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Southwest hid signs of outdated technology that led to December failures, class action suit says

Southwest Reputation Repair
Matt York
/
AP
A Southwest Airlines jet arrives at Sky Harbor International Airport, Dec. 28, 2022, in Phoenix. Shareholders sued the company over its failures over the holiday travel season.

Southwest investors are seeking damages for what they say is the carrier's negligence.

Southwest Airlines intentionally concealed problems with its computer systems that led to thousands of flight cancellations over the holiday travel season, shareholders alleged in a lawsuit filed Tuesday.

The class action suit argues Southwest has failed multiple times since 2020 to mention financial and operational risks linked to its outdated technology.

In one of Southwest’s reports to shareholders in 2020, the company cited the pandemic, weather issues and other outside circumstances as reasons why the company’s financial success might fluctuate.

But that report and future reports did not fully detail any of Southwest’s computer scheduling issues, the suit said.

Those alleged shortcomings all came to a head when more than 10,000 flights were canceled around the holiday season. The suit points to the crew scheduling system Sky Solver as a root cause of the widespread delays.

Southwest representatives declined to comment, but Southwest CEO Bob Jordan said in an interview with The Dallas Morning News challenged those claims.

"There’s been a little misconception that we have unique or archaic tools or something like that and we don’t,” Jordan said Thursday. “Now we’re going to learn things that we need to do to make the technology better to make the processes better.”

The suit also criticized the airline’s use of the point-to-point system as opposed to a hub-and-spoke system used by airlines like Delta Airlines. Experts say in severe weather conditions like last month’s winter storm, not having a central hub for flight crews to return to can result in compounding disruptions.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

Southwest's stock fell from a closing price of $36.09 on Dec. 23 to $32.19 on Dec. 28 — a drop of more than 12%. The investors are seeking damages for what they argue is negligence by the company.

Southwest has received national criticism for its handling of the December meltdown from customers and government agencies.

In a Dec. 29 letter to Southwest CEO Bob Jordan, Secretary of Transportation Pete Buttigieg demanded the company be held accountable for the holiday disruptions and the inconvenience caused to customers.

Buttigieg asked the airline to reimburse passengers for meals, hotels and transportation, asking for a “prompt update on Southwest’s efforts to do right by the customers it has wronged.”

The airline said in a release Jan. 3 it would be working on these reimbursements as well as returning baggage and processing refunds.

Got a tip? Email Toluwani Osibamowo at tosibamowo@kera.org.

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Toluwani Osibamowo is a general assignments reporter for KERA. She previously worked as a news intern for Texas Tech Public Media and copy editor for Texas Tech University’s student newspaper, The Daily Toreador, before graduating with a bachelor’s degree in journalism. She is originally from Plano.