FAA Proposes $12 Million Fine Against Southwest Airlines

Southwest Airlines Co. (LUV) may have to pay one of the largest fines in Federal Aviation Administration history for continuing to fly some airplanes after being told that repairs to the aircraft didn’t live up to U.S. regulations.

The FAA is proposing a $12 million civil penalty against Southwest, which carries the most passengers in the U.S., for operating “numerous flights” in 2009 with inadequate repairs to the fuselage skins. The maintenance in question was designed to eliminate potential cracks on 44 of the airline’s Boeing Co. 737s, according to a statement today by the FAA.

The fine would be the second major civil penalty against the Dallas-based airline for maintenance lapses since 2008.

The issues raised in the latest case were resolved and don’t relate to any aircraft currently used, Southwest said in an e-mailed statement. “Southwest is committed to continuously making enhancements to our internal procedures, as well as improvements related to oversight of our repair vendors,” it said.

The repairs to the aluminum skin of the planes were done by a Southwest contractor, Everett, Washington-based Aviation Technical Services Inc., according to the FAA. Under U.S. law, airlines are responsible for repairs made by other companies.

Southwest has 30 days to respond to the proposed fine. The FAA often lowers penalties after negotiating with airlines.

Previous Fine

Southwest in 2009 agreed to pay $7.5 million in a case where the airline had made almost 60,000 flights on 46 of its fleet of Boeing (BA) 737s without making repairs mandated by the aviation regulator. The FAA had originally proposed in 2008 fining the company a then-record $10.2 million before Southwest settled the allegations and agreed to a lower fine.

Since then, the FAA has also proposed a $13.2 million penalty against Boeing in 2012 for delays in making fuel-tank safety equipment available, and the agency sought $24.2 million against the former American Airlines Inc. for improper repairs.

Today’s proposed fine probably won’t lead to passenger safety worries, unless the FAA shows Southwest’s actions caused an injury or serious incident, Todd Curtis, founder of the website AirSafe.com and a former Boeing engineer, said in an interview.

“In general the penalties on paper may be so many dollars per occurrence,” Curtis said. “What usually ensues after that is some back and forth between the airline and the FAA.”

Southwest was little changed at $29.21 today. The Bloomberg U.S. Airlines Index of 11 carriers fell 1.02 percent.

Alleged Violations

In the latest Southwest case, workers at Aviation Technical Services starting in 2006 applied the aircraft skin repairs in an unapproved way that may have allowed moisture to penetrate the skin, leading to corrosion. Workers also didn’t apply fasteners in all the required rivet holes, according to the release.

During the work, ATS failed to properly support the planes, which may compromise the repair work, FAA said.

The company agreed to pay the FAA $275,000 to settle its portion of the case. “We are fully cooperating with the FAA and continuing to partner with Southwest Airlines,” it said in an e-mailed statement.

The agency also found other violations, including a failure to properly attach wires on two planes to protect against lightning strikes.

The airline flew each of those planes on more than 20 passenger flights after Southwest realized it was in violation, the FAA said.

“The FAA views maintenance very seriously, and it will not hesitate to take action against companies that fail to follow regulations,” FAA Administrator Michael Huerta said in the statement.

To contact the reporters on this story: Alan Levin in Washington at alevin24@bloomberg.net; Michael Sasso in Atlanta at msasso9@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net Elizabeth Wasserman

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