Delta Airlines loses $550 million due to CrowdStrike outage

Delta Airlines Thursday last month Crowdstrike The company suffered losses of about $550 million due to the outage and subsequent mass flight cancellations, and Microsoft.

The Atlanta-based airline said in a securities filing that the financial impact will include a $380 million hit to revenue for the current quarter, “primarily due to refunds for canceled flights and customer compensation in the form of cash and SkyMiles.”

The airline said the incident caused the cancellation of about 7,000 flights and incurred costs of $170 million “related to the technical outage and subsequent restoration of operations,” adding that the canceled flights were expected to result in a $50 million reduction in fuel costs.

Delta Air Lines had a harder time recovering than its competitors from a July 19 outage that took millions of Windows-based machines offline around the world. The outage occurred in the middle of the summer travel season and left thousands of Delta customers stranded, an unusual occurrence for an airline that markets itself as a premium airline with a top rating for reliability.

“A disruption of this duration and magnitude is unacceptable and our customers and employees deserve better,” Chief Executive Officer Ed Bastian said in the filing. “Since the incident, our employees have restored operations to an industry-leading position consistent with the level of performance our customers have come to expect from Delta.”

Delta Airlines saw its most flight cancellations in the days following the outages all of 2019. The U.S. Department of Transportation said last month it was investigating Delta’s response to the outages and cancellations.

CrowdStrike said in a statement Thursday that Delta “continues to make misleading claims” and that its chief security officer “was in direct contact with Delta’s chief information and security officer to provide information and support” within hours of the incident.

The outage affected 1.3 million customers and took down 37,000 of Delta’s computers, Delta lawyer David Boies said in a letter to CrowdStrike lawyers on Thursday.

Lawyers for CrowdStrike and Microsoft fired back earlier this week, offering to help Delta Air Lines, after Microsoft suggested Wednesday that Delta has underinvested in technology compared to its rivals.

“If CrowdStrike is serious about avoiding a lawsuit from Delta, it must accept true responsibility for its actions and compensate Delta for the significant damage it has caused to its business, reputation and goodwill,” Boyce said in a letter to CrowdStrike on Thursday.

He said about 60 percent of Delta’s “mission-critical applications” and data depend on Microsoft and CrowdStrike, adding that the disruptions “required significant human intervention by skilled flight crew professionals to properly reposition Delta’s crew and aircraft and resume normal, safe operations.”