CrowdStrike has recently informed Delta Air Lines that it does not believe it is responsible for the airline’s handling of a significant global IT outage that occurred last month. The outage, which impacted millions of Microsoft Windows devices worldwide, was triggered by an update to CrowdStrike’s security software. Delta, one of the major airlines affected, experienced severe operational disruptions, leading to the cancellation of approximately 5,000 flights over a five-day period. This disruption resulted in an estimated financial impact of $500 million for the airline, according to statements made by Delta CEO Ed Bastian.
The problem arose when an update from CrowdStrike intended to enhance security inadvertently caused widespread connectivity issues. Delta was particularly hard hit by the outage, as it severely affected its crew scheduling system. This system is crucial for managing flight operations and ensuring that adequate crew members are available for flights. The disruption led to significant challenges in rescheduling flights and managing logistics, exacerbating the impact on Delta’s operations.
In response to the financial and operational damage, Delta CEO Ed Bastian announced last week that the airline would likely seek damages from CrowdStrike. Bastian’s comments highlighted the substantial cost incurred by the airline due to the outage and the difficulties faced in compensating affected passengers. The airline’s decision to pursue legal action reflects the gravity of the situation and the financial strain imposed on Delta by the incident.
CrowdStrike has disputed the claims of responsibility put forth by Delta. In a letter from CrowdStrike’s legal counsel, Michael Carlinsky, it was asserted that Delta had largely ignored the assistance offered by CrowdStrike in the wake of the outage. The letter also criticized Delta for creating a “misleading narrative” regarding CrowdStrike’s role in the incident. According to Carlinsky, Delta’s public accusations and the potential for legal action were unproductive and did not contribute to resolving the situation effectively.
A spokesperson for CrowdStrike reiterated this stance, expressing regret for the disruption caused but also urging Delta to engage in constructive dialogue rather than pursuing a lawsuit. The spokesperson emphasized that the focus should be on working cooperatively to address the issue rather than escalating legal conflicts.
In addition to the potential legal action from Delta, the airline is also under investigation by the Department of Transportation for its handling of the outage and the resulting flight cancellations. This investigation could scrutinize Delta’s response to the incident and its impact on passengers and operations.
Moreover, the incident has led to broader repercussions, including a class-action lawsuit filed against CrowdStrike in Texas. This lawsuit alleges that CrowdStrike misled shareholders by claiming its software was secure while failing to disclose vulnerabilities that led to the widespread impact of the software update.
The financial impact of the outage has also been reflected in the stock market. CrowdStrike’s shares experienced a significant decline, falling nearly 9% in pre-market trading on Monday to $198.36. This drop represents a more than 40% decrease from the stock’s closing price on July 18, the day before the outage. Delta’s shares also fell, dropping about 6% to $37.50.
The situation continues to evolve, with both CrowdStrike and Delta facing scrutiny from various stakeholders, including investors, regulators, and industry observers. The outcome of the legal and regulatory challenges, as well as the responses from both companies, will be closely monitored as they work to resolve the fallout from this major IT disruption.