Dive Brief:
- Disruption from the CrowdStrike outage cost Delta Air Lines $500 million in five days, including lost revenue and customer compensation, CEO Ed Bastian said Wednesday in an interview with CNBC.
- Bastian attributed Delta’s delayed recovery from the outage to a heavy reliance on both Microsoft and CrowdStrike services, and said the airline’s IT team manually reset 40,000 servers impacted by the outage.
- Bastian also said during the interview the company plans to seek damages from Microsoft and CrowdStrike. “We’re looking to make certain that we get compensated, however they decide to, for what they cost us,” Bastian said.
Dive Insight:
The CrowdStrike outage kicked off in the early morning hours of July 19 and took down 8.5 million Windows devices globally. It was the most consequential IT outage in recent memory and heavily disrupted the airline industry.
Delta retained Boies Schiller Flexner LLP to pursue legal action against Microsoft and CrowdStrike, a person with knowledge of the matter told CIO Dive. CNBC first reported the news.
Delta was the hardest hit major airline, and the last to fully recover, but it was not alone. More than 1,600 United Airlines flights were canceled in the wake of the outage, as the company scrambled to manually reboot more than 26,000 computers.
American Airlines also grounded over 900 flights in the days after the outage. The company credited its IT team for a prompt systems recovery.
The ensuing disruption to operations across businesses is expected to have cost Fortune 500 companies $5.4 billion. Experts say the debacle will also drive up prices for cyber insurance and increase scrutiny on underwriting.
Delta did not immediately respond to a request for comment on its plans to seek compensation from Microsoft and CrowdStrike. However, Bastian said the debacle is prompting the company to rethink how its systems are set up.
“People don’t realize Microsoft and CrowdStrike are the top two competitors around cyber with each other,” Bastian said. “They don’t necessarily partner at the same level that we need them to. I think this is a call to the industry everyone talks about: making sure big tech is responsible.”
Delta’s delayed recovery also garnered attention from the Secretary of Transportation Pete Buttigieg, who said the department plans to investigate the airline’s handling of the disruption.
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