Potential fines as well as lost revenue from canceled flights -- as demonstrated by Southwest and American -- stretches into the tens of millions of dollars.

"That's a hell of a lot of money," he said.

Mann believes closer oversight and a greater willingness to act by the FAA could lead to more flight disruptions.

"When the FAA casts a wider net and looks at other (safety directives) and other planes, I think whether it's next week or next month we could see another episode with another aircraft type with other operators," Mann said.

John Goglia, a former mechanic and past member of the National Transportation Safety Board, is a recognized expert on maintenance. He believes Washington politics too heavily influenced FAA's crackdown on American and criticized the groundings, but he said other issues need fast attention.

"I hope these events drive the FAA and the industry and manufacturers to review their maintenance manuals and how they are written," Goglia said.

How American maintenance personnel interpreted the FAA order on MD-80 wiring is a key question in that case. Goglia said mechanics are often stuck with overly complex instructions to a problem that requires immediate and correct action. Trouble-shooting is too common, he said.

As part of its initiative to increase accountability, the FAA has said it plans to improve clarity of its directives as well as enhance the embattled system used by airlines to voluntarily report compliance with safety orders.

The FAA issues about 250 directives annually on more than 83 aircraft and engine models. Many require repeat structural checks of aging aircraft, The Boeing Co 737s involved in the Southwest case and much of the MD-80 fleet are both older.

(Editing by Maureen Bavdek)