Delta Bleeds Money After Tech Disaster, Pursues Legal Claims Against CrowdStrike And Microsoft

Author: Lekha Gupta | August 09, 2024 06:16am

Yesterday, Delta Air Lines, Inc. (NYSE:DAL) disclosed that it expects the latest operational disruptions resulting from the outage incident to have a direct revenue impact of $380 million for the September quarter due to flight cancellations and customer compensation in cash and SkyMiles.

As Delta has previously communicated, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) induced outage on July 19 led to significant operational disruptions, including about 7,000 flight cancellations over five days.

Also See: Delta Air Lines CEO Calls Microsoft ‘Most Fragile Platform’ After CrowdStrike Outage Causes $500M Loss: ‘When Was The Last Time You Heard About A Big Outage At Apple?’

The company anticipates non-fuel expenses related to the outage and recovery of $170 million, covering customer reimbursements and crew costs.

Also, Delta Air Lines projects fuel expenses of $50 million lower due to flight cancellations, which will reduce the projected Y/Y capacity growth for the September quarter by about 1.5 percentage points.

Ed Bastian, Delta’s Chief Executive Officer, said, “An operational disruption of this length and magnitude is unacceptable, and our customers and employees deserve better.”

“We are pursuing legal claims against CrowdStrike and Microsoft to recover damages caused by the outage, which total at least $500 million,” Bastian added.

Related: Microsoft Blames Delta’s Outdated IT For Delayed Global Cyber Outage Recovery After Airline Decides To Seek Damages Against Software Giant And CrowdStrike

Yesterday, the company was reportedly being sued by passengers who allege the carrier refused to issue full refunds following delays or cancellations caused by the computer outage.

According to Benzinga Pro, DAL stock has lost around 12% in the last 12 months. Investors can gain exposure to the stock via the U.S. Global Jets ETF (NYSE:JETS) and the Defiance Hotel, Airline, and Cruise ETF (NYSE:CRUZ).

Price Action: DAL shares are up 0.20% at $39.69 premarket at the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Shutterstock

Read Next:

• Delta Will Have To ‘Explain’ Why It Didn’t Take Responsibility — Security Company’s Lawyers Fireback At Tech Crash-Hit Airline After It Threatens To Sue Microsoft And CrowdStrike

Posted In: CRUZ CRWD DAL JETS MSFT