coolbeans202

According to the Wall Street Journal:

"The Federal Aviation Administration is seeking a record $162.4 million of proposed and potential civil penalties from American Airlines parent AMR Corp., according to court documents in the company's bankruptcy case.

The previously undisclosed investigations into alleged safety and maintenance infractions by American and its affiliates are the most dramatic indications yet of extensive FAA concerns about the effectiveness of American's maintenance system, seemingly shared by many agency inspectors and managers directly overseeing the carrier as well as their bosses in Washington...

...Because the agency had to file its claims by the July 16 deadline in the AMR Chapter 11 case, a number of major probes are still under way and American hasn't received formal penalty letters about them. The largest potential penalties listed for individual enforcement cases are $39.3 million, $28.8 million and $27.6 million...

...The $39.3 million penalty for American stems from allegedly failing in 2009 to properly carry out mandatory safety fixes to wire bundles between the engines and wings of certain Boeing 757 jets...

...The proposed $28.8 million penalty stems from allegedly improper procedures during Boeing 777 landing gear overhauls and incorrect testing of the gear assemblies...

...The recommended $27.6 million penalty involves American's alleged failure to apply cadmium plating as part of a required modification to Boeing 767 engine nacelle mounts and wing structures..."

Lots of others listed in the article as well.

Link: http://online.wsj.com/article/SB1000...664284330.html

Note: If you Google the headline you should be able to view the article for free via Google News

vail

"I am shocked--shocked to find out that gambling is going on in here"
Captain Louis Renault

AAExPlat

Let's all take a deep breath...first of all, these are claims going back as far as 5 years. On top of that, you will notice that these are proposed amounts, not settled amounts. That means that AA will pay only a fraction of this absurd "fine". Third, the FAA on the ground in DFW in many cases requested MUCH smaller fines, only to have Washington increase the fines by factors as high as 20x.

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Incidentally, it is worth pointing out that sticking AA with this kind of a claim will further hasten the outsourcing of maintenance work to places like Hong Kong and away from places like Tulsa, thereby eliminating US jobs.

SethLevy

Pretty egregious conduct on AA's part if true, regardless of the final penalty amounts levied.

BrianV

I kind of agree, especially considering most people consider AA to be one of the safest airlines in the air. To not perform maintenance correctly is disconcerting. If you look into many air disasters, improper maintenance and cutting corners is responsible for many unnecessary tragedies.

Just two examples off the top of my head:
http://en.wikipedia.org/wiki/Alaska_Airlines_Flight_261
http://en.wikipedia.org/wiki/Contine...ss_Flight_2574

ThunderJon

Proposed fine level is strangely close to AAMRQ marketcap? Coincidence or someone being greased to help a 3rd party interest...

CubsFanJohn

Is it me or does it seem like there is a fundamental problem in the MX Department at American Airlines? It seems like every few years we hear about an issue similar to this.

Thunderroad

<redacted>

Regardless of what level of fine is appropriate - and without much more information, we don't know whether the Dallas or DC office's price was right - it is troubling that AA let these maintenance problems drag on. I'd much rather that the government err in favor of overseeing this and making it pay for those maintenance shortcomings, as opposed to less oversight.

AAExPlat

There is definitely a problem. But at the same time, let's remember that much of this is warmed up stuff (like the md80 issue)...

Like I said...much of this work is going overseas soon, so increased and expedited work will be far cheaper.

skunker

<redacted>

I propose a more reasonable rationale for the increase between the Dallas office proposed fine and the actual fine levied. From the article:

Dallas FAA suggests a $2M fine. Washington FAA office <redacted> knows AA will fight it and get it lowered so they raise it to make a statement knowing these were serious issues and the fines should reflect that, so they propose a $25M fine. Sometime down the line AA pays a fine around the original amount proposed by Dallas office. The end. <redacted>

Stripy

<redacted>

I guess there's also the possibility that Washington took the position that the Dallas office (based in AA's hometown) took a far too lenient approach to an infraction on it's own turf. Perhaps they consider the relationship between the Dallas regulators and Dallas based AA to be too cosy?

I'm not saying that this is what happened...just pointing out that there are other reasons that may explain the increase in the fine.

AAExPlat

<redacted> Agree that you could be right. But my personal experience with regulators other than the FAA suggests an explanation that is less benign.

Agree. That is certainly a possibility, as well. The problem is that if the FAA was indeed dissatisfied with its employees in Dallas, then they would have the recourse to assign a new team to Dallas and reassign the existing team elsewhere. Since there is no mention of such an action, I find this scenario less plausible.

If anything, the theory put forward by skunker is more likely since it would in essence be a negotiating strategy...no more, no less.

grahampros

That would really not be too much of surprise that there would be an issue in MX at AA. Given the labor strife, bad feelings ( justified or not) towards management in recent years ,and the extreme focus on cost cutting, it's almost to be expected.

FlyerChrisK

The same issues have occurred on other airlines. In early 2011, United grounded most of its 757's very briefly due to sloppy MX work.

grahampros

There is a key difference here on the UA incident. UA itself caught the oversight and grounded the fleet. The FAA didn't even know about the oversight until UA notified them of it.

That has not been the pattern at AA. Inspectors had to go find it and notify AA.