Shareholders Sue American Airlines

A group of investors in American Airlines has sued the carrier over what it perceives as fraudulent and deceptive practices involving sales and distribution strategies between late January and late May of this year.

The shareholders want whatever money they invested during that time back.

American’s stock price has dropped 26 percent in the year to date.

The investors claim in the lawsuit that airline management painted a rosy picture of its new sales and distribution strategy. In reality, they say, after Executive Vice-President and Chief Commercial Officer Vasu S. Raja surprisingly left the company on May 28, Americans stock price fell more than 13 percent the next day.

The investors who filed the lawsuit claim that at least three members of the airline management made false and deceptive claims about sales and strategy. They say that CEO Robert Isom said he was encouraged by the change in philosophy.

Raja also apparently said during a quarterly conference call earlier this year that some initiatives were “not really creating value for the customer nor creating profit for American Airlines.”

Part of the strategy was to bring all bookings online.

The lawsuit was filed in July. There has been no further comment.