Southwest Airlines: Sourcing Safety and FAA Compliance

Southwest Airlines is our carrier of choice here at Spend Matters. Their blog, Nuts About Southwest, sums up their marketing and customer service spirit perfectly: "Southwest Employees try to Live the Southwest Way by displaying the Warrior Spirit, acting with a Servant's Heart, and embracing a Fun-LUVing Attitude." So we have naturally become concerned -- and more than a bit curious -- that this "spirit" seems to be lacking when it comes to Southwest's procurement of replacement parts.

A WSJ report yesterday, Southwest Presents Dilemma for FAA, claims that the Federal Aviation Administration has discovered "a significant maintenance lapse at Southwest Airlines Co. -- unauthorized parts used for up to three years on 82 planes ... [and that ] FAA managers and company officials are trying to work out a compromise by a Tuesday deadline ... leav[ing] some 52 jets -- roughly 10% of Southwest's fleet -- technically in violation of FAA regulations because the parts lack required paperwork showing they were designed, made and tested for aviation uses." The parts in question are "pieces of a system designed to protect movable panels on the rear of the wings [read: flaps] from hot engine exhaust." While "both Southwest and [the] FAA agree that the parts, some of which have been on the planes for up to three years without causing apparent problems, don't pose an imminent hazard. Boeing Co. [has] also said it doesn't believe the parts pose a safety threat."

What's most interesting about this story is that it's the result of Southwest not having adequate supplier visability and sufficient overview of their supplier's use of sub-contractors. An outside lawyer for Southwest, Dane Jacques, claims "Southwest used an FAA-approved contractor, Phoenix-based D-Velco Aviation Services, which in turn subcontracted work on the affected systems to another company. The subcontractor wasn't authorized by the FAA to provide those particular parts, Mr. Jaques said. The parts had slightly different dimensions than Boeing-approved brackets, and the aluminum alloy differed slightly from Boeing specifications." Southwest procurement's "Warrior Spirit" clearly needs a refresher course when it comes to supplier risk and ensuring that their paid soldiers are watching their back.

William Busch

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