Southwest Airlines has agreed to pay a record $140m penalty to the US Department of Transportation (US DOT) due to its system meltdown in the past year.
The penalty is viewed as a strong deterrent and is the highest ever imposed by the US DOT. The disruption resulted in the cancellation of 16,900 flights and stranded around two million passengers during the Christmas holidays, lasting for over a week.
As part of the penalty, Southwest Airlines will pay a $35m cash fine and establish a $90m fund to assist future passengers affected by cancellations or significant delays. The incident has already cost the airline approximately $1 billion in additional expenses for passenger compensation, labour costs, and system upgrades.
