We know it can be frustrating when a technology vendor you selected makes it difficult to run your business. Unfortunately, sometimes things happen that are out of our control, and operating your oligopolist, bank-masquerading-as-airline can be affected.https://t.co/NS9Zb66L0n
— Ian Bogost (@ibogost) July 31, 2024
Delta Air Lines CEO Ed Bastian said the recent IT outage caused by a faulty CrowdStrike software update cost the airline $500 million. The figure includes lost revenue and compensation for affected passengers over a five-day period. Bastian stated that Delta has “no choice” but to seek damages from the disruptions.
He emphasized the need to protect the company’s shareholders, customers, and employees from the financial and reputational damage. The outage led to the cancellation of more than 5,000 Delta flights and affected thousands of customers. The airline had to manually reset 40,000 servers in the aftermath of the incident.
Delta Air Lines CEO said the company lost $500 million due to the a days long meltdown that kicked off by the global CrowdStrike-Microsoft outage.
CNBC: https://t.co/e2yqS6pVGE
— Greg Angel (@NewsGuyGreg) July 31, 2024
Coincidentally, $500 million is also the Delta Amex spend level at which you finally reach Diamond status https://t.co/yp2hgAlqAQ
— Scott Wessman (@scottew) August 1, 2024
CrowdStrike has offered free consulting advice to help Delta deal with the fallout but has not provided any financial assistance.
Delta faces fallout from IT outage
Bastian expressed his disappointment, saying, “If you’re going to be having access, priority access to the Delta ecosystem in terms of technology, you’ve got to test the stuff.
You can’t come into a mission-critical 24/7 operation and tell us we have a bug.”
“We have to protect our shareholders. We have to protect our customers, our employees, for the damage, not just to the cost of it, but to the brand, the reputational damage and the physical channel,” – Ed Bastian on CNBC. https://t.co/qfoMNn5FHl
— Ben Bearup (@TheAviationBeat) July 31, 2024
Delta has hired prominent lawyer David Boies to seek damages from both CrowdStrike and Microsoft. Boies is known for representing the U.S. government in its landmark antitrust case against Microsoft. The U.S. Department of Transportation has launched an investigation into Delta’s handling of the disruption and its customer support during the incident.
CrowdStrike is also facing a lawsuit from its shareholders, who accuse the company of making “false and misleading” statements about its software testing. The lawsuit claims that CrowdStrike’s share price dropped by 32% in the days following the outage, resulting in a $25 billion loss in market value. As the situation continues to develop, further legal actions and company responses are expected.
The incident has highlighted the critical importance of thorough software testing and the potential risks associated with cybersecurity failures in today’s digital landscape.
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