Delta CEO Ed Bastian said that the massive IT outage earlier this month that stranded thousands of customers will cost $500 million. This includes not just lost revenue but also tens of millions of dollars in compensation and hotels over a five-day period.
The airline canceled more than 5,000 flights, which is more than it had in all of 2019. The outage was caused by a botched CrowdStrike software update that took thousands of Microsoft systems around the world offline.
Delta had to manually reset 40,000 servers and its platforms for matching flight crews to planes couldn’t keep up with the changes, leading to further disruptions. This issue is similar to what Southwest Airlines customers experienced when bad weather caused problems during year-end holidays in 2022.
The airline’s disruption highlighted how a problem with just one technology platform can cause large-scale disruptions. Delta will seek damages from the disruptions and has hired prominent attorney David Boies to represent it in lawsuits against CrowdStrike and Microsoft.
Bastian said that Delta has no choice but to take action, as it needs to protect its shareholders, customers, and employees from the damage caused by the outage.
Source: https://www.cnbc.com/2024/07/31/delta-ceo-crowdstrike-microsoft-outage-cost-the-airline-500-million.html