By Alwyn Scott NEW YORK (Reuters) - Honeywell on Tuesday said it wanted U.S. air safety regulators to explain a new proposal to compel airlines to change cockpit instrument panels the company makes for Boeing planes over concerns that Wi-Fi signals could wipe out crucial readings and create a risk of crashing. Honeywell noted that the Federal Aviation Administration was content to make replacement of the cockpit displays optional. But on Tuesday, the FAA proposed compelling airlines to make about $10,000 in changes to each display panel. The agency cited concerns that Wi-Fi signals from passenger mobile devices could wipe out speed and altitude readings for up to six minutes. Honeywell Aerospace Chief Executive Tim Mahoney, in an interview at Reuters offices in New York, said the problems, which include cockpit display screens flickering or blanking completely, occurred only once in a test last year, and that Honeywell and Boeing Co had already advised airlines to replace the displays. "The one case that was experienced on the ground was addressed and we worked with Boeing and that was concluded in 2012," Mahoney said. "Honeywell needs to better understand what if anything has changed that would have changed that disposition" from advising airlines to change the displays to requiring it. If enacted, the proposed FAA rule would affect displays on 139 Boeing 737 and 18 777 planes in the U.S., the FAA said, pegging the cost refitting all the U.S. planes at $1.6 million. More aircraft would be affected if foreign regulators adopted the rule. The 737 is Boeing's best-selling jet and about 5,500 are in service around the world. The FAA said it proposed the rule in part because the safety issue "is likely to exist or develop in other products of the same type of design." A spokesman for the agency said officials were checking about further justification for the rule. Mahoney said it was not known how many airlines had already switched to an updated display that guards against the Wi-Fi problem. Boeing said it put updated displays on 737s and 777s starting in September of 2012 and that the proposed rule simply "mirrors" the advice Boeing gave to airlines last November. Honeywell already is subject to an FAA action involving a radio beacon it sells that is suspected of causing a fire on a Boeing 787 Dreamliner earlier this year. The FAA on September 18 required inspections of the beacons on some 3,800 aircraft because of the fire risk. The beacons help rescuers locate wreckage if a plane crashes. BROADBAND IN THE SKY The proposed FAA action comes as airlines are beefing up onboard Wi-Fi systems to provide passengers more bandwidth and better coverage on long-haul trips over water. Delta Air Lines, United Airlines American Airlines, US Airways and other carriers already offer Wi-Fi service to passengers on at least some aircraft, typically through providers such as Gogo Inc. JetBlue Airways recently got the regulatory green light to put a high-speed satellite-linked broadband service on its jets. This month, an FAA advisory committee is due to recommend the possible loosening of restrictions on use of personal electronic devices on board aircraft. Right now, devices must be powered down during takeoff and landing. The advisory group includes representatives from airlines, government, pilots, consumer electronics firms and plane makers, including Boeing and Airbus. Amazon.com, which makes the Kindle e-reader, is the only device maker on the 28-member committee, according to its charter. Device makers Apple, Google and Samsung are not on the committee. The proposed FAA rule would affect the "phase 3" version of the Honeywell Aerospace cockpit display and related software. Planes typically have several of the displays, which show flight data such as speed, altitude, aircraft pitch and roll, and heading. In testing, the FAA said, the phase 3 displays blanked out for up to six minutes, showing they were susceptible to radio signals from Wi-Fi even when the power of the Wi-Fi signals were below levels that the displays were designed to withstand. If a screen went blank on takeoff or landing it could cause "loss of control of the airplane at an altitude insufficient for recovery," the FAA said. The FAA will accept public comment on the rule until November 8. Under an FAA rule issued this month, Honeywell's emergency locator transmitters (ELTs) are being inspected by airlines around the world for faults that could spark a fire. The FAA followed Transport Canada in requiring the inspections after an Ethiopian Airlines 787 Dreamliner parked at London Heathrow Airport caught fire in July. Mahoney said inspections had turned up other examples of problems with other ELTs, but those have not started fires. The investigation by the UK Air Accidents Investigation Branch of the Ethiopian Airline fire is likely to last another few months, Mahoney said. "The rigorous investigation is continuing" and includes the possible effect of the higher humidity on 787s compared with other jets, along with mechanical and electrical interference in the area of the 787 where the fire started, he said. (Reporting by Alwyn Scott; Editing by David Gregorio)