The recent severe storms that hit almost every part of the United States over the holidays caused thousands of delays and cancellations of flights by the major airlines. Most carriers did well, eventually flying customers from one place to another and then reverting to regular schedules within a few days. Southwest Air had an avalanche of cancellations and delays that reached a remarkable level, and the problem remains mostly unsolved. The trouble is so severe that the federal government has begun investigations. CEO Bob Jordan says he is “accountable” for the problems. These may cripple the carrier for months as people avoid Southwest and the incident triggers many fines. He needs to step down immediately because he is the architect of the disaster.
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Jordan recently bragged to Wall Street that his airline’s performance has been extraordinary. This has been among the reasons Southwest has done so well on customer surveys that cover U.S. carriers. From when industry giant Herb Kelleher co-founded Southwest in 1967 until he stepped down in 2007, Southwest built a reputation for an extremely strong bond to fliers. That has been ruined in a matter of days.
The cancellation rate for Southwest was staggering. It canceled 2,500 flights on Wednesday, and the number could match that Thursday. To make matters worse, most of the problem was preventable. Much of the catastrophe was blamed on old software and infrastructure operations that almost all other carriers upgraded over the past few years.
The New York Times reported that Jordan would not be available for interviews. That may be true for some time. The paper points out that the catastrophe is so severe that it could take weeks to repair.
One responsibility of boards at public companies is to monitor the performance of chief executive officers. CEOs who undercut financial performance and the public’s confidence in their products and services should be candidates for dismissal. In Jordan’s case, there is no question he has already crossed those lines and needs to be thrown out.
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