Southwest shareholders sue airline following mass cancellations

Shareholders of Southwest Airlines Co. filed a class action lawsuit against the company Thursday, alleging that the airline provided “materially false and misleading” information over a two year period regarding issues that caused a “meltdown” of the company last month.

Southwest cancelled thousands if its flights during the December holiday weekend. This was largely due to the severe winter weather. Southwest was however the only airline that had to cancel most of its flights. pointing to systemic scheduling problems that have plagued the airline for many years.

The lawsuit was filed by the Rosen Law Firm The Southern District of Texas shareholders claim that Southwest failed to disclose or downplayed the scheduling issues in its quarterly reports, and in media interviews by top executives. Among other statements, the lawsuit points to former Southwest CEO Gary Kelly claiming that previous scheduling issues were a result of “human error,” not “a lack of technological capability.”

The complaint states that following reports that the company’s technology could not handle its flight scheduling, Southwest Airlines stock dropped by over 12 percent between Dec. 23 and Dec. 28.

The class action suit is seeking damages for investors who purchased or otherwise acquired Southwest shares between June 13, 2020, when the Baltimore Sun published an article about problems with the company’s scheduling technology, and Dec. 31, 2022.

Southwest faces another class-action lawsuit, filed earlier this month. It claims that Southwest did not refund passengers for cancellations of more than 15,000 flights it made in December. Reuters.

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