American Airlines was hit with a record $24.2 million fine by the Federal Aviation Administration on Thursday for failing two years ago to comply with mandatory safety rules.
American said it intends to fight the penalty, issued in response to a 2008 incident that caused the airline to ground some 300 McDonnell-Douglas MD-80 jets because wiring harnesses weren't fastened as required by a 2006 federal regulation.
"We put rules and regulations in place to keep the flying public safe," said Transportation Secretary Ray LaHood. "We expect operators to perform inspections and conduct regular and required maintenance in order to prevent safety issues. There can be no compromises when it comes to safety."
The groundings, which occurred in March and April 2008, affected more than 3,000 flights and more than 300,000 passengers while crews worked for days to finish wiring repairs and maintenance to comply with the 2006 FAA safety directive.
The FAA's proposed fine is more than double the largest proposed fine of $10.2 million levied against Dallas-based Southwest Airlines (LUV) in March 2008, The Dallas Morning News reported. Southwest settled with the FAA last year for $7.5 million.
American Airlines, a unit of Fort Worth, Texas-based AMR Corp. (AMR), has 30 days to appeal the penalty.
Investing in Startups
The lucrative and risky world of startups.View Course »