Delta Air Lines recently revealed that the CrowdStrike outage in the previous month led to mass flight cancellations, resulting in a hefty financial impact of $550 million. The airline stated that this impact included a $380 million revenue loss in the current quarter, which was mainly due to refunding customers for cancelled flights and providing compensation in the form of cash and SkyMiles. Additionally, Delta incurred a $170 million expense related to the technology-driven outage and subsequent operational recovery, leading to a $50 million decrease in fuel costs due to the cancelled flights.
Delta Air Lines faced significant challenges in recovering from the July 19 outage compared to its competitors. The outage, which affected millions of Windows-based machines worldwide, resulted in the cancellation of approximately 7,000 flights. This disruption occurred during the peak summer travel season, leaving thousands of Delta customers stranded. The carrier, known for its reliability and premium service, surpassed its total number of cancellations for the entire year of 2019 in the aftermath of the outage.
In response to the outage, Delta Air Lines’ CEO Ed Bastian expressed disappointment, stating that such a prolonged and impactful operational disruption was unacceptable. He emphasized that both customers and employees deserved better treatment. Delta’s legal team also made it clear that they were pursuing damages against CrowdStrike and Microsoft, holding them responsible for the severe damage caused to the airline’s business, reputation, and goodwill. Despite the challenges faced, Delta managed to restore its operations to an industry-leading level in line with customer expectations.
CrowdStrike and Microsoft’s lawyers responded to Delta’s claims by stating that they had offered assistance to the airline during the outage. Microsoft implied that Delta may not have invested enough in its technology infrastructure compared to its competitors. However, Delta’s lawyer, David Boies, maintained that CrowdStrike needed to accept responsibility for its actions and compensate Delta for the significant harm inflicted on its operations.
The CrowdStrike outage had a substantial financial impact on Delta Air Lines, resulting in revenue losses, operational expenses, and reputational damage. The incident highlighted the importance of robust technology infrastructure and disaster recovery plans in the airline industry. Delta’s response to the outage demonstrated a commitment to customer satisfaction and operational excellence, despite the challenges faced. Moving forward, it remains essential for airlines to prioritize investments in technology to prevent similar disruptions and protect their business interests.