Southwest Faces Class Action Lawsuit Over Holiday Flight Meltdown. CEO Bob Jordan says "it can't happen again."

Outrage and scrutiny are mounting over Southwest's widespread flight cancellations over the holiday season, and now there's a class action lawsuit, inspired by the company's legendary collapse.

The suit, which was filed Thursday, is aimed at individual shareholders, according to Insider, and names the Dallas-based company and several top executives as defendants. The lawsuit seeks damages that have not yet been specified.

He argues that the company misled and withheld information from investors about how Southwest's approach to planning, "obsolete technology" and point-to-point operations - that is, - say more direct flights, rather than funneling customers to places like Houston and Chicago - could be further disrupted in severe weather.

Related: Man Emotionally Finds Suitcase Amid Southwest Airlines Disaster

"As flights were canceled across the country, it quickly became apparent that the root cause of Southwest Airlines' cancellations was outdated and inefficient technology, particularly its crew scheduling system," the suit states.< /p>

Shareholder lawsuits are quite common. Tesla, for example, is currently facing an issue over CEO Elon Musk's salary package and his statements on Twitter in 2018.

Broadly speaking, these types of lawsuits can relate to a publicly traded company's legal obligations to individuals who own individual stock in the company, such as disclosing risks to the business, which affects a person's decision to invest or not.

Southwest's stock fell from about $38 per share to about $32 between Dec. 14 and Dec. 28 after theft issues emerged. As Reuters noted, from Dec. 23 to Jan. 3, the company lost more than $2 billion in shareholder value.

Shareholders can sue for a perceived inability to discuss risk or share information with shareholders. This class action may include anyone who held stock in Southwest during a certain period, from June 2020 to December 31, 2022.

The start date was chosen, according to the lawsuit, because of an article in the Baltimore Sun which suggested that a series of delayed flights in the Southwest were due to a breakdown of the computer system. It was released in June 2020.

The idea is that when information about the problem became public, it became a fiduciary issue that the company did not disclose, and then made "misleading" claims about planning issues during interviews , for example.

Southwest, unlike most airlines, uses a point-to-point system. It offers customers more direct flights, which has helped its growth, according to The Dallas Morning News.

But most major airlines operate on a hub-and-spoke system that routes most flights to major airports.

The difference is, as the outlet notes, crew members operating flights to the southwest are more likely than other airlines to be scattered all over the place, rather than stranded in a central hub , which complicates reprogramming. This may be fine in normal times, but increases problems during weather delays, he noted.

Southwest apparently also used older software. "It's been an open secret within Southwest for some time, and it's a shame, that the company desperately needed to modernize its scheduling systems," an editorial writer told The New York Times. end of December. .

So when the historic winter storm hit the central United States, it hit the southwest the hardest. On December 26, the carrier