Southwest Airlines Sued by Shareholders After December's Debacle

Shareholders of Southwest Airlines have filed a class action lawsuit against the company, accusing it of fraudulently concealing problems that led to nearly 16,000 cancellations in late December.

The lawsuit was filed in federal court in Houston, Texas, according to Reuters. The suit alleges the airline downplayed the problems in its flight scheduling software and did not discuss how the "point-to-point" route structure it utilizes (different when compared with other airline's use of "hub-and-spoke" route structures) is not up to par when dealing with unexpected bad weather.

The lawsuit seeks damages on behalf of Southwest investors from a period spanning from June 13, 2020 to December 31, 2022. The date is June is when the Baltimore Sun first wrote about problems with the airline's computer systems.

The lawsuit is led by Arthur Teroganesian and is called Teroganesian v Southwest Airlines Co., U.S. District Court, Southern District of Texas, No. 23-00115. The shareholders call Southwest's statements about its computer systems "materially false and misleading."

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