Delta Faces $500 Million Loss from Global Tech Outage Disruption

• Delta Air Lines estimates a $500 million cost due to a global tech outage, including lost revenue and compensation expenses.
• The outage, triggered by a CrowdStrike update bug, disrupted flights, communications, and businesses globally.
• Delta, the hardest hit among airlines, is under investigation by the U.S. Department of Transportation for its slow recovery and customer service issues.

Delta Air Lines CEO Ed Bastian has reported that the airline is facing approximately $500 million in costs related to a significant global tech outage this month. The outage, which lasted five days, disrupted emergency services, communications, and thousands of businesses, including Delta, which was severely impacted, reports ABC News.

Global tech outage

Bastian detailed that the $500 million figure includes both lost revenue and compensation costs, such as tens of millions of dollars per day spent on compensation and hotel accommodations for affected passengers. The disruption led to the cancellation of thousands of Delta flights and had a profound effect on the airline’s operations.

The global tech outage was caused by a bug in a CrowdStrike update, which resulted in the company’s cybersecurity systems disseminating erroneous data to millions of customer computers. This technical glitch grounded flights, interrupted TV broadcasts, and caused significant disruptions across banks, hospitals, and retailers.

CrowdStrike has since outlined corrective measures to prevent a recurrence of the issue. These measures include staggering update rollouts, giving customers more control over the timing and deployment of updates, and providing more detailed information about planned updates.

Among airlines, Delta was hit hardest by the outage. The U.S. Department of Transportation is investigating the airline’s response to the crisis, including why it struggled to recover as quickly as its competitors. Transportation Secretary Pete Buttigieg has noted that the investigation will also focus on Delta’s customer service issues, including long lines for assistance and reports of unaccompanied minors being stranded at airports.

In response to the financial impact of the outage, Delta is pursuing damages from the disruption. However, CrowdStrike has not yet offered financial compensation to Delta but has provided free consulting advice to assist with the recovery process.