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Delta rejects CrowdStrike criticism, sees $500 mln hit from cyber outage
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Delta rejects CrowdStrike criticism, sees $500 mln hit from cyber outage
Aug 8, 2024 1:39 PM

CHICAGO/WASHINGTON Aug 8 (Reuters) -

Delta Air Lines ( DAL ) said on Thursday it is pursuing

legal claims against CrowdStrike ( CRWD ) and Microsoft ( MSFT )

after

a global outage

last month disrupted travel plans of 1.3 million customers

and associated costs of at least $500 million.

A software update last month by global cybersecurity

firm CrowdStrike ( CRWD ) triggered system problems for Microsoft ( MSFT )

customers, including many airlines. The disruptions persisted at

Delta even as they subsided the next day at other major U.S.

carriers.

The Atlanta-based carrier canceled about 7,000 flights over

five days. It also faces an investigation from the U.S.

Transportation Department for the disruptions.

"An operational disruption of this length and magnitude is

unacceptable, and our customers and employees deserve better,"

Delta's CEO Ed Bastian said in an SEC filing on Thursday.

Both CrowdStrike ( CRWD ) and Microsoft ( MSFT ) have rejected Delta's

claim that they should be blamed for flight disruptions.

On Sunday,

CrowdStrike ( CRWD ) said it was

"highly disappointed by Delta's suggestion that CrowdStrike ( CRWD )

acted inappropriately and strongly rejects any allegation that

it was grossly negligent or committed misconduct."

But in a letter to CrowdStrike ( CRWD ), David Boies, who is

representing Delta, said the airline was "surprised and

disappointed by CrowdStrike's ( CRWD ) decision to try a 'blame

the victim' defense."

"There is no basis -- none -- to suggest that Delta was

in any way responsible for the faulty software that crashed

systems around the world, including Delta's," Boies wrote.

CrowdStrike ( CRWD ) did not immediately respond to a request for

comment.

Delta said direct revenue impact of the incident in the

current quarter is estimated to be $380 million, primarily

driven by refunding customers for canceled flights and providing

customer compensation in cash and frequent flyer miles.

The company also said it has additional expenses of $170

million associated with the technology-driven outage and

subsequent operational recovery, primarily due to customer

expense reimbursements and crew-related costs, but will have $50

million in lower fuel costs because of the flight cancellations.

Delta told U.S. lawmakers that CrowdStrike's ( CRWD ) faulty

update "impacted more than half of Delta computers, including

many of Delta's workstations at every airport in the Delta

network."

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