Shareholders are suing Southwest Airlines, claiming that it concealed issues about its technology that left it vulnerable during adverse weather conditions.
shareholders filed a lawsuit against the Texas-based carrier on Thursday, claiming that it downplayed and failed to disclose issues about outdated technology that left it vulnerable during adverse weather conditions.
The lawsuit is the latest sign that Southwest continues to reel from an operational meltdown that resulted in nearly 17,000 canceled flights over the chaotic holiday travel season and, is expected to cost the airline as much as $825 million. In court documents, filed in Houston, shareholders claim that "Southwest Airlines continuously downplayed or ignored the serious issues with the technology it used to schedule flights and crews, and how it stood to be affected worse than other airlines in the event of inclement weather." LOS ANGELES-CA-DECEMBER 29, 2022: Canceled Southwest Airlines flights appear on the monitors at LAX on Thursday, December 29, 2022.
Court documents say that Southwest discussed positive aspects of its "point-to-point" route structure, which differs from the "hub-and-spoke" route structure that most domestic airlines use, in its 2020 annual report.
As a result, shareholders say that statements made about its business in its financial reports "were materially false and misleading."
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