Southwest Airlines Co.
|Company Name||Southwest Airlines Co.|
|Class Period||June 13, 2020 to December 31, 2022|
|Lead Plaintiff Motion Deadline||March 13, 2023|
On December 22, 2022, Southwest Airlines began to cancel flights in the aftermath of a winter storm. In the following days, the airline cancelled 15,004 flights – more than half of its typical flight schedule – and by December 28, about 87% of all cancelled flights in the US were from Southwest Airlines alone. The Transport Workers Union president stated that she and other labor leaders had repeatedly told management that Southwest Airlines’ scheduling technology is not good enough, with a “complicated” model for assigning flights and an “antiquated internal system” used for managing and staffing trips.
On this news, Southwest Airlines’ stock price fell $2.15, or 10.8%, over two consecutive trading days to close at $32.19 per share on December 28, 2022, thereby injuring investors.
Then, on December 31, 2022, The New York Times, published an article discussing the “open secret” within Southwest Airlines that it needed to modernize is scheduling systems, and that software shortcomings had “contributed to previous, smaller-scale meltdowns.”
On this news, Southwest Airlines’ stock price fell $1.70, or 3.2%, to close at $32.60 per share on January 3, 2023, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) 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; and (2) it did not discuss how it’s unique point-to point service and aggressive flight schedule could leave it prone in the event of inclement weather; and (3) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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