Deregulation doesn’t work: Airlines - $25 million for lack of Maintenance on airplanes

American Airlines is facing a fine of $25 million or more because of maintenance lapses that led to the cancellation of some 2,500 flights in 2008, according to Friday report in The Wall Street Journal. Citing people familiar with the matter, the newspaper said some managers at the Federal Aviation Administration had sought penalties as high as $100 million, though that was later rejected by officials. The 2008 cancellations at American Airlines stranded some 300,000 customers over a three-day period with the carrier grounding most of its MD-80 fleet.

Reports: American Airlines facing fine of $25 million

The FAA is poised to slap a record penalty of $25 million or more against American Airlines for maintenance lapses involving wiring in the MD-80 jet that caused flight cancellations in 2008, according to reports Thursday.

NBC News said the official fine letter wasn't expected to be sent for a week or more and that the precise amount could change. It is expected to be the largest fine levied against a U.S. airline.

The Wall Street Journal, citing unnamed sources, reported on its website that the move would cap months of internal government debate and efforts by American to head off such a penalty by enhancing its maintenance procedures and taking other steps.