Delta Air Lines CEO Ed Bastien said Wednesday that a massive IT outage earlier this month that stranded thousands of customers will cost the airline $500 million.

The figure includes not only lost revenue but also “tens of millions of dollars in compensation and hotel costs per day” over five days, Bastien said. The figure is roughly in line with analyst estimates. Delta did not disclose how many refund and reimbursement requests it processed, but a spokesman said it was in the “thousands.”

Microsoft canceled more than 5,000 flights as of July 25, more than it did in all of 2019. The outage was caused by a failed CrowdStrike software update that took thousands of Microsoft systems offline worldwide. Bastien said the company had to manually reset 40,000 servers.

After the outage, Delta’s platform for matching crews with aircraft was unable to keep up with the changes, leading to further outages.

The issue is similar to Southwest Airlines’ 2022 year-end holiday season, when severe weather caused flight disruptions and passengers suffered losses. Delta’s incident shows how problems with just one of the many technology platforms airlines rely on can cause massive disruptions.

Other airlines recovered more quickly from the CrowdStrike problem, while Delta’s cascading outages and customer reactions prompted an investigation by the U.S. Department of Transportation. The crisis is rare for a carrier that prides itself on being a premium airline that ranks among the best in the U.S. for profitability and punctuality.

Bastien, who flew from Paris last week, told CNBC’s “Squawk Box” on Wednesday that the airline will seek compensation for the flight disruptions, adding, “We don’t have a choice.”

“If you’re going to get access to the technology, priority access to the Delta ecosystem, you have to test these things. You can’t be in the middle of a 24/7 mission-critical operation telling us we have a vulnerability,” Bastien said.

Bastien added that CrowdStrike has so far not offered to help Delta financially, only to provide free consulting advice to help them deal with the aftermath of the outage. A CrowdStrike spokesperson said in an emailed statement that the company was “not aware of the litigation and therefore has no further comment.” Microsoft did not immediately respond to a request for comment.

Delta has hired David Boies, a prominent attorney known for representing the U.S. government in a landmark antitrust case against Microsoft, to pursue claims against CrowdStrike and Microsoft, CNBC reported earlier this week.

“We have to protect our shareholders. We have to protect our customers, our employees, because the damage is not just the cost, it’s the brand and the reputation,” Bastien said.
Related product recommendations:
ABB DSAI 110 57120001-DP
Honeywell FSC 10020/1/2
Honeywell 8C-TAIXB1 51307129-175
Yokogawa CP401-11
Bently Nevada 330905-08-13-10-12-CN
Honeywell FS-IOBUS-HBS
8-8-16M/PS/AUX 00-88060-019
Bently Nevada 330101-00-20-10-12-05
Bently Nevada 330101-00-20-10-12-05
Advanced 1747-ACN15
IS415UCVHH1A
IS215UCVHM06A
1769-BOOLEAN
METSO R/I-TB 9139041
YASKAWA JANCD-JSP04-1
FOXBORO PO911SM
DS200DCFBG2BNC
Honeywell CC-PAOX01 51405039-275
more……