CrowdStrike revealed that Delta Air Lines refused onsite assistance during the major outage that led to thousands of flight cancellations last month. This decision by Delta caused significant financial losses amounting to $500 million, including compensation to customers. The airline’s CEO, Ed Bastian, stated on CNBC’s “Squawk Box” that seeking damages is the only option left for Delta following the massive cancellations at a crucial time of the year.
Furthermore, Bastian informed Delta’s staff that the company would be pursuing legal claims against CrowdStrike and Microsoft to recover the losses incurred as a result of the outage. The hiring of law firm Boies Schiller Flexner was also mentioned. In response, CrowdStrike’s lawyer, Michael Carlinsky, criticized Delta’s litigation threats, emphasizing that the airline’s narrative wrongly blamed CrowdStrike for its IT decisions and response to the outage. It was revealed that CrowdStrike’s CEO, George Kurtz, offered onsite assistance to Delta, but received no response.
The outage, caused by a faulty software update on July 19, led to the cancellation of more than 5,000 Delta flights until July 25, surpassing its competitors. This incident resulted in a decline of over 36% in CrowdStrike’s shares value. The widespread impact of the outage affected various industries, from banking to healthcare to air travel.
Carlinsky’s letter highlighted that if Delta chooses to take legal action, it will have to justify its decision to the public, shareholders, and potentially a jury. The responsibility shown by CrowdStrike in response to the incident was contrasted with Delta’s approach. The letter also mentioned that Delta would need to retain several documents related to its IT infrastructure, business continuity plans, and past outage management over the last five years. Additionally, CrowdStrike’s liability is limited to a few million dollars as per the contract terms.
Delta Air Lines’ Response
Delta did not provide a statement regarding Carlinsky’s letter at the time. However, CrowdStrike expressed its willingness to collaborate with Delta towards resolving the situation. Bastian defended Delta’s actions, stating that they did their best to assist customers during the crisis. He emphasized the importance of testing technology before implementing it in a critical 24/7 operation.
Future Plans and Legal Challenges
CrowdStrike announced plans to release software updates gradually in the aftermath of the incident. On July 30, shareholders of the company filed a lawsuit in a Texas federal court seeking compensation for the decline in their investments. CrowdStrike is scheduled to report its second-quarter financial results on August 28.
The refusal of onsite help by Delta Air Lines during the outage, the subsequent legal threats, and the contrasting responses by CrowdStrike have led to a complex situation with potential legal ramifications. As the investigation unfolds, it remains to be seen how both companies will navigate the challenges and reach a resolution.