Southwest Airlines slapped with $140 million consumer protection penalty by DOT

The Transportation Department is imposing Southwest Airlines with the largest consumer protection penalty in the agency’s history, a response for the last year’s days-long meltdown that stranded thousands of travelers and aircrew nationwide.

DOT’s penalty of $140 million, which is 30 times larger than an any previous fine slapped on an airline for consumer protection violation, follows an investigation where the Texas-based airline ultimately cancelled 16,900 flights and stranded more than two million passengers. The probe concluded that the airline failed to provide adequate customer service assistance, flight status notifications, and refunds in a prompt and proper manner.

As a part of consent order, Southwest is ordered to pay $35 million to the U.S. Treasury, the agency said. It will also set up a $90 million compensation system for future vouchers that would be issued to Southwest customers who experience a “controllable” cancellation or delay. Passengers who reached their destination more than 3 hours late than their scheduled time will also be entitled to $75 transferrable voucher.

In exchange for establishing the compensation program, DOT will reduce its penalty against Southwest by $72 million.