NEW YORK, March 11, 2020 /CNW/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Southwest Airlines Company ("Southwest" or the "Company") (NYSE: LUV) and certain of its officers. The class action, filed in United States District Court, for the Northern District of Texas, Dallas Division and indexed under 20-cv-00408, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Southwest securities between February 7, 2017, and June 25, 2019, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Southwest securities during the class period, you have until April 20, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Southwest was founded in 1967 and is based in Dallas, Texas. The Company operates a passenger airline that provides scheduled air transportation services in the U.S. and near-international markets. Southwest is regulated by, among other government entities, the Federal Aviation Administration ("FAA"), the sub-agency of the U.S. Department of Transportation ("DOT") that regulates civil aviation in the U.S. and its surrounding international waters.
Southwest's operations have been plagued by non-compliance and maintenance issues with its flight services for over a decade, often exacerbated by the Company's repeated denials of wrongdoing and self-touted remediation efforts. For example, according to the Wall Street Journal, the FAA's certificate-management office overseeing Southwest faced significant controversy over a decade ago "when congressional investigators discovered that local agency managers had allowed the airline to continue flying tens of thousands of passengers on nearly two dozen aircraft without completing mandatory structural inspections." Additionally, "[i]n 2009, Southwest agreed to pay $7.5 million in penalties to settle allegations that it operated 46 aircraft on 60,000 flights without completing mandatory maintenance checks for potential fuselage cracks."
Notwithstanding these widely reported issues, Southwest has continually denied any wrongdoing, while insisting that it has remained compliant with applicable government maintenance and safety regulations.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Southwest's operations were non-compliant with government maintenance and safety regulations; (ii) the foregoing issues were exacerbated by Southwest's undue influence over FAA officials and, consequently, lax regulatory oversight of the Company's operations; (iii) all of the foregoing significantly increased the safety risks to passengers traveling on Southwest flights and heightened governmental scrutiny into the Company; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times.
On April 17, 2018, news sources reported that a Southwest plane had blown an engine, which exploded and caused shrapnel to strike the plane. The explosion resulted in the death of one passenger, who was partially pulled through a large hole as the cabin suffered rapid decompression, and injured seven others. According to the Chairman of the National Transportation Safety Board, the incident marked "the first passenger fatality in a U.S. airline accident since 2009," and that, out of twenty-four fan blades in the engine at issue, one was missing. On this news, Southwest's stock price fell $0.62 per share, or 1.13%, to close at $54.27 per share on April 17, 2018.
On April 19, 2018, during pre-market hours, the FAA announced that it would "order inspections of at least 220 aircraft engines as investigators are focusing on a broken fan blade in an engine that exploded." According to news sources, the order was initially proposed in August 2016, following the earlier incident in which engine failure had also resulted from a broken fan blade. Critics also reportedly questioned why the FAA had not acted sooner in conjunction with their European counterparts. On this news, Southwest's stock price fell $1.02 per share, or 1.83%, to close at $54.80 per share on April 19, 2018.
On June 21, 2018, near the end of the trading session, news sources reported that eight passengers were suing Southwest in connection with the engine explosion in April 2018. On this news, Southwest's stock price fell $1.24 per share, or 2.33%, to close at $51.91 per share on June 22, 2018.
Finally, on June 25, 2019, during after-market hours, the Wall Street Journal published an article entitled "FAA Reassigns Senior Managers in Office Overseeing Southwest Airlines," which reported that the FAA had "removed three senior managers in the office overseeing Southwest Airlines Co., amid allegations of lax safety enforcement raised by agency whistleblowers and various resulting government inquiries." The article also noted that "[t]he [DOT]'s inspector-general has been looking into some of the safety issues for many months . . . including lapses by the airline in documenting maintenance for more than 100 of its jets," as well as "failures to reliably compute the weight of checked baggage and hazardous landing incidents in which one aircraft smacked a wingtip on the tarmac and another ran off the strip in stormy weather.
On this news, Southwest's stock price fell $0.30 per share, or 0.59%, to close at $50.70 per share on June 26, 2019.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
SOURCE Pomerantz LLP