Delta to seek "at least $500 million" from CrowdStrike and Microsoft
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Travelers wait in line at a Delta Airlines counter amid the global CrowdStrike outage on July 19. Photo: Ting Shen/Bloomberg via Getty Images
Delta said July's global IT outage cost it $550 million in a regulatory filing on Thursday and also shot back at CrowdStrike's response to an initial letter threatening legal action against CrowdStrike and Microsoft.
Why it matters: The three-way blame game involving Delta, CrowdStrike and Microsoft continues to escalate as each company tries to clear the air about its role in one of the largest tech glitches in recent history.
By the numbers: Delta said it estimates that the event caused a $380 million revenue hit related to refunding customers for their initial flight costs and also providing them with cash and SkyMiles, according to Thursday's filing.
- Delta also spent about $170 million on other recovery expenses, including those tied to the operational needs of reimbursing customers and helping crew members affected by flight cancellations.
The intrigue: Delta says its overall fuel expense is estimated to be $50 million lower due to the 7,000 flight cancellations over five days.
What they're saying: Delta, through its lawyer David Boies, said in a letter Thursday it was "surprised and disappointed" by CrowdStrike's decision to use a "blame the victim" defense by suggesting that Delta was "in any way responsible for the faulty software that crashed systems around the world."
- Delta also called "CrowdStrike CEO George Kurtz' single offer of support to [Delta CEO] Ed Bastian on the evening of Monday, July 22" — nearly four days after the outage — "unhelpful and untimely."
- By then, the remaining machines that needed assistance were located in areas that required government-mandated clearances.
- "It required significant human intervention by skilled crew specialists to get Delta people and aircraft to the right locations to resume normal, safe operation," the letter says.
- Delta also said a second bug was introduced after CrowdStrike "eventually offered a supposed automated solution" on Sunday, July 21. That bug "prevented many machines from recovering without additional intervention," per Thursday's letter.
Between the lines: Approximately 60% of Delta's mission-critical applications and their associated data, including back-up systems, used Windows and CrowdStrike, Delta's lawyer said in its letter.
The other side: "Delta continues to push a misleading narrative. CrowdStrike CEO George Kurtz called Delta board member David DeWalt within four hours of the incident on July 19th," a CrowdStrike spokesperson told Axios in a statement.
- "CrowdStrike's chief security officer was in direct contact with Delta's CISO within hours of the incident, providing information and offering support. CrowdStrike's and Delta's teams worked closely together within hours of the incident, with CrowdStrike providing technical support beyond what was available on the website," the spokesperson added.
- "This level of customer support led Delta board member David DeWalt to publicly state on LinkedIn: 'George and his team have done an incredible job, working through the night in difficult circumstances to deliver a fix. It is a huge credit to the Crowdstrike team and their leadership that many woke up to a fix already available.'"
What we're watching: "We are pursuing legal claims against CrowdStrike and Microsoft to recover damages caused by the outage, which total at least $500 million," Bastian said in the regulatory filing.
