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Key Takeaways
- CrowdStrike has informed Delta Air Lines that the cybersecurity company doesn’t believe it’s responsible for the carrier’s handling of last month’s global IT outage that led Delta to cancel thousands of flights.
- An update to CrowdStrike security software sent millions of Microsoft Windows devices across the globe offline last month, with Delta hit particularly hard.
- Last week, Delta CEO Ed Bastian told CNBC the company has “no choice” but to likely seek damages from CrowdStrike, saying the outage cost the airline an estimated $500 million.
CrowdStrike (CRWD) has informed Delta Air Lines (DAL) that the cybersecurity company doesn’t believe it’s responsible for the carrier’s handling of last month’s outage from a software update that impacted millions of Microsoft (MSFT) Windows devices across the globe.
Delta canceled an estimated 5,000 flights in the days following the outage, the hardest hit of the major U.S. airlines, as it said a tool for crew scheduling was especially impacted. This meant flights were difficult to reschedule because the company didn’t know if it would have a full crew available.
Delta Chief Executive Officer (CEO) Ed Bastian told CNBC last week that the five-day stretch of canceled flights and compensating customers cost the airline at least $500 million.
CrowdStrike Says Delta Created ‘Misleading Narrative’
In a letter between the companies’ counsel shared with Investopedia, CrowdStrike attorney Michael Carlinsky said Delta largely ignored its offers for assistance, and contributed to a “miselading narrative” that CrowdStrike is responsible for the way the airline responded to the outage.
“We have expressed our regret and apologies to all of our customers for this incident and the disruption that resulted,” a CrowdStrike spokesperson told Investopedia. “Public posturing about potentially bringing a meritless lawsuit against CrowdStrike as a long-time partner is not constructive to any party. We hope that Delta will agree to work cooperatively to find a resolution.”
Bastian said last week that the company had effectively been left with “no choice” but to seek damages over the outage. “We have nothing to add” beyond Bastian’s comments to CNBC, a Delta spokesperson told Investopedia.
Delta is already facing a Department of Transportation investigation over its handling of the outage and subsequent cancellations. Meanwhile, the first class-action lawsuit was filed against CrowdStrike last week in Texas, claiming shareholders were harmed and misled by the company’s claims that its software was tested and secure while a small update was capable of having such a widespread impact.
CrowdStrike shares tumbled 9% an hour before the opening bell Monday to $198.36, more than 40% below where the stock closed on July 18, the day before the outage. Delta shares were down about 6% to $37.50.