FAA seeks payment of $10.2 mln Southwest fine

WASHINGTON (Reuters) - Regulators upheld a record $10.2 million fine against Southwest Airlines Co for alleged safety violations and want payment this month, the U.S. Federal Aviation Administration said on Friday.

The FAA said in a letter to the airline and its legal counsel this week that the civil penalty "is appropriate" and would remain at the proposed amount.

The agency said it would turn the matter over to the Justice Department if payment was not received by August 29.

Southwest said the notification "was part of the process" and the company was reviewing its options. It declined to comment further.

Southwest met in April with FAA officials as part of an informal review of the fine proposed in March for alleged maintenance shortcomings.

It is common for airlines to appeal fines, and in many cases the penalty is reduced.

The FAA said Southwest had failed to inspect Boeing 737s for structural cracks and continued to fly those aircraft even after notifying the agency that it had missed a deadline to complete the work.

Southwest, the biggest U.S. airline by market value and the healthiest financially among major carriers, said it responded appropriately to the problem and never compromised flight safety.

The FAA said there were no safety incidents related to the missed inspections.

The case was triggered by whistle-blower complaints to Congress, which put pressure on the FAA to step up safety oversight of the industry.

The FAA on Thursday proposed a $7.1 million fine against American Airlines, a unit of AMR Corp, for alleged safety violations and other problems.

American called the penalty excessive.

(Reporting by John Crawley; editing by Braden Reddall)