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Southwest Airlines CEO says the airline loses millions every week due to mechanical issues



Southwest Plans Withdrawn

CEO of Southwest Airlines said on Tuesday that the company is losing millions of dollars a week due to a recent maintenance crisis that has been driven by a labor struggle with its mechanics association . Last week, Southwest sued its mechanics and accused them of deliberately considering aircraft as unsafe to fly, thus directly owing them as the cause of flight cancellation.

"The damage to the company runs into millions of dollars each week in lost revenue due to canceled flights, and millions of dollars each week in the form of extra costs due to delays and cancellations," said Southwest CEO Gary Kelly at JP Morgan Conference in New York.

The airline declared an "operational emergency" after an increase in the aircraft that was taken out of service due to maintenance writes. This followed a CBS News survey in complaints from mechanics that they were under pressure to keep the planes in use.

Kelly told the analysts at the conference that the airline decided to sue its mechanics because customers were "injured" and employees would experience reduced profit sharing due to the association's "bad faith negotiation tactics."

"Our mechanics are great. They work very hard. They do an outstanding job and they deserve an updated contract," Kelly added.

Mechanical Association confirmed CBS News. It was served with the lawsuit and called Kelly's comments "alarming."

"Southwest's self-imposed" state of emergency "is a response to the increased FAA oversight and a way of distracting the public from Southwest's own deteriorating safety standards," the American Mechanics Brother Association said in a statement. "Any aircraft being put out of service, being made for legitimate reasons, and suggesting the opposite, further shows that Southwest Management just can't do it … At some point, Southwest must stop blaming everyone else and acknowledge that there is a problem. "

The maintenance crisis comes as Southwest has announced in April the launch of its much-anticipated service to Hawaii after FAA approval.

The airline has been under increased FAA oversight for about a year and has been locked in tense contract negotiations with its 2,500 mechanics for six years. Southwest Airlines has accused its mechanics association of "coordinating" to undermine the airline's business by writing incorrect security assessments.

Read CBS News & # 39; s thorough litigation update here .


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