The CEO of Delta Air Lines said the CrowdStrike outage cost the airline $500 million over the course of five days.
The outage last week caused information technology problems worldwide and canceled thousands of flights, but Delta was hit much harder than other U.S. airlines. Delta was forced to cancel more than 5,000 flights during the five-day span, which was more than the airline canceled in all of 2019.
Delta CEO Ed Bastian said the company is now preparing for litigation as it looks to financially recover from the outage. He said CrowdStrike has not offered to pay for the damages.
“If you’re going to be having access, priority access to the Delta ecosystem in terms of technology, you’ve got to test the stuff. You can’t come into a mission critical 24/7 operation and tell us we have a bug,” Bastian told CNBC’s Squawk Box on Wednesday.
The outage was caused by a failed software update from CrowdStrike that crashed operations for millions of Microsoft Windows users. Bastian said the company has “no choice” but to seek damages.
“We have to protect our shareholders. We have to protect our customers, our employees, for the damage, not just to the cost of it, but to the brand, the reputational damage,” he said.
“We’re not looking to wipe them out, but we’re looking to make certain that we get compensated however they decide to for what they cost us. Half a billion dollars in five days,” Bastian added.
Bastian said the $500 million figure includes not just lost revenue but “the tens of millions of dollars per day in compensation and hotels” that were lost over a period of five days. He explained that Delta was hit so hard because they rely on Microsoft and CrowdStrike more for operations compared to other airlines.
“We’re by far the heaviest in the industry with both, and so we got hit the hardest in terms of the recovery capability,” he said.
The company had to manually reset 40,000 servers in order to get operations back online. A lawsuit on behalf of Delta has not yet been filed.
“We are aware of the reporting but have no knowledge of a lawsuit and have no further comment,” a spokesperson for CrowdStrike told NPR.
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Secretary of Transportation Pete Buttigieg launched an investigation into the airline meltdown last week and has made statements to consumers about being committed to getting their money back.
“Delta must provide prompt refunds to consumers who choose not to take rebooking, free rebooking for those who do, and timely reimbursements for food and hotel stays to consumers affected by these delays and cancellations, as well as adequate customer service assistance,” Buttigieg wrote on X.