U.S. aviation regulators said Friday they are proposing airlines replace or modify cabin insulation on up to 1,600 Boeing Co. (BA) aircraft worldwide due to concerns about a fire risk.

The Federal Aviation Administration (search) proposed an airworthiness directive that would cover about 800 U.S.-registered planes. Foreign aviation authorities usually adopt FAA directives.

The FAA proposal would cover Boeing 727s and older model 737s as well as 757s, and 767s, at an estimated total cost of between $200 million to $330 million over six years.

All affected aircraft were made between 1981 and 1988.

Boeing says the fire-retardant coating on the fiberglass insulation blankets degrades with age but FAA officials said tests do not indicate age is a factor.

Flame Seal Products Inc. (search) of Houston said in a statement earlier this month that it was working with Boeing to test a new fire-proof sealant that would be sprayed on the insulation, a cheaper alternative to replacement.

Insulation blankets are placed between the exterior cabin wall and the interior of the fuselage skin to dampen noise and improve climate control.

The latest directive is not directly related to an FAA order in 2000 that required the replacement of metalized Mylar insulation on more than 600 U.S. planes made by McDonnell Douglas (search), which was bought by Boeing in 1997.

That order grew out of a Swissair crash off Nova Scotia in 1998. Investigators believe the insulation helped spread an electrical fire that brought down the MD-11 plane with a loss of 229 lives.