*

Delta says faulty update resulted in 7,000 flight

cancellations,

impacting 1.3 million passengers

*

CrowdStrike ( CRWD ) rejects Delta lawsuit, blames airline's IT

*

Delta disruption under investigation by USDOT

(Adds CrowdStrike statement in paragraph 4)

By David Shepardson

WASHINGTON, Oct 25 (Reuters) - Delta Air Lines ( DAL )

on Friday sued cybersecurity firm CrowdStrike ( CRWD ) in a

Georgia state court after a global outage in July caused mass

flight cancellations, disrupted travel plans of 1.3 million

customers and cost the carrier more than $500 million.

Delta's lawsuit filed in Fulton County Superior Court called

the faulty software update from CrowdStrike ( CRWD ) "catastrophic" and

said the firm "forced untested and faulty updates to its

customers, causing more than 8.5 million Microsoft

Windows-based computers around the world to crash."

The July 19 incident led to worldwide flight cancellations

and hit industries around the globe including banks, health

care, media companies and hotel chains.

"Delta's claims are based on disproven misinformation,

demonstrate a lack of understanding of how modern cybersecurity

works, and reflect a desperate attempt to shift blame for its

slow recovery away from its failure to modernize its antiquated

IT infrastructure," CrowdStrike ( CRWD ) said late on Friday.

Delta, which said it has purchased CrowdStrike ( CRWD ) products

since 2022, said the outage forced it to cancel 7,000 flights,

impacting 1.3 million passengers over five days.

Delta said CrowdStrike ( CRWD ) is liable for over $500 million in

out-of-pocket losses as well as for an unspecified amount of

lost profits, expenditures, including attorneys' fees and

"reputational harm and future revenue loss."

The incident prompted the U.S. Transportation Department to

open an investigation.

"If CrowdStrike ( CRWD ) had tested the faulty update on even one

computer before deployment, the computer would have crashed,"

Delta's lawsuit says. "Because the faulty update could not

be removed remotely, CrowdStrike ( CRWD ) crippled Delta's business and

created immense delays for Delta customers."

Delta said that as part of its IT-planning and

infrastructure, it has invested billions of dollars "in

licensing and building some of the best technology solutions in

the airline industry." CrowdStrike ( CRWD ) has questioned why Delta

fared so much worse than other airlines and said it has minimal

liability, something Delta rejected.

Last month, a senior executive at CrowdStrike ( CRWD ) apologized

before Congress for the faulty software update.

Adam Meyers, a senior vice president at CrowdStrike ( CRWD ), said

the company released a content configuration update for its

Falcon Sensor security software that resulted in system crashes

worldwide. "We are deeply sorry this happened and we are

determined to prevent this from happening again," Meyers said.