US FAA close to fine against American Airlines-source

WASHINGTON/CHICAGO, Aug 20 (BestGrowthStock) -The U.S. government
is close to proposing a substantial fine against American
Airlines, a unit of AMR Corp (AMR.N: ), 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 $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 $10 million fine proposed against Southwest
Airlines (LUV.N: ) for alleged inspection shortcomings on certain
Boeing 737s in 2006 and 2007. As part of a settlement,
Southwest agreed to pay $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 jetliners 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.

(Reporting by John Crawley in Washington and Kyle Peterson
in Chicago, editing by Vicki Allen)

US FAA close to fine against American Airlines-source