By David Shepardson
(Reuters) - The U.S. Transportation Department on Wednesday said it was fining American Airlines (NASDAQ:AAL) a record $50 million for its treatment of disabled passengers, including failing to provide some with adequate assistance and mishandling wheelchairs.
The fine is 25 times larger than the previous highest airline penalty for disability protection violations, setting a "new precedent" for future enforcement, the department said.
"The era of tolerating poor treatment of airline passengers with disabilities is over," said Transportation Secretary Pete Buttigieg. "By setting penalties at levels beyond a mere cost of doing business for airlines, we’re aiming to change how the industry behaves."
Under the terms of a settlement, American will pay $25 million over three years and was credited with $25 million for investments to address the issues and goodwill compensation to impacted passengers.
"Today's agreement reaffirms American's commitment to taking care of all of our customers," American Airlines senior vice president Julie Rath said.
The Transportation Department said it uncovered cases of "unsafe physical assistance that at times resulted in injuries and undignified treatment of wheelchair users, in addition to repeated failures to provide prompt wheelchair assistance."
American had also mishandled thousands of wheelchairs by damaging them or delaying their return, making it among the worst performers on that front among U.S. carriers, the department said.
The department has active investigations into similar violations at other U.S. airlines but declined to identify them.
American, which did not admit liability in reaching the settlement, said this year it is spending more than $175 million "on services, infrastructure, training, and new technology to support passengers who use mobility devices when traveling."
The airline added it has improved its wheelchair and scooter handling rate more than 20% since 2022 and noted it received 7.9 million advance requests for wheelchair assistance last year.