Shareholders sue Southwest Airlines over flight meltdown

Shareholders filed a lawsuit against Southwest Airlines Co (LUV.N) on Thursday, accusing the carrier of fraudulently concealing problems that led last month to an operational meltdown and more than 15,000 flight cancellations. According to the proposed class action filed in federal court in Houston, Southwest publicly downplayed or failed to disclose serious shortcomings in its flight scheduling software technology. The lawsuit said Southwest also did not discuss how its "point-to-point" route structure, which differs from the "hub-and-spoke" structure at other large U.S. airlines, could leave it vulnerable to unexpected bad weather. Shareholders led by Arthur Teroganesian said the inadequate disclosures made Southwest's statements about its operations in regulatory filings and in a media appearance by former CE Gary Kelly "materially false and misleading." Teroganesian said that as the truth came out, Southwest's share price fell about 10% between Dec. 23, 2022, and Jan. 3, 2023, wiping out more than $2b of shareholder value. Southwest did not immediately respond to requests for comment. Kelly, his successor Bob Jordan and CFO Tammy Romo are all named as defendants, in addition to the airline.<br/>