NEW YORK (CNNMoney.com) -- Federal aviation regulators slapped American Airlines on Thursday with the largest fine in history, charging that the carrier made thousands of unsafe flights.
The Federal Aviation Administration said it has "proposed" a $24.2 million civil penalty for American Airlines' failure to properly inspect wire bundles in the wheel wells of its MD-80 aircraft. The incident snarled thousands of flights in 2008.
The airline, owned by AMR Corp., (AMR, Fortune 500) did not follow the guidelines in the so-called 2006 Airworthiness Directive, which was intended to prevent wires from shorting, which could cause a loss of power and possibly a fire, the FAA said.
The airline's stock price is down 1.7%.
The FAA inspections resulted in the grounding of about 1,000 American Airlines flights in early April, 2008, after the FAA found that the airline did not properly inspect two of its airplanes.
As part of that inspection, the FAA determined that the airline operated 286 of its MD-80s on a total of 14,278 flights "while the aircraft were not in compliance with federal regulations."
FAA spokesman Lynn Lunsford said the fine is considered a proposal as a legal formality, because the airline has 30 days to respond and has the option of negotiating a smaller fine.
"There was never a flight safety issue," American Airlines spokesman Tim Smith told CNNMoney.com in an email.
"These events happened more than two years ago and we believe this action is unwarranted," he said. "We will challenge any proposed civil penalty. We are confident we have a strong case and the facts will bear this out."
Even Carl Icahn, one of President-elect Donald Trump's biggest cheerleaders on Wall Street, thinks the post-election exuberance in the stock market has gotten a bit out of hand. More
Republican leaders keep saying Obamacare is hurting the economy and killing jobs, but there's scant evidence for it. In fact, a number of studies show that the economy has been growing. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The Los Angeles city attorney is suing four major retailers over claims that they deliberately inflated the original price on some items that misled customers into thinking they were getting a better deal. More