Government shutdown costs Southwest Airlines $60 million

Southwest Airlines thinks the mechanics’ union might be the problem with its planes.

Since Tuesday, the airline has been forced to cancel more than 600 flights and many of those cancellations are because of mechanical issues with its aircraft.

The airline said it began to encounter a heavy volume of mechanical issues on February 12 following a negotiation with the Aircraft Mechanics Fraternal Association, which represents our nearly 2,400 mechanics according to Southwest.

The mechanics say they’re doing their job, and chided Southwest for linking the safety issues to a collective bargaining negotiation.

The two sides have been negotiating a new contract for six years. They reached a tentative labor deal last year, but rank and file union members rejected it in a September ratification vote. Southwest said it has enhanced its offer since that vote.

But on Tuesday, Mike Van de Ven, the airline’s chief operating officer, accused the mechanics union of a “history of work disruptions” and said that the airline already has two pending lawsuits against the union. It is considering whether to file another.

The company issued an “all-hands” emergency declaration last week and canceled vacation for its mechanics.

“We are committed to operating a safe fleet, and every report is investigated, which is why we issued a notice to require an ‘all hands’ response to get out-of-service aircraft back into the fleet serving our customers,” he said.

Southwest has a fleet of 750 aircraft and has said there is no common theme with the mechanical issues.

The union responded that “scapegoating” its mechanics “does not bode well for the airline’s safe operations.” It said the problems with the out of service aircraft rests with management, not the union.

The union said the the increase in planes being taken out of service wasn’t a result of the labor talks but instead followed a report on CBS News about mechanics at both American and Southwest Airlines being put under pressure to overlook mechanical problems. The union said the report resulted in increased oversight of Southwest’s maintenance practices by the Federal Aviation Administration.

In the report both airlines denied there was any pressure put on mechanics. But that report prompted a February 12 letter from two Democratic senators, Ed Markey and Richard Blumenthal, asking for the FAA to respond to the allegations of the CBS report.

“Southwest Airlines’ mechanics are working the overtime demanded of them. But Southwest Airlines has the fewest mechanics to aircraft [ratio] of any major carrier,” said the statement from the union. “We will continue to do our job as expert craftsmen, for the safety of Southwest’s passengers.”

Helane Becker, airline analyst for Cowen, said her understanding is that Southwest has been hit by a flood of mechanics calling off sick. Those who call in sick are now required to bring a doctor’s note to verify that they are truly sick, she said. The airline did not confirm that policy.

“That [mechanics] contract has been open for a number of years now,” said Becker. “They need to sort it out, and get this behind them.”

The union denied there is in any increase in the number of mechanics calling off sick.

“The truth is, this is not an ’emergency,’ but the new normal,” said the union.

The maintenance problems aren’t the only thing dogging Southwest right now. Earlier Wednesday the airline disclosed that it lost $60 million in revenue because of the government shutdown.

That’s far more than its original estimate of $10 to $15 million in losses, and more than the $25 million drop in revenue estimated by Delta Air Lines a month ago.

In addition, the Federal Aviation Administration is investigating the airline for the way it tracks the weight of checked bags on its flights.

The problems, described as “systemic and significant,” caused pilots to miscalculate the weight of the plane at takeoff by as much as 1,000 pounds. That probe was first reported by the Wall Street Journal.

The airline told CNN that it is involved in an “ongoing effort to track and voluntarily report operational data to the FAA so that we can mitigate and eliminate any operational risks.” But it said it has already put in place controls and procedures to address weight and balance issues.

But the cascade of issues for Southwest has investors nervous. Shares of Southwest tumbled by 5% in afternoon trading Wednesday.