IT Outage to Cost Delta $500 Million, CEO Tells CNBC

Delta Air Lines CEO Ed Bastian announced that the recent extensive IT outage, which affected thousands of passengers, is projected to cost the airline $500 million. The disruption was caused by a problematic software update from a cybersecurity vendor, resulting in over 4,000 flight cancellations and significant interference with Microsoft systems worldwide.

While several airlines managed to recover quickly from similar issues, Delta’s ongoing disruptions and customer service responses have led to an investigation by the U.S. Department of Transportation. In a statement made from Paris on CNBC’s “Squawk Box,” Bastian expressed that the airline intends to seek compensation for the fallout, stating, “We have no choice.”

The flight disruptions are uncommon for Delta, noted for its reliability and high rankings in profitability and punctuality among U.S. airlines. According to reports, Delta and its regional partners accounted for approximately two-thirds of all flight cancellations worldwide, totaling over 6,000 canceled flights.

U.S. Transportation Secretary Pete Buttigieg raised concerns about the delays, questioning why Delta continued to cancel flights days after other airlines had returned to normal operations. A spokesperson for Delta emphasized the airline’s commitment to restoring service after the software update caused significant issues for their IT infrastructure.

The representative noted the extensive reliance on Windows-based technology across the airline’s operations, including essential scheduling systems for pilots and flight attendants.

As of July 25, normal operations have resumed, and Delta is providing refunds to customers impacted by the travel disruptions.