Key Points
- Delta Air Lines incurred a $550 million loss due to the CrowdStrike outage.
- Delta is pursuing damages against CrowdStrike and Microsoft for the disruption.
- The U.S. Department of Transportation is investigating Delta’s response to the incident.
- CrowdStrike claims Delta is promoting a misleading narrative and asserts it offered immediate support.
Delta Air Lines reported a financial hit of approximately $550 million following a significant outage caused by CrowdStrike last month, which led to widespread flight cancellations. The Atlanta-based airline outlined the financial impact in a securities filing on Thursday, which includes a $380 million loss in revenue for the current quarter. This loss primarily stems from refunding customers for the canceled flights and offering compensation in cash and SkyMiles.
The technology-driven outage, which occurred on July 19, forced Delta to cancel around 7,000 flights, resulting in an additional $170 million in expenses related to the operational recovery. However, the airline noted a slight offset of $50 million in fuel bills due to the reduced number of flights.
Delta’s recovery from the outage was notably slower than its competitors, which was a significant setback during the peak of the summer travel season. The disruptions left thousands of Delta passengers stranded, an unusual situation for an airline that prides itself on reliability. The cancellations in the aftermath of the outage exceeded Delta’s total cancellations for 2019.
Delta’s CEO, Ed Bastian, expressed frustration in the filing, stating, “An operational disruption of this length and magnitude is unacceptable, and our customers and employees deserve better.” He assured that the airline’s operations have since returned to a level of performance consistent with Delta’s reputation for industry-leading reliability.
The U.S. Department of Transportation has launched an investigation into Delta’s response to the outage and the subsequent flight cancellations, reflecting the severity of the incident.
CrowdStrike responded to Delta’s claims in a statement, accusing the airline of promoting a “misleading narrative.” The cybersecurity firm asserted that its chief security officer was in direct contact with Delta’s chief information and security officer within hours of the incident, offering information and support.
Delta’s attorney, David Boies, countered in a letter to CrowdStrike on Thursday, highlighting the extensive impact of the outage, which affected 1.3 million customers and shut down 37,000 Delta computers. Boies emphasized that about 60% of Delta’s “mission-critical applications” and their data rely on Microsoft and CrowdStrike, requiring significant manual intervention by skilled crew specialists to restore normal operations.
Boies demanded that CrowdStrike take responsibility for the disruption and compensate Delta for the substantial damage to its business, reputation, and goodwill. Microsoft also weighed in earlier this week, suggesting that Delta may not have invested sufficiently in its technology compared to its rivals.
