Delta Airlines CEO Blames Microsoft and CrowdStrike for $500 Million Outage

Delta Air Lines Faces Major Losses After IT Outage

In a recent interview with CNBC, Delta Air Lines CEO Ed Bastian revealed that the airline faced significant financial repercussions due to a major IT outage caused by an update from CrowdStrike. The incident, which occurred on July 19, resulted in Delta incurring losses estimated at half a billion dollars over just five days.

Impact of the Outage

The technical difficulties led to the cancellation of over 5,000 flights during that weekend, leaving many travelers stranded. Bastian disclosed that the blue error screens were still visible in numerous airports days after the initial crash, highlighting the extent of the disruption. The company had to manually reset more than 40,000 servers and compensate affected passengers, adding to the financial burden.

Concerns Over Partnerships

When questioned about Delta's ongoing relationship with Microsoft following the incident, Bastian expressed his concerns, describing the platform as "probably the most fragile." He juxtaposed Microsoft's relationship with third-party developers to that of Apple, questioning the reliability of the software services provided by both tech giants. Bastian's remarks reflect a growing worry about the resilience of major tech companies amidst increasing generative AI hype and their operational commitments.

CrowdStrike Under Fire

Delta's situation is compounded by legal actions initiated by CrowdStrike shareholders. A proposed class-action lawsuit against CrowdStrike cites the CEO George Kurtz’s earlier claims that the software was "validated, tested, and certified"—assertions that shareholders now deem misleading. They argue that CrowdStrike did not apply the same rigorous testing standards to its Rapid Response Content updates, failing to catch the bug that precipitated the crisis.

Regulatory Landscape and Compliance Issues

In the aftermath of the outage, a Microsoft spokesperson addressed the Wall Street Journal, explaining the company's inability to restrict third-party access to its operating systems as Apple does. This is a result of a prior agreement with the European Commission regarding competitive practices. The European Commission, however, maintains that Microsoft retains the freedom to adapt its business model to address security threats as per EU competition law standards.

Call for Improved Testing Protocols

Bastian's frustrations regarding both the original flaw and CrowdStrike's deployment procedures were evident. He emphasized that any partner given priority access to Delta's ecosystem must adhere to rigorous testing protocols. He stated, "If you’re going to have priority access to the Delta ecosystem...you’ve gotta test this stuff. You can’t come into a mission-critical, 24-7 operation and tell us, ‘We have a bug.’ It doesn’t work." This emphasizes the critical need for companies to ensure robust testing and validation processes, particularly in mission-critical environments.

Conclusion

This incident has raised significant eyebrows about the reliance on tech partnerships in today's digital age. As Delta navigates the aftermath of this costly outage, it also calls into question the extent to which tech companies can guarantee the reliability of their services, particularly as they adapt to emerging technologies and market demands.