Delta CEO Says CrowdStrike Tech Outage Cost It $500 Million

Delta has hired prominent litigator David Boies, chairman of the firm Boies Schiller Flexner, and notified CrowdStrike and Microsoft MSFT -0.89%decrease; red down pointing triangle to prepare for litigation.

“We have no choice,” Bastian said on CNBC Wednesday. “Between not just the loss of revenue, but the tens of millions of dollars per day in compensation and hotels. We did everything we could to take care of our customers over that time.”

Airline snafus can be costly. Southwest Airlines estimated that its late 2022 meltdown after a brutal winter storm, when it canceled about 16,700 flights over roughly 10 days, cost it over $1 billion in lost revenue and compensation payments to passengers.

The meltdown was uncharacteristic for Delta, which prides itself on running a punctual and reliable operation and looks to appeal to premium customers. Delta has said its crew-tracking system was hopelessly backlogged after the hourslong outage—unable to catch up and pair pilots and flight attendants with flights.

Bastian said Wednesday that Delta was heavily exposed to Microsoft and CrowdStrike—the carrier had 40,000 servers that had to be manually reset, he said.

“You can’t come into a mission-critical, 24/7 operation and tell us you have a bug. It doesn’t work,” he said.

Now the airline is reconsidering technology.

“How do you rethink the fortification? We thought we had the best,” Bastian said.

Delta DAL 0.46%increase; green up pointing triangle Air Lines Chief Executive Ed Bastian said the technology outage associated with a CrowdStrike CRWD -9.72%decrease; red down pointing triangle software update cost the carrier roughly $500 million.

With more than 5,000 flight cancellations over several days, Delta faced deeper disruption and took days longer than rivals to get back on track after the outage knocked key systems offline. The U.S. Department of Transportation is investigating how the airline handled the disruption and its customer response.