The US Department of Transportation has reached a settlement with American Airlines over claims the world largest's carrier discriminated against passengers it thought were of Middle Eastern or South Asian descent.

The Transportation Department said in the period immediately following the September 11, 2001 attacks on the United States, American was accused of unlawfully removing passengers from flights or denying boarding based on race, nationality or religion.

"The settlement order finds that American acted in a manner inconsistent with federal laws that prohibit discrimination," the department said in a statement.

It also requires American, without admitting to wrong doing, to provide civil rights training to its employees over the next three years at a cost of at least USD$1.5 million in order to resolve the allegations and avoid litigation.

"American and American Eagle steadfastly deny that their employees discriminated against any passengers on the basis of race, color, national origin, religion, sex or ancestry following the events of September 11, 2001," the carrier said in a statement. American Eagle is a regional jet airline affiliated with American.

In November 2003, United Airlines agreed to an almost identical settlement when it was faced with similar charges. Both American and United planes were taken over by hijackers and used in the September 11 attacks.

"Concerns about aviation security in the days following the September 11, 2001 attacks do not justify illegal discrimination against passengers," said US Transportation Secretary Norman Mineta.

(Reuters)