Southwest Settles Lawsuit Over Safety Issues

DAVID KOENIG

DALLAS (AP) — Southwest Airlines Co. has agreed to settle a shareholder lawsuit that grew out of safety violations at the carrier and will pay the investors' lawyers $3.5 million.

Southwest disclosed the proposed settlement in a regulatory filing made Friday. A hearing on the deal was scheduled for Dec. 7 in state district court in Dallas.

The lawsuit was filed in August 2008, after the Federal Aviation Administration announced it would fine Southwest $10.2 million for operating some planes that had not gone through a required inspection for structural soundness. Southwest settled by agreeing to pay a $7.5 million penalty.

The investors said the airline's leaders failed to protect the interests of shareholders.

Southwest declined to comment Monday, but in the settlement document the airline officials said they "believe that they acted properly at all times" and settled the case to avoid a long and costly fight.

Besides paying $3.5 million for the plaintiffs' legal expenses, the Dallas-based company agreed to add safety-related employees throughout the company and increase training for maintenance workers for at least two years.