Bastian told CNBC's "Squawk Box" on Wednesday that the carrier would seek damages from the disruptions, adding, "We have no choice."
Delta Air Lines CEO Ed Bastian said the massive IT outage earlier this month that stranded thousands of customers will cost it $500 million.
The airline canceled more than 4,000 flights in the wake of the outage, which was caused by a botched CrowdStrike software update and took thousands of Microsoft systems around the world offline.
Bastian, speaking from Paris, told CNBC’s “Squawk Box” on Wednesday that the carrier would seek damages from the disruptions, adding, “We have no choice.”
Bastian said the figure includes not just lost revenue but “the tens of millions of dollars per day in compensation and hotels” over a period of five days. The amount is roughly in line with analysts’ estimates. Delta didn’t disclose how many customers were affected or how many canceled their flights.
It's important to note that the DOT recently clarified a rule that reinforced that if an airline cancels a flight, they have to compensate the customer. So that's the real reason why Delta had to spend so much, they couldn't ignore their customers and had to pay out for their inconvenience.
So think about how much worse it might have been for fliers if a more industry-friendly Transportation Secretary were in charge. The airlines might not have had to pay out nearly as much to stranded customers, and we'd be hearing about how stranded fliers got nothing at all.
Pretty sure their software’s legal agreement, and the corresponding enterprise legal agreement, already cover this.
The update was the first domino, but the real issue was the disarray of Delta’s IT Operations and their inability to adequately recover in a timely fashion. Sounds like a customer skimping on their lifecycle and capacity planning so that Ed can get just a bit bigger bonus for meeting his budget numbers.
Don't worry everyone... Each and everyone of the CEOs involved in this debacle will earn millions this year and next and will eventually retire with more money they could possible spend in 10 lifetimes
If anything, they'll continue to fall upwards completely deserving even more money
Yeah... Maybe don't put all your IT eggs in one basket next time.
Delta is the one that chose to use Crowdstrike on so many critical systems therefore the fault still lies with Delta.
Every big company thinks that when they outsource a solution or buy software they're getting out of some responsibility. They're not. When that 3rd party causes a critical failure the proverbial finger still points at the company that chose to use the 3rd party.
The shareholders of Delta should hold this guy responsible for this failure. They shouldn't let him get away with blaming Crowdstrike.
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