FAA proposes $7.1 million fine against American

WASHINGTON (Reuters) - American Airlines, a unit of AMR Corp, knowingly flew planes that needed safety repairs, the U.S. government charged on Thursday in a letter that proposed a $7.1 million fine against the carrier.

The Federal Aviation Administration (FAA) said the fine, one of the biggest ever, also covered accusations of deficiencies in American's drug and alcohol testing programs and alleged violations of inspection procedures for aircraft exit lighting.

American, which can appeal the civil fine, said it had requested a meeting with FAA officials.

"We do not agree with the FAA's findings and characterizations of American's action in these cases," the company said in a statement. "We believe the proposed penalties are excessive."

The FAA proposed a $10.2 million fine against Southwest Airlines Co earlier this year for continuing to fly planes that regulators said had not been properly inspected. That penalty has not been finalized.

About two thirds of the fine against American involves alleged maintenance lapses on two MD-83s in December 2007, the FAA said.

It informed American last December that it had improperly deferred maintenance on an autopilot system but flew the plane on 10 more flights before fixing it.

Later that month, maintenance personnel failed to thoroughly check the same plane for another problem, again deferring work after consulting the wrong equipment guidelines, the FAA said.

In another MD-83 incident, personnel deferred work again using the wrong equipment guidance and failed to detect an autopilot problem, the FAA said.

"The aircraft operated four (flights) without a fully functioning autopilot," the agency said.

Regulators believe the fine is appropriate because American was aware that the repairs were needed on the two planes and deferred action.

"In intentionally continuing to fly the aircraft the carrier did not follow important safety regulations intended to protect passengers and crew," the FAA said.

The proposed fine was also unrelated to recurring inspection lapses involving MD=80 series aircraft this past spring.

American canceled more than 3,000 flights over several days in April after FAA inspectors, under pressure from Congress to toughen its oversight of industry, uncovered inspection shortcomings and incomplete safety work on American's MD-80 fleet.

Other airlines were also cited for inspection lapses and had to ground planes and cancel flights.

(Editing by Carol Bishopric and Tim Dobbyn)