HuronIP

UPDATE: Southwest To Pay $7.5 Million In Safety-Inspection Case

By Josh Mitchell

Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- Southwest Airlines Co. (LUV) will pay $7.5 million in civil penalties under an agreement with the U.S. government that stems from the airline's failure to perform mandatory checks on jets for potential fuselage cracks.

It is the second-highest civil fine levied by the government against an airline, a Federal Aviation Administration spokeswoman said. The fine could double to $15 million if the airline fails to put in place specific safety measures outlined in the agreement announced Monday by the FAA.

The settlement stems from a civil penalty proposed a year ago against Southwest for operating nearly 60,000 flights on 46 Boeing 737 jets airplanes that hadn't received mandatory checks for potential fuselage cracks. Hundreds of thousands of passengers flew on the aircraft from June 2006 to March 2007, when Southwest voluntarily disclosed the missed inspections to local officials in the FAA's Dallas office.

Federal aviation regulators initially proposed a record $10.2 million fine against the airline, which it accused of serious and deliberate safety violations.

Under the agreement with the FAA, the airline will pay three installments of $ 2.5 million, with the first payment due within 10 business days. A second payment will be due by Jan. 15, 2010, and a third by Jan. 15, 2011, the FAA said in a statement.

Southwest Airlines will pay an additional $7.5 million if it does not carry out 13 additional safety-related requirements, the FAA said. Those steps include increasing the number of onsite technical representatives for heavy-maintenance vendors and granting more access to FAA inspectors to records for tracking maintenance.

Southwest spokeswoman Beth Hardin said the company was pleased to reach a settlement with the FAA and continued to work with the agency to "ensure the highest degree of safety for the public."

"This is going to allow us to focus on safety going forward rather than on issues that are behind us and have been addressed," Hardin said.

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@ dowjones.com

(Andy Pasztor of The Wall Street Journal contributed to this story.)