Ed Bastian, chief executive officer of Delta Air Lines Inc., during an interview in New York, US, on Monday, Nov. 7, 2022. Bastian said that he sees ‘strong demand’ for flights carrying into 2023.
Jeenah Moon | Bloomberg | Getty Images
Delta Air Lines CEO Ed Bastian said the massive IT outage earlier this month that stranded thousands of customers will cost it $500 million.
Bastian said the figure is representative of not just the lost revenue, but “the tens of millions of dollars per day in compensation and hotels” over a period of five days.
The airline canceled more than 4,000 flights in the wake of the outage, which was caused by a botched CrowdStrike software update and took thousands of Microsoft systems around the world offline. The company had to manually reset 40,000 servers, Bastian said.
Other airlines recovered faster, and Delta’s cascading disruptions and customer response sparked an investigation by the U.S. Department of Transportation.
Bastian, speaking from Paris, where he traveled last week, told CNBC’s “Squawk Box” on Wednesday that the carrier would seek damages from the disruptions, adding, “We have no choice.”
“If you’re going to be having access, priority access to the Delta ecosystem in terms of technology, you’ve got to test the stuff you got. You can’t come into a mission critical 24/7 operation and tell us we have a bug,” Bastian said.
CrowdStrike has so far made no offers to help Delta financially, Bastian added, besides offering free consulting advice on dealing with the fallout of the outage.
Delta on Monday hired prominent attorney David Boies to seek damages from both CrowdStrike and Microsoft. Boies is known for representing the U.S. government in its landmark antitrust case against Microsoft.
The flight disruptions was a rare meltdown for the carrier that markets itself as a premium airline with top rankings in profitability and punctuality among U.S. carriers.
“We have to protect our shareholders. We have to protect our customers, our employees, for the damage, not just to the cost of it, but to the brand, the reputational damage and the physical channel,” Bastian said.
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