Pan Am agrees to pay $1.95 million penalties

WASHINGTON (AP) Pan American World Airways agreed yesterday topay nearly $2 million in penalties for safety violations uncovered bygovernment inspectors earlier this year.

The Federal Aviation Administration said the agency and Pan Amsettled on the fine after Pan Am reorganized and strengthened itsmaintenance operation, where most of the violations wereconcentrated.

FAA Administrator Donald Engen said Pan Am has taken promptaction to correct the deficiencies, including expanding itsmaintenance force by about 200 people. He said the airline isoperating safely.

Pan Am spokesman James Arey said about half the fine already hasbeen paid.

The FAA earlier this month notified Pan Am that it would seek$3.9 million in fines because of violations of federal air safetyregulations found during a two-month inspection that began last March10.

But, according to FAA officials, the fine was reduced to $1.95million after Pan Am representatives produced new informationconcerning the nature of some violations and the circumstancessurrounding them.

"We did not renegotiate the fine," said FAA spokesman BobBuckhorn. "The airline came in and provided us with added informationthat led us to re-evaluate the fine."

According to FAA officials, the inspectors who examined Pan Am'soperations last spring found hundreds of safety violations, most ofthem in the way Pan Am was conducting its maintenance and internalinspection programs.

Among the violations, according to agency inspectors, were thatPan Am: Operated planes that were not considered airworthy. For example, aBoeing 747 was flown 18 times although an aileron, a part on the wingsurface that provides lateral control, was out of alignment. Installed aircraft parts that had gone beyond their approved servicelife. In one case, a plane was flown 37 times after a landing gearshould have been overhauled. Operated aircraft with parts that needed repair and made somerepairs without using approved technical information.

The inspectors also found the airline did not make inspectionswithin required time limits and failed to keep adequate maintenancerecords or an accurate list of people authorized to performmaintenance.

Engen said that after the inspection was concluded May 9, theairline quickly moved to improve its maintenance operation and thatthe agency "is assured the airline continues to operate in a safemanner."

The settlement with Pan Am produced one of the largest finesever paid in connection with federal safety violations by a majorairline.

Last year, American Airlines agreed to pay $1.5 million inconnection with maintenance discrepancies found during a similarin-depth inspection.

Both figures, however, are dwarfed by the contested enforcementaction the FAA still has under way against Eastern Airlines. The FAAhas demanded that Eastern pay $9.5 million because of thousands ofsafety violations, mostly involving maintenance and record-keepingirregularities.

Eastern has argued that the fine is excessive and has refused topay.