CrowdStrike tech outage cost Delta half a billion dollars, airline’s CEO says

The CEO of Delta Air Lines says a recent tech outage that knocked its computer systems offline for days cost the carrier half a billion dollars.

A software upgrade carried out by the cybersecurity firm CrowdStrike earlier this month contained a bug, and crippled more than 8 million Microsoft systems across the globe. Airlines were hit particularly hard, but none more than Delta, which canceled and delayed thousands of flights from July 19-24.

“It was terrible,” said CEO Ed Bastian in an interview Wednesday on CNBC’s morning news and talk show “Squawk Box.” “It was a really tough situation.”

Bastian apologized to customers and employees as he made his remarks while in Paris, which is hosting the summer Olympic Games. Delta flew many of America’s athletes to the games.

Delta is a Microsoft shop, Bastian said, and the CrowdStrike glitch affected nearly all of the carrier’s 40,000 servers, and all of them had to be reset, he said.

Bastian lashed out at both Microsoft and CrowdStrike, saying “they have not delivered exceptional service.”

“We thought we had the best. You have to test the stuff. You can’t come in to a mission critical, 24/7 operation and tell us you have a bug. It doesn’t work,” Bastian said during the interview.

The CEO said Delta “has no choice” but to seek compensation from the company, but did not elaborate on exactly what that means.The carrier has largely recovered from the outage, and has only canceled about 100 flights systemwide over the past week, Bastian said. But the airline, which has a major presence at Minneapolis-St. Paul International Airport, shelled out hundreds of millions of dollars a day in compensation and hotels to affected travelers while the outage dragged on for days, Bastian said.

Besides financial losses, Delta suffered “reputational damage,” Bastian said.

The U.S. Department of Transportation is investigating why Delta failed to recover as quickly as other airlines. Transportation Secretary Pete Buttigieg said last week that the department would also examine Delta’s customer service, including “unacceptable” lines for assistance and reports that unaccompanied minors were stranded at airports.

Includes reporting by the Associated Press.