A year after one of the most egregious operational breakdowns ever witnessed in the aviation industry, the punishment for Southwest Airlines (LUV) -) was just handed down by the Department of Transportation.
Southwest will have to pay a $140 million settlement, including a $35 million fine, after the airline cancelled almost 17,000 flights during the busy holiday travel season last year, stranding more than 2 million passengers in the process.
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When asked if the airline industry has done enough in the subsequent months to ensure that a similar debacle never happens again, Department of Treasury Secretary Pete Buttigieg says that he doesn't anticipate any more big problems from the industry he oversees.
"There's a lot of credit to go around. Today's announcement is related to a big penalty enforcement action related to failures that took place a year ago," Buttigieg told CNBC Monday. "But I would also say over the course of the last year we have seen much better outcomes than we had a year, a year and-a-half ago."
Back in winter 2022, there were reports that the airline had been understaffed heading into the always busy holiday travel season. But Southwest at the time denied that this was the case, saying that the kerfuffle was instead caused by a "scheduling issue."
The airline said it was "fully staffed and prepared for the approaching holiday weekend." The severe weather, however, overwhelmed the airline's scheduling tools, according to Southwest.
"These operational conditions forced daily changes to our flight schedule at a volume and magnitude that still has the tools our teams use to recover the airline operating at capacity," the airline shared.
But Buttigieg says that the industry needed the incentive the DOT just issued in order to ensure that Americans don't experience those delays ever again.
"This year we saw some of the biggest travel days ever, and the cancellation rate was less than one half of one percent," Buttigieg boasted.
Check out his full interview below.
Today, @PeteButtigieg and the Department of Transportation issued the largest ever fine of its kind ($140 million) to Southwest Airlines for the 2022 holiday meltdown that left passengers stranded across the country. pic.twitter.com/cRK0xeAOAg
— chyea ok (@chyeaok) December 18, 2023
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