The Global IT Outage Cost Delta Airlines $500M, CEO Says

This month’s CrowdStrike meltdown was annoying for lots of people—but for some companies, the outage has become a costly headache.

Delta Air Lines, which canceled more than 5,000 flights in the days following the disruption, is facing down a $500 million hole, The Wall Street Journal reported on Wednesday. Delta CEO Ed Bastian added during an interview with CNBC that the airline would be working to recover its losses.

“Between not just the loss of revenue, but the tens of millions of dollars per day in compensation and hotels,” he said, according to the WSJ. “We did everything we could to take care of our customers over that time.”

Earlier in July, a bug in one of CrowdStrike’s quality-control tools let a critical flaw affect some 8.5 million machines using Microsoft Windows, The Wall Street Journal noted. While all sorts of businesses were hurt, airlines were hit particularly hard, with thousands of flights canceled around the world. Some airlines were able to rebound in the immediate aftermath, but Delta took longer to get back up and running due to what Bastian has called a heavier reliance on Microsoft and CrowdStrike. A whopping 40,000 of the airline’s servers had to be manually reset.

Now the Department of Transportation is investigating how Delta handled the ordeal, the WSJ wrote. And Delta has retained an attorney and told Microsoft and CrowdStrike to prepare for a lawsuit, according to letters reviewed by the newspaper. “We are aware of the reporting, but have no knowledge of a lawsuit and have no further comment,” CrowdStrike said in a statement to The Wall Street Journal, while Microsoft declined to comment.

In the past, airlines have similarly been impacted economically when it comes to days-long cancellations and delays. When a 2022 winter storm caused Southwest Airlines to call off almost 17,000 flights over 10 days, it cost the airline $1 billion, the WSJ noted. While companies can’t do much about bad weather, the CrowdStrike outage could have been avoided.

“You’ve got to test this stuff,” Bastian said. “You can’t come into a mission-critical 24/7 operation and tell us you have a bug. It doesn’t work.”

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Now Delta is on the line for the tech company’s mistake, to the tune of half a billion dollars. For the airline, the problems are continuing far past the outage itself.