Safety Instructions Lapse to Cost Boeing $12M

(CN) - Boeing will pay $12 million after missing a deadline to submit safety instructions with the aim of reducing fuel-tank explosion risks, the Federal Aviation Administration said.

Under the terms of a settlement the agency announced Tuesday, Boeing must also take a series of steps to improve the safety certification of its aircraft and its production quality control.

The settlement is the second largest the FAA has ever handed down for regulatory violations, the agency said in a written statement.

But it warned the manufacturing giant that it could face additional fines of up to $24 million over the next five years if the Chicago-based company does not fully implement the terms of the settlement.

The potential for fuel tank explosions on commercial airliners came under greater scrutiny by the FAA and the industry at large after the explosion and crash of TWA Flight 800 off the coast of Long Island, N.Y. on the evening of July 17, 1996.

All 230 on board were killed, and although there was initially much speculation that a possible terrorist attack brought down the Boeing 747-131, investigators from the FBI and the National Transportation Safety Board concluded that the probable cause of the disaster was the ignition of fuel vapors in a fuel tank by a short circuit in the plane's electrical wiring.

Since then, the agency has grown increasingly restive over the amount of time it has taken for Boeing to provide information about the installation of equipment that would reduce the likelihood of a fuel tank fire on its 747 and 757 aircraft.

FAA investigators also expressed concern over what the agency described as "the company's insufficient corrective action after discovering that a supploer had been providing incorrectly shaped fasteners."

That issue arose in Sept. 2008, when Boeing discovered that it had been installing nonconforming fasteners on its model 777 airplanes. In Oct. 2008, the FAA sent Boeing a letter of investigation that requested a response within 20 working days.

The agency later alleged that Boeing repeatedly submitted action plans that set deadlines for the accomplishment of corrective actions, but subsequently failed to implement those plans.

Boeing said in a statement that the settlement agreement reflects the parties' " deep and shared commitment to safety, quality and compliance."

Boeing believes that this agreement not only fairly resolves announced and potential civil penalty actions - most of which date back years, and two of which were previously announced in 2012 and 2013 - but also will further enhance Boeing's self-correcting quality and compliance systems," the statement said.

"As a company we take responsibility for our actions, and we will never compromise on our commitment to quality and compliance - a commitment that is one of the core reasons we build the best airplanes in the world. We are actively working on the areas identified in the agreement and see this as another way to continually improve our compliance system," the company said.

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