Two major unions at Southwest Airlines are demanding that the carrier replace CEO Gary Kelly because of the technology outage that caused the airline to cancel or delay thousands of flights in July.
The unions representing pilots and mechanics said Monday that Southwest is spending too much on buying back shares and not enough on updating its technology.
The pilots’ union said that its board voted 20-0 to ask that Kelly and Chief Operating Officer Mike Van de Ven be removed. The leader of the mechanics’ union said the outage was “the final straw” on top of unsettled contract negotiations and other disappointments.
Southwest Airlines Co. had not responded nearly two hours after receiving phone and email messages seeking comment.
Southwest officials blamed a faulty router for a July 20 outage that briefly grounded all flights. Southwest struggled for several more days with unusually high cancelations and delays.
The outage briefly caused Southwest to delay all departures and hold planes at their gates. Passengers couldn’t check in for flights electronically. Customers couldn’t book new flights either — Kelly said that cost Southwest between $5 million and $10 million.
The outage lasted about 12 hours, but Southwest said that it canceled 2,300 flights — 12 percent of its schedule — over five days as it struggled to recover. Southwest did not say how many flights were delayed during that period, but tracking service FlightStats put the number at more than 8,000.
In a letter Monday, Jon Weaks, president of the Southwest Airlines Pilots Association, said change is needed to make the company “more stable, sustainable and profitable.”
Weaks accused Kelly of leading a “misguided focus on cost control” and insufficient investment in critical technology that might have prevented the outage. He said the company had instead spent too much money buying back its own shares, a move aimed to please Wall Street by making remaining shares more valuable.
Louie Key, national director of the Aircraft Mechanics Fraternal Association, said management has dragged out contract negotiations and made stopgap fixes to operating systems rather than investing in upgrades. “A ‘profit over people’ structure has overtaken the company,” he said.
Shares of Southwest, the nation’s fourth-biggest airline, fell 11 cents to $36.90 in afternoon trading. Its shares have risen almost 2 percent since a year ago.
Filed Under: Aerospace + defense