Global Tech Outage Costs Delta $500 Million, CEO Says

Delta Air Lines chief executive officer Ed Bastian said on Wednesday that the massive CrowdStrike technology outage earlier this month will cost the company $500 million dollars.

The widespread outage started on July 19 and affected an array of companies, ranging from airline carriers and financial institutions to media companies and thousands of individual Microsoft users.

CrowdStrike, a cybersecurity firm, reported that a software update affected Microsoft’s Windows operating system, which many airlines use for reservations, flight scheduling and other critical functions. It’s been called one of the worst IT failures in history, affecting 8.5 million computers worldwide.

In a Wednesday appearance on CNBC’s Squawk BoxBastian reflected on the mid-July outage that grounded more than 5,000 of its flights, saying “it was terrible.”

Newsweek filed out an online contact form for Delta’s press team on Wednesday.

Delta stood out as the worst carrier affected by the technology outage and the slowest to restore its operations.

Bastian said the outage cost the company half a billion dollars.

“Over a period of five days, not just the lost revenue but the tens of millions of dollars per day in compensation and hotels,” he said on CNBC.

The US Department of Transportation (DOT) launched an investigation into the airlines, citing widespread flight disruptions and customer service failures and accusing Delta of failure to uphold commitments to its passengers. The agency also said the investigation would evolve as the DOT processes a “high volume” of customer complaints.

On July 23, DOT Secretary Pete Buttigieg posted on X, formerly Twitter, that the agency will investigate if the airline is “following the law and taking care of its passengers,” adding that, “all airline passengers have the right to be treated fairly , and I will make sure that right is upheld.”

.@USDOT has opened an investigation into Delta Air Lines to ensure the airline is following the law and taking care of its passengers during continued widespread disruptions.

All airline passengers have the right to be treated fairly, and I will make sure that right is upheld.

— Secretary Pete Buttigieg (@SecretaryPete) July 23, 2024

On Wednesday, Bastian noted that the airline “had 40,000 servers that we physically had to go touch and reset, and they didn’t all come back on the way they went off.” Delta is “heavy with both” CrowdStrike and Microsoft, making the outage impacts severe.

The outage came during peak travel season and just ahead of the Paris 2024 Olympic Games, where Delta is the official partner of Team USA.

“We’ve been up for over a week,” Bastian said.

He added that the airline would seek damages from CrowdStrike and Microsoft.

“We have no choice, they haven’t offered anything except free consulting advice,” Bastian said.

A CrowdStrike spokesperson told Newsweek in an email statement on Wednesday that the company is “aware of the reporting, but have no knowledge of a lawsuit and have no further comment.”