Delta Air Lines recently disclosed that last month’s CrowdStrike outage resulted in a staggering $550 million loss for the company. This significant financial impact includes a $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. Additionally, the airline incurred a $170 million expense associated with the technology-driven outage and subsequent operational recovery. The outage led to the cancellation of approximately 7,000 flights, causing further financial strain on the company.
In the wake of the July 19 outage, Delta Air Lines faced significant challenges in recovering from the disruption. Unlike its competitors, Delta struggled to restore normal operations swiftly, resulting in widespread customer inconvenience. The outage occurred during the peak summer travel season, leaving thousands of Delta customers stranded. This incident was particularly rare for Delta, a premium carrier known for its reliability and top-notch customer service. The airline’s cancellations in the aftermath of the outage exceeded its total for the entire year of 2019.
Following the outage, Delta’s CEO, Ed Bastian, expressed strong dissatisfaction with the situation. In a letter to CrowdStrike’s attorney, Delta’s lawyer, David Boies, highlighted the impact of the outage on 1.3 million customers and the shutdown of 37,000 Delta computers. Bastian emphasized that such a prolonged and widespread operational disruption was unacceptable, and that customers and employees deserved better. Despite the challenges faced, Bastian commended Delta’s employees for successfully restoring operations to an industry-leading level post-outage.
In response to the outage, Delta Air Lines is pursuing damages against both CrowdStrike and Microsoft. The company’s lawyers have emphasized the need for accountability and compensation for the severe damage caused to Delta’s business, reputation, and goodwill. CrowdStrike and Microsoft have defended their actions, stating that they offered assistance to Delta during the outage. Microsoft also suggested that Delta may need to invest more in its technology infrastructure compared to its competitors.
The CrowdStrike outage had a significant and costly impact on Delta Air Lines, resulting in substantial financial losses and operational disruptions. The incident serves as a stark reminder of the importance of robust technology systems and crisis management protocols in the airline industry. Delta’s response to the outage highlights the need for accountability, transparency, and swift recovery in the face of unforeseen challenges.