Delta says direct revenue losses from CrowdStrike IT outage total $380 million

Aug. 9 (UPI) -- Delta Airlines said it lost approximately $550 million after it was forced to cancel thousands of flights due to the national CrowdStrike IT outage last month.

Losses were led by a $380 million decline in revenue driven by refunding customers for canceled flights and further compensating them with cash and Delta SkyMiles rewards, the Atlanta-based carrier said in documents filed Thursday with the U.S. Securities and Exchange Commission.

The company's "subsequent operational recovery is estimated at $170 million," although it does expect to spend around $50 million less on fuel costs for the quarter.

Projected year-over-year revenue growth for the quarter ending in September 2024 is expected to be lower by 1.5 points.

The outage related to a software update issued by Texas-based cybersecurity firm CrowdStrike forced Delta to cancel over 7,000 flights over a five-day period beginning July 19.

"An operational disruption of this length and magnitude is unacceptable, and our customers and employees deserve better. Since the incident, our people have returned the operation to an industry-leading position that is consistent with the level of performance our customers expect from Delta," Chief Executive Officer Ed Bastian said in the company's filing with the SEC.

"We are pursuing legal claims against CrowdStrike and Microsoft to recover damages caused by the outage, which total at least $500 million."

Delta was hit harder by the outage than other major U.S. carriers and is facing a federal class-action lawsuit from passengers who were stranded.

The suit contends Delta at first refused to give some automatic refunds due to canceled flights. It also accuses the airline of offering a partial refund in exchange for passengers signing a waiver releasing the carrier from legal liability.

Microsoft fired back in earlier in the week alleging the airline ignored its offer of help in the fallout of the outage caused by a software update error. Crowdstrike similarly claimed that Delta had failed to respond ot its offers for help.

Attorneys for Microsoft have suggested Delta has not modernized its IT infrastructure like its competitors, contributing to the calamity.

The U.S. Department of Transportation is investigating Delta's response to the outage.