FAA proposes 3.8 million fine against American

By John Crawley

WASHINGTON (Reuters) - American Airlines, a unit of AMR (AMR.N), knowingly flew planes that needed safety repairs, the U.S. government charged on Thursday in a letter that proposed a $7.1 million (3.8 million pound) fine against the carrier.

The Federal Aviation Administration (FAA) said the fine, one of the biggest ever, also covered accusations of deficiencies in American's drug and alcohol testing programs and alleged violations of inspection procedures for aircraft exit lighting.

American, which can appeal the civil fine, said it had requested a meeting with FAA officials.

"We do not agree with the FAA's findings and characterizations of American's action in these cases," the company said in a statement. "We believe the proposed penalties are excessive."

The FAA proposed a $10.2 million fine against Southwest Airlines (LUV.N) earlier this year for continuing to fly planes that regulators said had not been properly inspected. That penalty has not been finalized.

About two thirds of the fine against American involves alleged maintenance lapses on two MD-83s in December 2007, the FAA said.

It informed American last December that it had improperly deferred maintenance on an autopilot system but flew the plane on 10 more flights before fixing it.

Later that month, maintenance personnel failed to thoroughly check the same plane for another problem, again deferring work after consulting the wrong equipment guidelines, the FAA said.