Delta Faces $500M Loss After CrowdStrike IT Outage Grounded Flights

Last month’s CrowdStrike IT outage could cost Delta $500 million, according to the airline’s CEO, Ed Bastian.

Airlines globally were forced to ground flights due to the CrowdStrike outage, with Delta being the hardest hit.

The airline had to manually repair more than half of its IT systems, which took days. During this period, Delta canceled more than 5,000 flights, surpassing their total cancellations for all of 2019.

On CNBC’s Squawk Box, Bastian said the outage impacted the airline's revenues significantly. Besides thousands of cancelled flights, Delta had to cover hotel costs for stranded passengers and provide compensation.

“We have no choice,” Bastian said when asked if Delta would seek damages following the outage.

The $500 million figure cited by Bastian far exceeds the $143 million estimated cost airlines incurred during the outage, according to insurer Parametrix. 

In an effort to recover some of its losses, Delta has hired David Boies, chairman of the law firm Boies Schiller Flexner, to represent the company against CrowdStrike. Boies is known for leading the U.S. government’s prosecution of Microsoft in the 2001 antitrust case, U.S. v. Microsoft.

CrowdStrike has not offered compensation to those affected. 

“We have to protect our shareholders,” Bastian said. “We have to protect our customers and employees, considering the financial and reputational damage.”

Related:CrowdStrike Outage Could Cost Fortune 500 Companies $5.4B

Delta’s response has attracted the attention of the Department of Transportation, which received “hundreds of complaints” from passengers about the company’s “unacceptable customer service,” according to Secretary of Transportation Pete Buttigieg. 

The DOT has since opened an investigation into Delta’s actions following the outage.