Last year FAA ordered Southwest to pay $10.2 million, which would have been the largest fine in the agency's history. The airline protested the fine and had been in negotiations with FAA for the past year.
The largest fine against an airline by FAA remains a $9.5 million penalty against Eastern Airlines in 1987 that wasn't fully paid because the airline went bankrupt. The $7.5 million settlement agreement with Southwest marks the next largest, FAA spokeswoman Laura Brown said.
The airline was fined for flying 46 airplanes on 59,791 flights without performing mandatory inspections for fuselage cracks. The planes, mostly Boeing 737s, carried an estimated 145,000 passengers.
Federal investigators charged FAA's cozy regulatory climate with airlines led to the suppression of whistle-blower complaints against Southwest. After the allegations were made public, FAA announced stepped-up inspection efforts of all carriers' maintenance records, leading to hundreds of planes being grounded in early 2008.
The settlement agreement also requires Southwest to pay an additional $7.5 million if it does not accomplish 13 safety-related steps, including:
--Increasing by eight the number of on-site technical representatives the airline has at companies that perform major maintenance on its airplanes.
--Allowing FAA inspectors improved access to information used for tracking maintenance and engineering activities.
"This agreement furthers aviation safety by requiring important improvements to the airline's safety program. Some of those safety measures exceed FAA regulations," said FAA Acting Administrator Lynne A. Osmus.
Southwest said in a statement: "This settlement with the FAA will allow us to focus on safety going forward, rather than on issues that are behind us and that have since been addressed."
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