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Special Event

Alaska Airlines CEO Defends Company's Maintenance Practices

Aired June 2, 2000 - 3:36 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JEANNE MESERVE, CNN ANCHOR: I'm Jeanne Meserve in Washington. We're going to take you out to Seattle, where Alaska Airlines executives, specifically the chief executive officer, John Kelly, is holding a press conference, responding to an FAA presser (ph) earlier today in which they said that the Alaska Airlines maintenance practices fail to meet federal standards.

Let's listen.

JOHN KELLY, CHAIRMAN & CEO, ALASKA AIRLINES: I'm pleased to say that many if not all the finings the FAA outlined this morning were addressed by us over recent weeks, as soon as they were raised by the FAA during its audit. In fact, I'm passing out correspondence outlining in greater detail what we've already done in that regard.

We have viewed this as an opportunity not only to continue to improve our operations but also to continue to prove to the FAA, to the traveling public and ourselves that the changes we've already outlined and instituted are working and are making this a better airline.

This announcement today serves as formal notice to us to institutionalize those changes during the next 30 days. We're confident that we'll be able to prove that we've already done that. As we move forward, we'll continue to work with the FAA to review our plans for the future to ensure that they have full confidence in our ability to continue to perform heavy maintenance as we grow.

With that, as Lou said, I'll be happy to address questions for a few minutes.

QUESTION: Sir, are you confident that the airline can meet the compliance regulations and (OFF-MIKE)

KELLY: Absolutely, absolutely. And not only am I confident, we have them doing just that. As I said, this is a process that goes clear back to April. As issues were raised, we addressed them specifically. And I really want you to take a look at the handout that we'll be providing you, because you'll see everything that was raised. We came back with very specific items that addressed that, that implemented that, that would not only assure us of execution but on being able to prove in an audit kind of fashion that those have been implemented. We've been doing that over the last weeks and the FAA has been there with us all along the way. I asked today whether they had any concerns about what we had done, what we've implemented or their oversight, and I think we're in agreement that we are meeting all the obligations we said we were. In fact, we're ahead of the game wherever possible. And as we go through these next 30 days where they have the continued oversight and surveillance, I fully expect that we'll be able to show them we can execute on a long-term basis what we implemented.

QUESTION: Mr. Kelly, the FAA today specifically cited management lapses in Alaska Airlines that led to a systematic breakdown in the record-keeping. In light of that, have you considered (OFF-MIKE) resignation of (OFF-MIKE) management team?

KELLY: I'm not going to get into that kind of a question. Obviously this audit process that we've gone through is one that we welcome. We brought in, as you know, outside auditors on our own without being asked to, and whether it's dealing with any of those auditors, the FAA, with my board, we've tried to be as open, honest and up-front as possible. And I think we've demonstrated time and time again that, in fact, not only have we been a quality carrier, we will continue to be a quality carrier. Where there is a need to make continuous improvement, we will obviously do that.

I said that safety is critical success factor No. 1 for Alaska Airlines, but I'll tell you, we have five other critical success factors. And one of those is continuous improvement. And so I think, you know, from my standpoint or my management standpoint, what we're going to do is view this as an opportunity to just get better and better. And that's how I view it.

QUESTION: Sir, the FAA had expressed concern about...

KELLY: Yes, ma'am.

QUESTION: How would you gauge the current situation with Alaska Airlines right now regarding how you guys feel about (OFF-MIKE)

KELLY: As I said, you know, I have no qualms whatsoever. The FAA has been there with us this whole time frame. They have to get to some point where they can move on. They've been dedicating their resources to oversight. That's their responsibility to the traveling public. We understand that. We've cooperated with them in that regard, and, you know, we've been able to demonstrate that. If we hadn't, they would have taken a different action than they've taken.

Now what they want to do is they want to have a very specific time frame where three can see that not only have we implemented these changes related to the findings, but that they're institutionalized, and I don't blame them. We're happy to...

I think that you can say any record keeping that was not done to perfection could be characterized in any of a number different kind of adjectives. It's not what you want to have. Obviously, we -- every other carrier that exists out there, every other entity that deals with any kind of rules and regulations, it's hard to be a hundred percent in every little detail you have, whether you want to classify it that way or some other adjective, you'd like to be at a hundred percent. We've always said we're not perfect, but we're never going to step trying, and I think that's what you try and do, whether it's paperwork, or whether it's procedures or anything else.

I guess out of this all, the most encouraging thing from my standpoint is that whether it's our internal auditors, or the FAA or anyone else, they keep coming back to the fact that we have absolutely wonderful people, and as I think I mentioned at our shareholders meeting, our auditors say, you have you have a world-class airline. I think we've demonstrated that over the years. We've tried to make investments in our airline way above and beyond what is required, in terms of guidance systems, and GPS and sophisticated navigation aids and those sorts of things. What this is getting at, in particular, is a situation of how you have the policies, procedures, the paperwork side of the operation and tie that together, and it's obvious that there was some need for improvement. We're going to do that.

Yes, ma'am?

We are all a kind of -- the buck stops here, ma'am. There's no question about. I've said that to the board. I've been very -- as open and honest as I can be inside and outside. The buck stops with all of us, whether it's me, or with my present chief operating officer or the heads of maintenance or all the people involved. We will all have that responsibility.

MESERVE: You've been listening to John Kelly, the chief executive officer of Alaska Airlines. He was responding to an FAA finding earlier today that gave Alaska Airlines seven days to clean up its maintenance practices, or it said it would recommend that the airline authority conduct heavy maintenance, be suspended. Mr. Kelly says the changes have already been made. They have been implemented. We are confident he said that we can prove that we have improved our maintenance practices. "We will continue to be," he said, "a quality airline." The FAA's recommendation stemmed from the investigation of the crash of Alaska Airlines flight 261, which went down on January 31. Eighty-eight people died in that crash.

TALKBACK LIVE after this break.

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