Southwest set to challenge FAA penalties


Southwest Airlines Co., five months after regulators demanded that it pay a record $10.2 million penalty for safety violations, has decided to fight the proposed punishment.

Barring a last-minute resolution, the dispute appears to be headed for court after lawyers for the airline and the Federal Aviation Administration have dug in to opposing positions and appear to be running out of time to compromise.

In March, the FAA proposed the largest civil penalty ever lodged against a U.S. carrier, saying Southwest knowingly flew 46 older-model Boeing 737s without performing mandatory structural inspections. The incident touched off a firestorm of controversy.

Gary Kelly, Southwest’s chief executive at the time and now chairman, struck a contrite tone in the days following the FAA’s announcement, but after months of negotiations, both sides are refusing now to back down. Ten days ago, the FAA said it had no intention of reducing the size of the penalty because of the serious nature of the safety lapses. In a letter, the agency notified the airline that it expected payment by Friday.

In a telephone conversation with FAA officials Tuesday, the airline told the agency “we do not intend to pay,” according to spokeswoman Beth Harbin. She said that Southwest officials hope “we can continue to resolve the matter amicably, however long that may take,” but “we don’t know what the FAA will do now.” In seeking a compromise “on what is appropriate for the events as they unfolded,” the spokeswoman added, “we simply don’t agree with [the penalty] and want to talk about it further.”

FAA officials have privately stressed that they don’t intend to continue talks into September. An FAA spokeswoman declined to comment, except to say that “we’re continuing our discussions this week.” Typically, the next step is for the agency to ask the Justice Department to file suit on its behalf.

With a number of other sizable enforcement cases already pending against other carriers it would be problematic for the FAA’s leadership to back down now.

The FAA said in March that hundreds of thousands of passengers flew on the affected aircraft from June 2006 to March 2007, when Southwest voluntarily disclosed the missed inspections to officials in the FAA’s Dallas office. Instead of having the aircraft grounded immediately, local agency officials gave verbal approval for Southwest to keep flying the planes for more than a week while checks were completed. The mandatory inspections were to look for cracks in certain parts of the fuselage that could weaken the aluminum skin and result in potentially dangerous fractures or even decompressions during flight. The size of the penalty, the FAA said in its original announcement, “reflects the serious nature of those deliberate violations.”