The US airline industry, already burdened with massive losses stemming from high costs and low fares, faces millions of dollars in additional costs as federal authorities push carriers to replace the insulation on some planes.

The Federal Aviation Administration in 2000 required that the insulation on certain models made by McDonnell Douglas be replaced, following the investigation of Swissair Flight 111, which crashed off the coast of Nova Scotia in 1998.

The deadline for the replacement is June 30, 2005.

US airlines have to replace the insulation blankets covered with metalized Mylar on about 600 planes -- the Boeing MD-80, MD-88, MD-90, DC-10 and MD-11. Boeing bought McDonnell Douglas in 1997.

In 2000, the FAA estimated the total cost of retrofitting 719 aircraft at about USD$368.4 million. Even with some of those planes sold or placed in long-term storage, the cost of retrofitting each plane would be more than USD$500,000.

The airlines have refused to comment on the cost of retrofitting the planes.

The deadline and the associated costs are looming over the industry at a time when every US carrier except Southwest Airlines, JetBlue Airways and ExpressJet, has been posting quarterly losses while cutting costs drastically.

"Any expense right now is bad timing for airlines, since most of them are in a cash crunch," Calyon Securities analyst Ray Neidl said. "But safety comes first."

The US airline industry has lost more than USD$30 billion since September 11, 2001, as fear of travel and a weak economy slowed demand for travel. Even though a recovering economy brought more travelers back onto planes, competition in the industry pushed fares lower and soaring jet fuel prices compounded problems, pushing five airlines into bankruptcy.

American Airlines, which in January reported a wider quarterly loss than a year earlier and warned that 2005 was shaping up to be another tough year, said it is on track to meet the June 30 deadline. "We have a vast majority of the planes completed," a spokesman said.

Cash-strapped Delta Air Lines, which has narrowly avoided bankruptcy in the last few months, is also working to meet the deadline.

Midwest Express has completed the replacement process, a spokesman said.

Other airlines that have to comply with the regulation include Continental Airlines, Northwest Airlines, Alaska Airlines and World Airways. Officials at the carriers did not return calls seeking comment.

Continental and Northwest, both of which in January posted quarterly losses, reversing year-ago profits, have been in labor negotiations to cut hundreds of millions in costs.

FedEx also has to meet the compliance, said Laura Brown, an FAA spokeswoman.