Delta reported that it lost $380 million in revenue due to the disruption caused by a CrowdStrike outage.
Editor Thenews24.net
2 min read
A Delta Airlines Airbus A319-114, arriving from Las Vegas, was seen taxiing at Los Angeles International Airport on May 5, 2024. According to Delta Air Lines, the CrowdStrike outage last month, which led to widespread flight cancellations, resulted in a financial loss of approximately $550 million. The airline is seeking compensation from both CrowdStrike and Microsoft.
Delta’s financial loss includes a $380 million revenue decline this quarter, largely due to customer refunds and compensation in cash and SkyMiles. Additionally, the airline incurred $170 million in costs related to the technology outage and subsequent recovery efforts. However, Delta’s fuel expenses are expected to be $50 million lower due to the canceled flights.
The outage, which occurred on July 19, led to the cancellation of around 7,000 flights, significantly impacting Delta more than its competitors during the peak summer travel season. This disruption left thousands of passengers stranded, a rare occurrence for Delta, which prides itself on reliability. CEO Ed Bastian emphasized that such a disruption is unacceptable and assured that Delta’s operations have since returned to their high standards.
The U.S. Department of Transportation is investigating Delta’s handling of the outage and the subsequent flight cancellations. CrowdStrike, in response, accused Delta of spreading a misleading narrative and stated that their chief security officer was in contact with Delta’s security team shortly after the incident.
Delta’s lawyer, David Boies, mentioned that 1.3 million customers were affected and that 37,000 Delta computers were shut down due to the outage. He insisted that CrowdStrike must take responsibility and compensate Delta for the significant damage caused. Boies also noted that about 60% of Delta’s critical applications and data rely on Microsoft and CrowdStrike, and the disruption required extensive human intervention to restore normal operations.
In related news, the NTSB is scrutinizing Boeing’s 737 Max production issues, Boeing has appointed Kelly Ortberg as the new CEO, and Southwest Airlines is making significant changes by eliminating open seating and offering extra legroom.