Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

FAA hits American Airlines with biggest fine ever

By Aaron Smith, CNNMoney.com staff writer


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."

Lunsford said that Southwest Airlines (LUV, Fortune 500) had previously been the recipient of the biggest FAA fine -- of $10.2 million -- which it was able to negotiate down to $7.5 million. To top of page

Search for Jobs

Index Last Change % Change
Dow 18,570.85 53.62 0.29%
Nasdaq 5,100.16 26.26 0.52%
S&P 500 2,175.03 9.86 0.46%
Treasuries 1.57 0.00 0.32%
Data as of 4:14pm ET
Company Price Change % Change
Chesapeake Energy Co... 5.39 0.42 8.45%
General Electric Co 32.06 -0.53 -1.63%
Bank of America Corp... 14.38 0.11 0.77%
Southwestern Energy ... 14.47 1.26 9.54%
PayPal Holdings Inc 37.42 -2.71 -6.75%
Data as of Jul 22
Sponsors

Sections

HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More

With one exception, every vice presidential candidate in the past 40 years has released a tax return. Given that Donald Trump hasn't released his tax returns, will Mike Pence be the second exception? More

The augmented reality app had more iOS downloads its first week than any other app in history. More