In an exclusive interview with CNBC, Delta Air Lines CEO Ed Bastian revealed the staggering financial impact of the recent global tech outage that disrupted emergency services, communications, and thousands of businesses worldwide. The airline is facing a whopping $500 million in costs, which includes lost revenue, compensation for employees, and hotel expenses for the five-day period.
The tech outage, caused by a bug in an update from cybersecurity company CrowdStrike, grounded flights, took TV broadcasts off the air, and disrupted banks, hospitals, and retailers. Delta was the hardest hit among airlines, with thousands of flights canceled due to the crippling of key systems. The airline’s operations were severely impacted, with flights delayed or canceled, and passengers left stranded at airports.
Bastian emphasized that the $500 million figure represents not only the lost revenue but also the tens of millions of dollars per day in compensation and hotels for the affected employees. “It’s a significant financial impact, and we’re still trying to quantify the full extent of it,” he said. The airline’s financial performance has been severely impacted, with revenue losses and increased costs for employee compensation and accommodations.
The tech outage has also had a significant impact on Delta’s customer service. The airline’s customer service team was overwhelmed with calls and messages from passengers, many of whom were left stranded at airports or facing delays and cancellations. The airline’s social media channels were flooded with complaints and concerns, and the airline’s customer service team struggled to keep up with the volume of requests.
In addition to the financial impact, the tech outage has also had a significant impact on Delta’s reputation. The airline’s brand has taken a hit, with many passengers expressing frustration and disappointment on social media. The airline’s customer service team has been working to address the issues and provide support to affected passengers, but the incident has highlighted the importance of robust cybersecurity measures and disaster recovery plans.
CrowdStrike, the cybersecurity company responsible for the outage, has taken responsibility for the incident and has outlined measures to prevent similar incidents in the future. These measures include staggering the rollout of updates, giving customers more control over when and where updates occur, and providing more details about updates. The company has also offered free consulting advice to Delta and other affected businesses.
However, Delta is seeking damages from CrowdStrike for the financial losses incurred during the outage. “We’re still in discussions with CrowdStrike, and we’re seeking damages for the impact this had on our business,” Bastian said. CrowdStrike has not made any financial offers to help Delta so far.
The U.S. Department of Transportation is investigating the incident, with a focus on why Delta failed to recover as quickly as other airlines. Transportation Secretary Pete Buttigieg has expressed concerns about Delta’s customer service, citing “unacceptable” lines for assistance and reports of stranded unaccompanied minors at airports.
The investigation is also examining Delta’s disaster recovery plan and its ability to respond to disruptions. “We’re looking at the entire incident, from the root cause to the response and recovery,” said Buttigieg. “We want to make sure that airlines are prepared to handle these types of disruptions and that customers are treated fairly and with respect.”
The tech outage has highlighted the importance of robust cybersecurity measures and disaster recovery plans. Airlines, in particular, need to ensure that their systems can quickly recover from disruptions to minimize the impact on operations and customer service.
In the aftermath of the outage, Delta has implemented additional measures to prevent similar incidents in the future. These include enhanced cybersecurity protocols, improved communication with customers, and a review of its disaster recovery plan. The airline has also increased its investment in technology and infrastructure to improve its ability to respond to disruptions.
The incident serves as a wake-up call for businesses of all sizes to prioritize cybersecurity and disaster recovery planning. As Bastian noted, “This is a reminder that even the most robust systems can fail, and we need to be prepared to respond quickly and effectively.”
The tech outage has also highlighted the importance of transparency and communication during disruptions. Delta’s customer service team has been working to keep passengers informed about the status of their flights and the airline’s response to the outage. The airline has also provided regular updates on its social media channels and website.
In conclusion, the global tech outage has had a significant financial impact on Delta Air Lines, with estimated costs of $500 million. The incident highlights the importance of robust cybersecurity measures and disaster recovery plans, and serves as a reminder for businesses to prioritize these critical areas. The airline’s response to the outage has been criticized, but the airline is working to improve its customer service and communication during disruptions. The incident serves as a wake-up call for businesses to prioritize cybersecurity and disaster recovery planning to minimize the impact of disruptions on operations and customer service.