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Southwest Airlines’ Holiday Collapse Due to Outdated IT Systems Case
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On December 31, 2022, The New York Times published an article entitled “The Shameful Open Secret Behind Southwest’s Failure,” which discussed how it was an “open secret” within Southwest Airlines (NASDAQ: LUV) that it desperately needed to modernize its scheduling systems.
- In particular, the article discussed how software shortcomings had “contributed to previous, smaller-scale meltdowns,” and that Southwest Airlines worker unions had warned the Company about the software at various times before the Company’s meltdown over the 2022 holiday season.
- The day before, on December 30, 2021, My Tech Decisions published an article about Southwest Airlines entitled “Southwest Airlines’ Holiday Collapse Due in Part to Outdated IT Systems,” which discussed how the SWAPA had warned that the Company needed to improve its technological infrastructure.
- On December 27, 2022, a CNN article revealed that it also obtained a transcript of a phone call between Southwest Airlines’ COO, Andrew Watterson, and various company employees, in which Watterson stated: “the process of matching up crew members with the aircraft could not be handled by our technology.”
- On December 26, 2022, Business Insider published an article about Southwest Airlines entitled “U.S. Department of Transportation says it plans to look into Southwest Airlines following the airline’s unacceptable holiday flight cancellations.” The article highlighted that the Department of Transportation had announced that it would examine “whether cancellations were controllable,” and whether Southwest Airlines was complying with its stated customer service plan, after reports of a lack of prompt customer service in the wake of cancellations.”
If all appeared allegations are true, Investors have reasons to suspect that the Company and its Leaders failed to perform dully their core duties, which led to significant shareholdings' value depreciation.
Breach of Fiduciary duty,
Shock Event Date
31 December 2022
12 January 2023
Lead Plaintiff Deadline
13 March 2023
Hon. Lynn N. Hughes
21 September 2023
- A federal judge in Texas dismissed an investor lawsuit without prejudice, claiming that Southwest Airlines had been dishonest for years in covering up a history of safety issues that ultimately led to a fatal engine explosion in 2018.
- The judge stated that the alleged misleading statements by the $LUV executives were more like exaggerated claims and not actionable fraud.