Pan Am to Pay $1.95 Million in Safety Fines

The Federal Aviation Administration, citing hundreds of violations of maintenance requirements, said Friday that it had fined Pan American World Airways $1.95 million, the second largest safety penalty ever levied against a U.S. airline.

Pan Am, the country’s sixth-ranking airline, agreed to pay the fine without admitting guilt. FAA Administrator Donald D. Engen said Pan Am had taken “very positive” corrective action, including the hiring of 200 personnel, and that the agency is “assured the airline continues to operate in a safe manner.”

In its announcement, the FAA disclosed that it had proposed a $3.9-million fine on Aug. 1 but had cut the figure by half after Pan Am presented “additional information”--including, government sources said, evidence that FAA personnel had been aware of some of the practices the agency was citing.

Eastern Has Record Fine

Earlier this year, the FAA imposed a $9.3-million fine on Eastern Airlines for more than 78,000 alleged violations of safety regulations, but Eastern refused to pay more than $3.5 million, contending that the charges and the fine were unfair. The FAA then asked the Justice Department to take action to collect as much as $78 million from Eastern--$1,000 for each of the alleged violations. So far, no action has been taken on the request.

Before the Eastern case, the largest penalty levied by the FAA had been a $1.5-million fine paid by American Airlines last September, an amount three times larger than any previously imposed against a U.S. air carrier.

In citing Pan Am, the FAA said it found in a special two-month inspection last spring that the airline operated planes that were not considered airworthy, installed aircraft parts that already had exceeded their approved service life, failed to report maintenance discrepancies to the FAA as required, made some repairs without using approved technical information and allowed unqualified personnel to work on its planes.

Pan Am’s vice chairman and chief operating officer, Martin R. Shugrue, contended in a statement Friday that “the majority of the discrepancies were administrative, or paper work, in nature” and that none compromised safety of passengers, flight crews or ground personnel.

However, in a 24-page letter to Pan Am dated Aug. 1, the FAA repeatedly accused the airline of operating “an aircraft which was not in an airworthy condition” and operating “an aircraft in a careless or reckless manner so as to endanger the lives and property of others.”

Aircraft Maintenance Log

In one instance, the FAA said that, when a Pan Am 747 landed at Los Angeles International Airport last Feb. 28, the following entry was made in the aircraft maintenance log: “ . . . No. 3 throt(tle) dangerous. Vibrated back almost to idle on (takeoff Frankfurt). Runway was rough. Has to be fixed or will cause (runway) excursion on slick or icy runway.”

“No corrective action was taken, and the entry in the maintenance log states ‘unable to accomplish due time,’ ” the FAA said. The problem was not corrected until March 17, after “approximately 39 flights when the aircraft was in an unairworthy condition,” the agency said.

The FAA also cited instances in which Pan Am had failed to comply with required time limitations for overhauls, inspections and safety checks. For instance, it said, the airline operated a Boeing 727 on 91 flights after the 18,000-hour mark when its main landing gear was to have been overhauled.

And the agency inspectors listed dozens of instances in which planes were returned to service without repair or evaluation of such problems as cracked wing ribs, leaky fuel tanks and corroded cargo bay floors.

‘Very Positive’ Actions

In response to the FAA’s findings, Engen said, the airline had “revamped and expanded its quality control organization, reorganized planning and production control, reorganized its maintenance organization and increased its engineering staff.”

“These actions are very positive,” he said. “However, Congress has mandated, and the public expects, full accountability for an air carrier’s failure to comply with Federal Aviation Regulations.”

After the FAA proposed a fine of $3.9 million on Aug. 1, the agency said Pan Am presented “additional information . . . concerning the nature of some violations and the circumstances surrounding them” and that the FAA then decided $1.95 million “was an equitable penalty.”

The FAA statement did not elaborate, but sources said Pan Am argued that the agency’s special inquiry was citing the company for failing to report some repairs as major when, at the time the repairs were made, government inspectors had not disagreed with the airline’s assessment of the repairs as minor. Regulations require more extensive reports from airlines on major repairs.