Three U.S. airlines on Wednesday warned of higher fuel costs in the third quarter due to a jump in crude prices, adding to pressures the industry faces from expensive labor contracts.
25.08.2023 - 14:20 / skift.com / Gary Kelly / Southwest Airlines / Bob Jordan / Airlines
Shareholders filed a lawsuit against Southwest Airlines Co 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 CEO Gary Kelly “materially false and misleading.”
Teroganesian said that as the truth came out, Southwest’s share price fell about 10 percent between Dec. 23, 2022, and Jan. 3, 2023, wiping out more than $2 billion of shareholder value.
Southwest did not immediately respond to requests for comment. Kelly, his successor Bob Jordan and chief financial officer Tammy Romo are all named as defendants, in addition to the airline.
Flight operations at Dallas-based Southwest buckled shortly before Christmas as a fierce winter storm swept across the United States.
The carrier largely restored normal operations by Dec. 30, several days after other airlines had recovered.
Thursday’s complaint seeks unspecified damages on behalf of Southwest investors from June 13, 2020, when the Baltimore Sun wrote about computer problems at the carrier, to Dec. 31, 2022.
Southwest has also been sued over its alleged failure to provide refunds to passengers affected by December’s weather. The carrier has pledged to process refunds and provide expense reimbursements.
In an interview on Thursday, Jordan said Southwest was looking at all operations to avoid a repeat of the meltdown. “It just can’t happen again,” he said.
The case is Teroganesian v Southwest Airlines Co, U.S. District Court, Southern District of Texas, No. 23-00115.
Three U.S. airlines on Wednesday warned of higher fuel costs in the third quarter due to a jump in crude prices, adding to pressures the industry faces from expensive labor contracts.
There are problems at two of the nation’s top five airlines. Labor problems.
More than 890 flights have been canceled and more than 1,200 are delayed as Hurricane Idalia made landfall on Florida’s northwest coast as a Category 3 hurricane early Wednesday morning.
Southwest Airlines recently made changes to its pre-flight boarding policies by limiting the options for passengers to purchase a better spot in line for an extra fee.
The Federal Aviation Administration (FAA) said on Saturday it is investigating a near collision between a Southwest Airlines Boeing 737 and a Cessna Citation business jet in San Diego, the latest in a series of troubling U.S. aviation incidents.
The deadly wildfires on the island of Maui are likely to affect visitor — and airline — demand to the island for the “foreseeable future,” analysts at T.D. Cowen said Friday.
Two months. That’s how long Southwest Airlines expects there to be an impact on bookings from its massive holiday meltdown that disrupted millions of travelers over Christmas and New Years.
Southwest Airlines has put an initial number to the losses incurred during its holiday meltdown: a $725-825 million hit to its pre-tax income in the fourth quarter. That number includes both $400-425 million in lost revenue and added costs, for example reimbursing people for alternative travel costs.
The U.S. Transportation Department (USDOT) said it planned to seek higher penalties for airlines and others that broke consumer protection rules, saying they were necessary to deter future violations.
Good morning from Skift. It’s Tuesday, January 3, and here’s what you need to know about the business of travel today.
Southwest Airlines was up and running on a normal schedule on Friday after a massive winter storm crippled operations this week and exposed problems at the low-cost carrier.
Southwest Airlines capped off its 2022 with the unenviable distinction of cancelling more than 15,000 flights in total during the week of Christmas, the result of a system failure caused by several issues that were exacerbated by a nationwide winter storm.