American Airlines faces $24M penalty over maintenance

DALLAS - Federal officials are seeking a record penalty of $24.2 million against American Airlines over maintenance lapses that caused thousands of canceled flights in 2008.

American said the civil penalty was unwarranted and it would appeal.

The dispute dates to 2008, when American had to cancel more than 3,000 flights - inconveniencing 350,000 passengers - until wiring could be fixed to the satisfaction of the Federal Aviation Administration.

The FAA said yesterday that the improper harnessing of wires on American's McDonnell Douglas MD-80-series jets - about half its fleet at the time - could have led to fires and even fuel-tank explosions. It said American flew more than 14,000 flights with planes that didn't meet the wiring requirements.

American has claimed that the FAA's concerns were overblown, and that passenger safety was never jeopardized.

"These events happened more than two years ago, and we believe this action is unwarranted," said American spokesman Tim Smith.

Airlines routinely challenge or negotiate FAA penalties. However, if upheld, the penalty against American would top the previous record of $9.5 million levied against Eastern Airlines in 1987 for delaying required maintenance work. Eastern went out of business after paying only about $1 million.

American officials have said the dispute is over a minor matter of leaving too much space between sleeves that hold bundles of wire together.

The FAA imposed the wiring rule after three operators reported electrical shorting in wires looped through the MD-80's wheel wells.

"We expect operators to perform inspections and conduct regular and required maintenance in order to prevent safety issues," said Transportation Secretary Ray LaHood, whose department includes the FAA. "There can be no compromises when it comes to safety."

A large safety penalty would add to American's financial and image problems. Parent AMR Corp. was the only major U.S. airline company to lose money in the second quarter, and the carrier is beset by labor issues involving its mechanics, flight attendants and pilots.