Delta Air Lines Inc. expects a $380 million revenue loss this quarter due to the technology outage at CrowdStrike Holdings Inc. that forced the airline to cancel thousands of flights last month.
The drop in revenue was mainly due to refunds and compensation in the form of cash and loyalty miles, the airline said in a regulatory filing on Thursday. Delta estimated the cost of reimbursing expenses and staff costs at $170 million.
Delta, which canceled around 7,000 flights over several days following the July 19 outage, had previously said it expected about $500 million in damages and had hired the law firm of well-known attorney David Boies to represent it. The airline confirmed on Thursday that it is taking legal action against CrowdStrike and Microsoft Corp. to seek compensation.
The CrowdStrike outage caused a “catastrophic shutdown” of more than 8 million computers worldwide, including 37,000 at Delta, Boies said in a letter to the technology company’s lawyer on Thursday. The outage affected more than 1.3 million of the airline’s customers, and about 60% of its “mission-critical” applications, including backup systems, depend on the Microsoft Windows operating system and CrowdStrike, he said.
The letter continues a back-and-forth between the three companies’ law firms as they attempt to assign responsibility for the massive disruptions caused by the power outage.
Earlier this week, CrowdStrike and Microsoft said Delta either declined or did not respond to offers of help from the technology companies, including their CEOs. CrowdStrike only directed Delta to a publicly available website to fix the problem during the first 65 hours of the outage, Boies’ letter said. He added that an automated fix offered by CrowdStrike later introduced a second bug.
CrowdStrike disputed Delta’s timeline on Thursday, saying in a statement that the CEO contacted David DeWalt, a Delta director who sits on the board’s security committee, within four hours of the incident. The company also said its security chief is in “direct contact” with his Delta counterpart and is providing technical support beyond what can be found on the website.
DeWalt later posted on LinkedIn that CrowdStrike had done an “incredible job,” CrowdStrike stressed. The Delta director did not immediately respond to a request for comment, and the company declined to comment.
The technology company’s lawyers said that “any liability of CrowdStrike is contractually limited to a single-digit million amount.” Microsoft declined to comment.
Delta said the extended recovery time was due to the outage’s impact on an internal system used to process changes to flights and their crews, which left Delta unable to properly align its aircraft and personnel.
The U.S. Department of Transportation has launched an investigation into Delta’s handling of the breakdown, and depending on the results, the airline could face a fine. Southwest Airlines Co. was fined $140 million by the Department of Transportation in 2023 after a collapse in flight operations in late December 2022 stranded more than 2 million passengers.
