Southwest faces labor, revenue problems
Airline says federal shutdown cost $60M in first quarter
DALLAS — Southwest Airlines is lashing out at the union representing its mechanics, suggesting that they may be grounding planes to gain leverage in stalled contract negotiations.
Separately, Southwest said Wednesday that the partial shutdown of the federal government will cost it $60 million in lost revenue during the first quarter — far more than the airline’s previous estimate of a $10 million to $15 million.
Southwest said it has continued to see softer bookings that it blames on the shutdown, which ended officially on Jan. 25. The earlier estimate covered the period through Jan. 23.
Delta Air Lines stood by a January estimate that it figures to lose $25 million in revenue from the shutdown. Other carriers have not provided estimates.
Southwest shares tumbled $3.26, or 5.7 percent, to close at $54.41. Shares of American, United and Delta dipped about 1 percent.
On the labor front, Southwest is fighting the Aircraft Mechanics Fraternal Association, which represents nearly 2,400 Southwest mechanics.
Chief Operating Officer Mike Van de Ven said Southwest saw an increase in aircraft being declared out of service on Feb. 12, “just days after our last negotiations session with AMFA.” The surge, concentrated at a few bases, occurred even though there were no changes in the maintenance programs, he said.
The airline issued an emergency order last Friday that requires mechanics to get a doctor’s note if they call in sick and gives Southwest the power to impose mandatory overtime.
Mechanics who don’t comply could be fired.
The memo went initially to mechanics in Phoenix, Las Vegas, Houston and Orlando, Florida, and this week to those in Dallas. Still, delays and cancellations have persisted.
Southwest canceled about 440 flights — 11 percent of its schedule — by midafternoon Wednesday, according to Flight-Aware. A spokeswoman said the majority were due to bad weather — a storm disrupted air travel in the East — but there were still “a high number” of aircraft sidelined for mechanical issues. Southwest canceled about 200 flights Tuesday, when weather was not a major factor.
The union said Southwest is “scapegoating” mechanics, and it warned that the conflict “does not bode well” for safety at one of the nation’s biggest airlines.
“For Southwest’s leadership to connect the airline’s self-declared ‘operational emergency’ to collective bargaining negotiations is simply an attempt to divert attention away from the airline’s safety issues,” the union said in an unsigned statement.