Delta CEO says CrowdStrike outage cost airline $500 million in 5 days

Delta Air Lines’ CEO says the major CrowdStrike outage that paralyzed flight operations earlier this month, stranding thousands of passengers, cost the airline as much as $500 million.

The outage hit Delta harder than most of its competitors. The airline was forced to cancel more than 5,000 flights as a result of the outage, crippling businesses around the world when a botched software update from CrowdStrike, a major cybersecurity firm, caused operations to fail for millions of users on Microsoft Windows devices.

In an interview with CNBC on Wednesday, Delta CEO Ed Bastian said the airline is now preparing for legal proceedings to deal with the outage.

“We have no choice,” Bastian said of potential action against CrowdStrike. “We don’t want to destroy them, but we want to make sure we get compensated, whatever they decide to pay us for what this has cost us. Half a billion dollars in five days.”

In a public letter released earlier this month, Bastian said the software outage occurred on the “busiest travel weekend of the summer” for the airline with the nation’s third-largest fleet. It caused massive disruptions to Delta’s crew tracking system, a mission-critical tool used to connect pilots and flight attendants with flights.

During an interview with CNBC, Bastian said Delta was heavily dependent on CrowdStrike and Microsoft for its cybersecurity. “We’re definitely the heaviest in the industry when it comes to both, so we’ve been hit the hardest in terms of our ability to recover data,” he said.

According to Bastian, the company had to manually reset 40,000 servers to get back up and running.

He said the Atlanta-based carrier is now back on the road and has had fewer than 100 cancellations over the past seven days, out of a total of more than 30,000 flights. Still, Delta has had to reel from a huge financial and reputational blow. It also faces a U.S. Department of Transportation investigation into its response to the outage.

Delta has not yet filed a lawsuit, but Bastian’s comments could herald the beginning of a wave of lawsuits against CrowdStrike over the outage. Delta has already hired prominent attorney David Boies, president of Boies Schiller Flexner, ahead of a potential lawsuit, according to a source familiar with the decision who was not authorized to speak publicly.

“If you want access, priority access to the Delta ecosystem in terms of technology, you have to test these things. You can’t come into a mission-critical 24/7 operation and tell us we have a bug,” Bastian told CNBC.

In a statement, a CrowdStrike spokesperson said: “We are aware of the reports but are not aware of the lawsuit and have no further comment.”