(AOF) – Southwest Airlines is the target of a lawsuit filed by shareholders on Thursday, weeks after the company’s collapse over the holiday season left thousands of passengers across the country grounded. Filed in federal court in Houston, the lawsuit claims airline executives made “false and misleading statements” to hide Southwest’s vulnerability to the problems that caused the year-end fiasco.
For the plaintiffs, the leaders “failed to take into account the serious risk of having obsolete technology”. At issue are Southwest’s unique point-to-point link structure, which allows for more nonstop routes than competing carriers, and its aggressive flight schedule, which have exposed the company to an increased risk of disruption.
Southwest canceled thousands of flights starting Dec. 22, 2022 due to a storm that disrupted travel across the country. But while other airlines resumed normal operations when weather conditions improved, Southwest continued to cancel up to 60% of its flights for 8 days, in one of the busiest weeks in the world. year, because its programming system broke down.
The shareholders are seeking damages, the amount of which is not specified.
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The end of a duopoly?
For several decades, the American Boeing and the European Airbus have shared 99% of the world market for airliners with more than 110 seats. This market weighs more than 100 billion dollars per year. However, this duopoly seems to be weakened in 2022 for several reasons. First, for the first time, two medium-haul single-aisle aircraft, the Chinese Comac’s C919 and the Russian Irkut’s MC-21, are about to enter service. Added to this is the Boeing 737 MAX crisis. With the cessation of deliveries of this aircraft between 2019 and 2021, the production balance has been broken. In 2021 Boeing posted 340 deliveries, with Airbus remaining well ahead with 611.