American Airlines faces hefty fine

The US government is close to proposing a substantial fine against American Airlines for alleged maintenance and inspection violations that led to the grounding of hundreds of planes and the cancellation of thousands of flights in 2008.

A source familiar with the matter said the decision by safety regulators was expected soon and the fine would likely be significant.

The Wall Street Journal reported on Thursday that the Federal Aviation Administration fine could reach USD$25 million.

The FAA said it would not comment on a pending enforcement investigation.

American said it was unaware of any possible fine.

"This is something that happened more than two years ago, and we haven't received any notification by the FAA about any pending action, nor do we believe any action is warranted," an American Airlines spokesman said in a statement.

Aviation industry and safety insiders have long expected the FAA to slap American with a penalty that would at least rival the record USD$10 million fine proposed against Southwest Airlines for alleged inspection shortcomings on certain Boeing 737s in 2006 and 2007. As part of a settlement, Southwest agreed to pay USD$7.5 million.

Airlines usually pay less than the government initially proposes.

The case against American stemmed from stepped up safety inspections of the carrier by the FAA, which at the time was under pressure from Congress to tighten oversight of the industry.

FAA inspectors said they found problems with wheel well wiring in MD-80 series planes, prompting the company to ground 300 of the workhorse jets and cancel flights affecting 300,000 passengers over several days in the spring of 2008.

American said it addressed the FAA's concerns before putting planes back into service.

(Reuters)