Delta Air Lines recently announced that the CrowdStrike outage and subsequent mass flight cancellations in the past month resulted in a staggering cost of approximately $550 million. The financial implications of this included a $380 million reduction in revenue for the current quarter. This loss was primarily due to refunding customers for canceled flights and providing compensations in the form of cash and SkyMiles. Additionally, the airline incurred an expense of $170 million associated with the technology-driven outage and subsequent operational recovery. Delta also mentioned that its fuel bill is expected to be $50 million lower as a result of the canceled flights.
Delta Air Lines faced significant challenges in recovering from the July 19 outage, during which it had to cancel around 7,000 flights. Unlike its competitors, Delta had a tough time dealing with the aftermath of the incident. The disruption happened during the peak summer travel season, leaving thousands of Delta customers stranded. This incident was unusual for Delta, a carrier that prides itself on being a premium airline known for its reliability. CEO Ed Bastian expressed disappointment in the operational disruption, stating that such a magnitude of issue is unacceptable, and both customers and employees deserve better. However, he commended the efforts of Delta’s employees in restoring the airline’s operations to an industry-leading level post-incident.
The number of flight cancellations experienced by Delta in the aftermath of the outage surpassed the total cancellations for the entire year of 2019. The U.S. Department of Transportation initiated an investigation into Delta’s response to the outage and the resulting flight cancellations. In response, CrowdStrike defended itself by claiming that it maintained direct communication with Delta’s chief information and security officer shortly after the incident. However, Delta’s lawyer highlighted that 1.3 million customers were affected, and 37,000 Delta computers were shut down due to the outage.
Delta Air Lines is currently pursuing damages against CrowdStrike and Microsoft. The airline’s attorney accused CrowdStrike of pushing a misleading narrative and emphasized that the company must take responsibility for the severe damage caused to Delta’s business, reputation, and goodwill. Microsoft, on the other hand, suggested that Delta may not have invested enough in its technology infrastructure compared to its competitors. Despite the efforts made by both CrowdStrike and Microsoft to offer help, Delta remains resolute in seeking compensation for the losses incurred.
The CrowdStrike outage had a far-reaching impact on Delta Air Lines, both financially and operationally. The airline faced substantial losses, not just in terms of revenue but also in customer trust and reputation. As the legal battle unfolds between Delta, CrowdStrike, and Microsoft, the outcome remains uncertain. However, it is evident that the repercussions of this incident will continue to be felt for some time within the aviation industry.