Southwest Airlines Co (NYSE: LUV) Hit With $12 Million Fine

On Monday, the Federal Aviation Administration (the FAA) stated that it will propose a fine of $12 million against Southwest Airlines Co (NYSE: LUV). The reason for the fine according to the FAA is that the airlines failed to comply with safety regulations regarding the Boeing 737 aircraft.

Southwest launched an extreme makeover program in 2006 in order to repair and remove any potential cracking on the aluminum cover of the company’s 44 aircrafts. After an investigation by the FAA, it was revealed that the company’s contractor, Aviation Technical Services Inc, based in Everett, Washington, did not follow the correct procedures for replacing the fuse parts, in addition to other work on the aircrafts. All of the repairs and work were performed under Southwest’s supervision, who was responsible for ensuring that the work was done properly.

Southwest brought the plane back to commercial service in 2009. They began flying the aircrafts despite the fact that the FAA marked the aircrafts as not complying with with the safety regulations.

During the FAA’s investigation, the government entity also discovered that the workers of the Aviation Technical Services put sealant underneath the new outer skin boards, but did not put in fastenings in all of the bolt holes quickly enough for the sealant to be completely effective.

Additionally, the contractor also did not meet requirements to correctly put the planes on jacks and shore them up while they were undergoing repairs. According to the FAA, if the plane is improperly shored while its skin is being repaired, the aircrafts frame could shift and cause issues with the new skin.

Southwest also did not properly put in a ground wire on masts for water drain on two of its Boeing 737 aircrafts. The airline put in this repair in order to prevent lightening strikes. These planes had flown more than 20 passenger flights before Southwest realized the issue and pulled the planes from usage.

In a statement by Michael Huerta, the administrator of the FAA stated that the FAA takes and views maintenance very seriously, and will not hesitate to take action against companies and entities that do not follow these regulations.

As of yesterday, Southwest Airlines has been given 30 days to respond to the allegations and proposed fine. Typically, the FAA officials would engage in extensive negotiations with airlines that are hit with such large fines before settling on an amount. However sometimes airline officials and regulators are not able to reach an settlement and the airline disputes the fine.

Southwest did not respond immediately for a statement.