Lost money on investments in Southwest Airlines? If so, visit Southwest Airlines Co. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
New York, N.Y.–(Newsfile Corp. – Jan. 26, 2023) – Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a plaintiff’s motion principal in a securities class action that has been brought on behalf of investors who purchased or acquired securities of Southwest Airlines Co. (“Southwest” or the “Company”) (NYSE: LUV) between June 13, 2020 and December 31, 2022, inclusive (the “Class Period”). The suit was filed in the United States District Court for the Southern District of Texas and alleges violations of the Securities Exchange Act of 1934.
Winter storms disrupted vacation travel during the 2022 holiday season, leaving thousands of travelers stranded at airports across the United States. However, not all national airlines were affected equally. Southwest Airlines flight cancellations accounted for the vast majority of domestic flight cancellations, leaving travelers unable to visit loved ones for the holidays, drawing the ire of the federal government.
As flights were being canceled across the country, it soon became known that the root cause of Southwest Airlines’ cancellations was outdated and ineffective technology; in particular, its crew scheduling system (called “Sky Solver”). To further complicate this problem, Southwest Airlines used an aggressive flight schedule that made it prone to higher cancellations than its competitors in the event of unusual conditions, such as storms across the country.
Plaintiff alleges that Defendants made materially false and misleading statements during the Class Period. Specifically, Plaintiff alleges that Defendants failed to disclose that: (1) Southwest Airlines continually downplayed or ignored serious problems with the technology it used to schedule flights and crews, and how it would be more affected than other airlines in the event of inclement weather. weather; and (2) did not discuss how its unique point-to-point service and aggressive flight schedule could leave it prone to bad weather.
As various national media outlets focused on how Southwest Airlines’ complete failure to provide adequate service to its customers left thousands stranded at airports across the country, the truth about the Company’s business began to emerge.
On December 26, 2022, Business Insider published an article about Southwest Airlines titled “US Department of Transportation Says It Plans to Investigate Southwest Airlines Following Airline’s Unacceptable Flight Cancellations.” The article noted that the Department of Transportation had announced that it would examine “whether the cancellations were controllable” and whether Southwest Airlines was adhering to its established customer service plan, following reports of a lack of prompt customer service in the wake of the cancellations.
Then, on December 27, 2022, Reuters published an article titled “Southwest Cancels Thousands More Flights; US Government Promises Scrutiny.” This article quoted Casey Murray, president of the Southwest Airlines Pilots Association (“SWAPA”), who said that “Southwest is using outdated technology and processes, really from the ’90s, that can’t keep up with the complexity of the current network”.
He Reuters The article also discussed the flight schedule for Southwest Airlines. Rather than fly out of hubs, Southwest Airlines relies on the aforementioned point-to-point service, which leaves Company personnel vulnerable to being stranded during disruptions (such as inclement weather). Executing this complex and aggressive business model was only possible with software that was more powerful than Sky Solver, Southwest Airlines’ proprietary software used to match flight crews to different flights.
With this news, Southwest Airlines shares fell from a closing price of $36.09 on December 23, 2022 to $33.94 the next trading day, December 27, 2022, and then to $32.19 on December 28. December 2022, a drop of more than 12%.
More news about Southwest Airlines emerged in the days that followed. On December 30, 2021, My technology decisions published an article on Southwest Airlines titled “Southwest Airlines Holiday Collapse Due in Part to Outdated IT Systems”, which discussed how SWAPA had warned that the Company needed to improve its technology infrastructure.
On December 31, 2022, The New York Times published an article titled: “The Shameful Open Secret Behind Southwest’s Failure”, which discussed how it was an “open secret” within Southwest Airlines that desperately needed to modernize its scheduling systems. In particular, the article discussed how deficiencies in the software had “contributed to earlier, smaller-scale crises” and that Southwest Airlines workers’ unions had warned the Company about the software at various times prior to the Company’s crisis during the Christmas season of 2022.
With this news, Southwest Airlines’ stock price fell $1.07 per share to close at $33.67 per share on January 3, 2023.
If you want to serve as lead plaintiff, you must transfer to the Court no later than February 13, 2023. A lead plaintiff is a representative party who acts on behalf of other class members to direct the litigation. Your ability to participate in any recovery does not require you to act as lead plaintiff. If you choose not to take any action, you may remain a member of the absent class.
If you purchased or acquired Southwest Airlines securities and/or would like to discuss your legal rights and options visit Southwest Airlines Co. Shareholder Class Action Lawsuit or contact Peter Alloco at (212) 951-2030 or [email protected]
Since 1993, Bernstein Liebhard LLP has recovered more than $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the country’s largest public and private pension funds to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the firm has been named to The National Law Journal’s “Plaintiffs Hot List” thirteen times and is listed on The Legal 500 for ten consecutive years.
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