Delta Air Lines faces $380 million revenue hit due to CrowdStrike outage

Delta Air Lines announced that last month’s massive outage caused by CrowdStrike has cost the airline around $380 million in lost revenue. The disruption led to the cancellation of around 7,000 flights, leaving thousands of passengers stranded during the peak of the summer travel season.

Impact of the Outage

  • Revenue Loss: Delta reported a $380 million revenue loss this quarter, mainly due to refunds and compensation given to customers whose flights were canceled.
  • Additional Costs: The airline also incurred $170 million in expenses related to the outage and subsequent recovery efforts. On a slightly positive note, Delta’s fuel costs are expected to be $50 million lower due to the canceled flights.

Response and Recovery

Delta faced a tougher time than its competitors in recovering from the July 19 outage, which took millions of Windows-based systems offline globally. The U.S. Department of Transportation has launched an investigation into Delta’s handling of the situation.

  • CEO’s Statement: Delta CEO Ed Bastian expressed his disappointment in the company’s performance during the crisis, saying, “An operational disruption of this length and magnitude is unacceptable, and our customers and employees deserve better.”
  • Operational Recovery: Despite the challenges, Bastian noted that Delta’s team has worked hard to restore operations to their usual industry-leading standards.

Legal Action and Disputes

Delta is pursuing damages against both CrowdStrike and Microsoft, citing their responsibility in the outage.

  • CrowdStrike’s Response: CrowdStrike has pushed back against Delta’s claims, stating that it had been in direct contact with Delta’s security team within hours of the incident, offering support and information.
  • Legal Battle: Delta’s attorney, David Boies, has accused CrowdStrike of not taking full responsibility for the damages and has demanded compensation. Microsoft, on the other hand, suggested that Delta had not invested enough in its technology infrastructure compared to its rivals.

As Delta continues to recover from this costly incident, the airline is focusing on maintaining its reputation for reliability and ensuring that such disruptions do not happen in the future.