Oct 23 (Reuters) - The U.S. Transportation Department on

Wednesday said it was fining American Airlines ( 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 ( AAL ) 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.