Southwest Grounds Planes over New Maintenance Glitch

Southwest Airlines Co (LUV.N) said on Wednesday it had grounded more than three dozen planes, cutting 4 percent of its scheduled flights, due to another glitch in ensuring safety inspections are completed.

The groundings come after the Federal Aviation Administration last week proposed a record $10.2 million fine against the airline, charging it missed deadlines to inspect planes for structural flaws during 2006 and 2007.

Southwest normally operates 3,400 scheduled flights each day and only uses Boeing Co (BA.N) 737 aircraft. It ended 2007 with a fleet of 520 737s.

Shares of Southwest fell 7.3 percent to close at $11.49 on the New York Stock Exchange. Shares of U.S. airlines were broadly lower on high fuel prices and a report cutting ratings on several airlines from JP Morgan analyst Jamie Baker.

Southwest said in a statement that it discovered "an ambiguity" in maintenance records on 44 planes and decided to "take a conservative approach" and take them out of service for reinspection.

Southwest did not disclose the specific problem but the FAA said it was related to an agency inspection requirement for window areas on 737-300 and 737-500 aircraft. The FAA said Southwest grounded the planes until it could verify that it correctly followed instructions for the inspections.

The airline said one plane was already retired, five more were in maintenance for scheduled work, and the remaining 38 were taken out of service. The reinspections should be completed by Wednesday night, the carrier said.

Southwest said its ongoing internal review of its maintenance programs could result in additional operational changes.

The effect of the groundings on Southwest's financial performance was not clear. The airline did not return a call seeking further information on its decision.