Delta Air Lines recently disclosed that the CrowdStrike outage in the previous month, along with the subsequent mass flight cancellations, resulted in a hefty cost of approximately $550 million. This financial impact includes a significant $380 million revenue hit in the current quarter, primarily due to refunding customers for canceled flights and providing compensation in the form of cash and SkyMiles. The Atlanta-based airline has made it clear that it is pursuing damages against CrowdStrike, the company behind the outage, as well as Microsoft, emphasizing the detrimental consequences of the incident.
The airline faced a challenging situation where it had to cancel around 7,000 flights, leading to an additional cost of $170 million associated with the technology-driven outage and the subsequent operational recovery. Despite its efforts, Delta struggled more than its competitors to bounce back from the July 19 outage, which affected millions of Windows-based machines worldwide. The incident occurred during the peak summer travel season, leaving thousands of Delta customers stranded. CEO Ed Bastian expressed his disappointment, stating that such an operational disruption of significant length and magnitude is unacceptable, emphasizing that customers and employees deserve better.
Following the disruptive event, Delta’s cancellations in the aftermath exceeded the total number for the entire year of 2019, triggering an investigation by the U.S. Department of Transportation into the airline’s response to the outage and the resulting flight cancellations. In response to Delta’s claims, CrowdStrike issued a statement asserting that the airline is promoting a misleading narrative, noting that their chief security officer was in direct contact with Delta’s chief information and security officer shortly after the incident, providing necessary information and support.
Delta’s lawyer, David Boies, addressed CrowdStrike in a letter, revealing that 1.3 million customers were impacted by the outage, leading to the shutdown of 37,000 Delta computers. In the ongoing back-and-forth, CrowdStrike and Microsoft countered Delta’s claims by stating that they had offered assistance to the airline. Microsoft even hinted at Delta’s lack of investment in technology compared to its competitors. Boies, in his letter to CrowdStrike, emphasized that if the company wants to avoid a lawsuit, they must take responsibility for their actions and compensate Delta for the significant damage caused to its business, reputation, and goodwill.
The aftermath of Delta Air Lines’ CrowdStrike outage underscores the critical importance of robust technology infrastructure and swift response mechanisms in the aviation industry. The fallout from the incident serves as a stark reminder of the potential financial losses and reputational damage that can result from operational disruptions of this scale. Moving forward, it is imperative for airlines to prioritize technology investments and proactive risk management strategies to safeguard against such costly consequences in the future.
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