Delta Air Lines lost $500 million to CrowdStrike and Microsoft

Delta Air Lines is facing enormous problems after their technology system was thrown into chaos, leading to a five-day outage. The problem, which resulted in a loss of up to $500 million, triggered a wave of criticism against CrowdStrike and Microsoft.

Ed Bastian, CEO of Delta Air Lines $DAL, harshly criticized CrowdStrike $CRWD and Microsoft $MSFT for the failure of their software that led to a widespread outage of computer systems. Bastian said during an interview with CNBC that both companies have shown no willingness to provide compensation or advice to help mitigate the effects of their error.

"They didn't provide us with anything. Not even free counseling to help us," Bastian said. He said the bug in CrowdStrike's software update, which affected not only Delta but hundreds of other companies around the world, was extremely serious.

Computer systems problems led to the failure of a key crew tracking system, which was down for nearly a week. This made it impossible for the company to find the pilots and flight attendants it needed, leading to the cancellation of around 30% of flights and leaving around half a million passengers stranded. The company was forced to cancel some 6 300 flights and spend tens of millions of dollars in customer compensation, including the cost of hotels and other expenses.

Although Delta has not yet filed a lawsuit against CrowdStrike or Microsoft...the company has hired the renowned law firm of David Boies. CrowdStrike and Microsoft have not yet commented specifically on the situation, with CrowdStrike merely stating that it has no knowledge of the lawsuit.

"We have no other option," Bastian said. "We need to protect our shareholders, customers and employees from harm, not just financially, but reputational harm."

CrowdStrike, which ended the latest quarter with $3.7 billion in cash and a $750 million revolving credit limit, is trying to prepare for potential legal claims through insurance policies.

Bastian gave the interview from Paris, where he is based for the Olympics, where Delta is the official airline partner of the U.S. Olympic team. At this point, the company is returning to a normal flight schedule after this emergency.

Source: Yahoo Finance, CNN.

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