Delta takes legal action against tech firms over outage, faces $500 million loss

Delta Air Lines is pursuing legal action against CrowdStrike and Microsoft following a significant outage last month that resulted in widespread flight cancellations. The disruptions affected 1.3 million customers and cost the airline at least $500 million. Delta’s CEO, Ed Bastian, criticised the two companies, holding them accountable for the operational failures.

The trouble began with a software update from cybersecurity firm CrowdStrike, which caused issues for Microsoft customers, including several airlines. Although most carriers recovered the next day, Delta continued to experience problems, leading to the cancellation of about 7,000 flights over five days. The US Transportation Department is now investigating the incident.

CrowdStrike and Microsoft have both denied responsibility for the outages. CrowdStrike threatened to defend itself aggressively if Delta proceeds with legal action, while Microsoft suggested that Delta’s outdated IT infrastructure may have contributed to the prolonged disruptions. Delta’s legal representative, David Boies, dismissed these claims, asserting that the airline had invested heavily in its technology and was not at fault.

The financial impact on Delta has been severe. The airline expects to lose $380 million in direct revenue due to refunds and compensation for the cancelled flights. Additional costs, including customer reimbursements and crew-related expenses, amount to $170 million. However, the reduced flight schedule is anticipated to lower Delta’s fuel bill by $50 million.