Delta is seeking at $500 million in reparations from CrowdStrike and Microsoft following a major IT outage in July.
Delta Airlines has reported that the global IT outage cost the company $550 million, according to a regulatory filing on Thursday. The financial hit stems from a massive technical glitch that grounded 7,000 flights over five days, making it one of the most significant tech failures in recent history. Delta's filing also reignited tensions between the airline, cybersecurity firm CrowdStrike, and software company Microsoft, as each company continues to deflect blame for the incident.
Delta's filing breaks down the financial damage caused by the glitch. The airline estimates a $380 million revenue loss due to several passengers demanding refunds for their canceled flights, forcing Delta to compensate them with cash and SkyMiles. In addition to this, Delta spent around $170 million on recovery efforts, including reimbursing customers and supporting crew members affected by the disruption. However, Delta noted that its overall fuel expenses were $50 million lower than usual, a direct result of the extensive flight cancellations during the outage.
The dispute between Delta, CrowdStrike, and Microsoft has intensified in recent weeks. In a letter penned on Thursday, Delta, through its attorney David Boies, expressed disappointment in CrowdStrike's response to the incident. The letter criticized CrowdStrike for what Delta claims was a "blame the victim" stance, suggesting that the airline was somehow responsible for the software failures that caused the outage.
Delta pointed out that CrowdStrike's CEO, George Kurtz, offered assistance to Delta CEO Ed Bastian almost four days after the incident started. At that point, it was already considered too late. The critical systems requiring attention were located in areas that needed government-mandated clearances, complicating recovery efforts.
Delta's letter also revealed that CrowdStrike's eventual automated solution, offered on July 21, introduced a new bug that further hampered recovery efforts. This bug allegedly prevented many machines from recovering without additional human intervention, exacerbating the already chaotic situation.
CrowdStrike has countered Delta's claims, arguing that it provided timely and substantial support during the crisis. A CrowdStrike spokesperson told Axios that CEO George Kurtz contacted Delta board member David DeWalt within four hours of the initial incident on July 19. Additionally, CrowdStrike's chief security officer was reportedly in direct communication with Delta's Chief Information Security Officer (CISO) soon after the outage began, offering technical assistance and information.
The spokesperson also highlighted a LinkedIn post from Delta board member David DeWalt, praising CrowdStrike's efforts. DeWalt's post credited Kurtz and his team for their swift response, noting that they had "worked through the night in difficult circumstances" to deliver a fix.
As the companies keep on pointing fingers, Delta is moving forward with legal action. In its regulatory filing, CEO Ed Bastian stated that the airline is pursuing legal claims against both CrowdStrike and Microsoft, seeking to recover at least $500 million in damages caused by the outage. The ongoing dispute suggests that this legal battle could be lengthy and contentious, with significant implications for all parties involved.
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