Delta CEO lashes out at CrowdStrike: This cost us $500 million and they offered us nothing
By Chris Isidore, CNN
New York (CNN) — The CEO of Delta Air Lines lashed out at cyber security firm CrowdStrike and software provider Microsoft for the computer problems that resulted in a five-day service meltdown he said cost the airline $500 million.
“They haven’t offered us anything. Free consulting advice to help us,” said Ed Bastian in an interview Wednesday on CNBC, when asked about how much compensation CrowdStrike and Microsoft have offered the company. And he blasted CrowdStrike for the flawed software update at Delta and hundreds of other companies around the globe that caused widespread computer outages on July 19.
“If you’re going to have priority access to the Delta ecosystem in terms of technology, you’ve got to test this stuff,” Bastian said. “You can’t come into a mission critical 24/7 operation and tell us we have a bug. It doesn’t work.”
The computer problems at Delta knocked its crucial crew tracking system off line for the better part of a week, making it impossible for the company to find pilots and flight attendants it needed to fly its aircraft. While other airlines were quick to resume normal operations after the CrowdStrike outage, Delta was forced to cancel about 30% of its schedule over five days, leaving an estimated half-million passengers stranded. It took many days after that to re-book affected passengers on other flights and return their checked bags.
Delta has yet to file a lawsuit against either CrowdStrike or Microsoft, but a person familiar with its actions confirmed to CNN on Tuesday that it had hired the law firm of high-profile attorney David Boies to pursue compensation from the two companies. Microsoft did not respond to a request for comment on Wednesday. A CrowdStrike spokesperson would only say, “We are aware of the reporting, but have no knowledge of a lawsuit and have no further comment.”
“We have no choice,” Bastian told CNBC. “We have to protect our shareholders, we have to protect our customers (and) our employees for the damage, not just the cost but the reputational damage.”
He said beyond the lost revenue from having to cancel about 6,300 flights in the five days, the company paid tens of millions a day in compensation to customers for hotels and other out-of-pocket expenses.
When it was suggested that $500 million in compensation could put a company like CrowdStrike out of business, Bastian replied, “We’re not looking to wipe them out, but we’re looking to see we get compensated.”
A CrowdStrike spokesperson said that the company ended its most recent quarter with $3.7 billion in cash on its balance sheet. The company also has a $750 million revolving credit line, as well as insurance policies which are intended to mitigate the potential impact of any legal claims.
Bastian gave the interview to CNBC from Paris, which he traveled to a week ago to attend the Olympics as the airline was returning to a more normal flight schedule. Delta is a sponsor and the official airline of the US Olympic team, and CNBC’s NBC parent has the US broadcast rights to the games.
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