Southwest Airlines is accused of ignoring “serious risks” associated with its outdated technology infrastructure and support systems, considered critical to the performance, reliability, and security of airline operations, as stated in a new lawsuit.
The class action suit was filed in Texas courts Thursday, on behalf of all shareholders who have owned or purchased stock in the passenger airlines, since 2020.
The case comes just days after the FAA grounded all departing flights in the US because of a critical software failure.
The system outage caused the national pilot alert system, known as Notice to Air Missions System (NOTAMs), to shut down for hours on Wednesday delaying roughly 17 thousand flights worldwide.
The FAA announced that the failure was due to outdated technology, something the agency has been struggling to successfully modernize for the past decade.
The lawsuit states, “these technologies and systems include, among others, the Company’s website and reservation system, flight dispatch and tracking systems, flight simulators, check-in kiosks, maintenance record keeping management systems, telecommunications systems, flight planning and scheduling systems, crew scheduling systems, and financial planning, management, and accounting systems.“
It's the second suit filed against Southwest airlines this month since a system-wide breakdown stranded thousands of travelers across the country during the 2022 holiday travel season.
More than 60% of Southwest passenger flights were canceled between Christmas Eve and New Year's Day.
That class action suit was filed on January 6 in southern Louisiana on behalf of Southwest passengers denied refunds for their canceled flights.
The airline’s top three executives were also named in the suit.
The trio of CEOs is accused of purposely misleading shareholders by hiding the state of the airline’s defective internal controls in its quarterly documents filed with the US Securities and Exchange Commission, dating back to June 2020.
The suit claims the defendants were either “aware of or recklessly disregarded the fact that the false and misleading statements were being issued…in violation of the federal securities laws.”
Security concerns about the possible loss of critical data during system failures were also mentioned in the case file.
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