Delta CEO says IT outage cost the airline $500 million, and it has 'no choice' but to seek damages from CrowdStrike

Nora Redmond
·2 min read
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  • Delta CEO said the IT outage cost $500 million in losses from revenue and passenger compensation.

  • The tech issues, linked to a flawed CrowdStrike update, led to over 5,000 flight cancellations.

  • CEO Ed Bastian said in an interview with CNBC that the carrier has "no choice" but to seek damages.

Delta Air Lines CEO Ed Bastian said the mass IT outage, which resulted in days of delays and cancellations, cost the airline $500 million.

Delta canceled several thousand flights over several days after an IT meltdown caused by a flawed update issued by Texas-based cybersecurity firm CrowdStrike.

Bastian told CNBC in an interview on Wednesday that the half-a-billion figure accounts for "not just the lost revenue, but the tens of millions of dollars per day in compensation and hotels."

CrowdStrike has offered free consulting advice but no other assistance, Bastian said.

When asked if Delta would sue CrowdStrike over the disruptions, Bastian responded: "We have no choice."

"We're not looking to wipe them [CrowdStrike] out, but we're looking to make certain we get compensated — however they decide to — for what they cost us," he said later in the interview.

"We have to protect our shareholders, we have to protect our customers, our employees, for the damage, not just to the cost of it, but to the brand, the reputational damage," Bastian said.

As many airlines began to recover, Delta struggled to restore operations to full capacity, resorting to manually rebooting up to 40,000 systems affected by the outage.

"If you're going to be having priority access to the Delta ecosystem in terms of technology, you've got to test the stuff," Bastian said.

"You can't come into a mission-critical 24/7 operation and tell us we have a bug — it doesn't work."

Earlier this week, CNBC reported that Delta had hired high-profile law firm Boies Schiller Flexner to pursue damages from CrowdStrike and Microsoft.

The company's chair, David Boies, is known for representing Al Gore against George W. Bush in the 2000 presidential election dispute and the US government's antitrust case against Microsoft.

It is unclear if Delta has yet filed any lawsuit. When contacted by Business Insider Thursday, CrowdStrike said it had no knowledge of a suit. Delta did not immediately respond to a request for comment.

The Department of Transportation has already opened an investigation into Delta and whether the airline followed the law and supported customers during the disruption.

Read the original article on Business Insider