American Airlines has agreed to pay the Federal Aviation Administration $24.9 million to settle $162 million in safety claims made by the agency.
According to bankruptcy documents filed on Thursday, American agrees to also perform additional training of its maintenance personnel and increase its oversight of third-party maintenance providers.
"This settlement recognizes the many changes, including enhancements to our maintenance and engineering processes, increased training, inspections, and audits that have taken place at American over the past several years that address past FAA concerns," said American spokeswoman Andrea Huguely. "The safety of our people and our customers always has been – and always will be – our top priority."
After American's parent company, AMR Corp., entered bankruptcy, the FAA filed several claims with the bankruptcy court to potentially fine AMR up to $162 million as part of ongoing safety investigations.
One of the claims relates to American's MD-80 fleet which the FAA grounded in 2008 after finding improper wiring around the landing gear of the aircraft. About 3,000 flights were canceled as a result during one week in April 2008. In 2010, the FAA proposed a $24.2 million fine against American.
An FAA spokesman said the agency agreed to reduce the claim amount in the settlement because American had made several safety and compliance improvements that have an estimated value over $50 million.
American did not admit to any wrongdoing as part of the settlement, court documents said.
The settlement with the FAA requires bankruptcy court approval. A hearing is tentatively set for May 30 with objections to the settlement due to the court on May 23.