Shareholders sue SouthwestAir over holiday meltdown
Noting that the holiday meltdown prompted the Texas-based airline's stocks to plummet over 12%, the lawsuit accused Southwest of withholding critical information about the deteriorating state of its infrastructure.
Winter weather caused significant cancellations for multiple airlines ahead of Christmas, but the problems were more prominent for Southwest, which accounted for nearly 90% of cancellations three days after Christmas. Plaintiffs referenced prior statements from Southwest executives characterizing prior scheduling mishaps as “human error" instead of technological blunders and contended that the company was therefore peddling"materially false and misleading" information to shareholders. They are in pursuit of damages from June 13, 2020, when a Baltimore Sun report discussed the tech problems, and Dec. 31, 2022.
Multiple former employees attributed the troubles to a failure to invest in its internal infrastructure in the long term. The company has tapped consultancy firm Oliver Wyman to examine the chaos that unfolded during the holidays. It has pledged to permit affected customers to attain flight credits or full refunds for significant delays and cancellations between Dec. 24 and Jan. 2.
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