CrowdStrike Faces Criticism From Delta Air Lines For Massive Outage

Delta Air Lines faced a massive outage last month that resulted in thousands of flight cancellations, costing the company about $500 million, including customer compensation. Despite the severity of the situation, Delta CEO Ed Bastian revealed that the airline had rejected onsite help from CrowdStrike, a cybersecurity company.

Delta informed CrowdStrike and Microsoft that they were planning to pursue legal claims to recover their losses from the outage. In response, CrowdStrike’s lawyer, Michael Carlinsky, expressed concern over the airline’s litigation threats. Carlinsky stated that CrowdStrike had offered onsite assistance to Delta, but received no response. He criticized Delta for contributing to a misleading narrative that blamed CrowdStrike for the IT decisions and response to the outage.

Following a botched software update on July 19, Delta canceled more than 5,000 flights through July 25, costing the company more than its rivals in the industry. The outage affected millions of computers running CrowdStrike’s software, causing the company’s shares to plummet by over 36%.

Delta’s decision to seek damages from CrowdStrike could lead to legal battles involving explanations to the public, shareholders, and potentially a jury. CrowdStrike emphasized that Delta would need to preserve various documents related to its IT infrastructure, business continuity plans, and past handling of outages. Despite CrowdStrike’s contractual liability being limited to a few million dollars, Delta’s pursuit of legal action remains uncertain.

CrowdStrike expressed hope for a cooperative resolution with Delta and reiterated its commitment to releasing software updates in stages to prevent similar incidents in the future. Delta CEO Ed Bastian defended the airline’s response to the outage, emphasizing the importance of rigorous testing in mission-critical operations.

On July 30, CrowdStrike shareholders filed a lawsuit against the company in a Texas federal court, seeking damages for declines in their investments. CrowdStrike is set to report its fiscal second-quarter results on August 28, amidst ongoing challenges stemming from the outage and legal disputes with Delta Air Lines.