Southwest Airiness agreed a huge $140 million penalty over its infamous system meltdown a year ago.
The US Department of Transportation civil penalty is the highest ever and is a ‘a strong deterrent’, the US DOT said.
The airline’s operational meltdown stranded two million passengers with 16,900 flights cancelled during last year’s Christmas holidays.
The disruption lasted more than a week.
Southwest will pay a $35 million cash fine and set aside a $90 million fund for ‘future Southwest passengers affected by cancellations or significant delays.’
The incident has already cost the airline about $1 billion in extra costs for passenger compensation, added labor costs and upgrades to its systems.
“This sends a message that every airline has to make the proper investments in having a good enough system and customer service,” Transport Secretary Pete Buttigieg said.
“If airlines fail their passengers, we will use the full extent of our authority to hold them accountable”.
“It was a historic storm that led to a historic week of operational disruption,” Southwest CEO Bob Jordan said.
The DOT said Southwest violated consumer protection laws by failing to provide adequate flight status notifications and prompt compensation.
