CrowdStrike Denies Responsibility for Delta's July Flight Cancellations

Delta’s Flight Cancellations and Financial Impact

CrowdStrike Denies Responsibility for Delta’s July Flight Cancellations after a major IT outage led to extensive disruptions. The outage, which occurred between July 19 and July 25, was attributed to a problematic software update and resulted in the cancellation of over 5,000 flights. Delta CEO Ed Bastian disclosed that the incident cost the airline approximately $500 million, including expenses related to customer compensation. In light of these financial losses, Delta has expressed its intention to seek damages and has engaged the law firm Boies Schiller Flexner to pursue legal claims against CrowdStrike and Microsoft.

CrowdStrike’s Response and Allegations

In response to Delta’s threats of litigation, CrowdStrike has asserted that it is not liable for the disruption. Michael Carlinsky, a lawyer representing CrowdStrike, criticized Delta’s claims as misleading. Carlinsky revealed that CrowdStrike CEO George Kurtz had offered onsite assistance to Delta during the outage but received no acknowledgment or response. According to Carlinsky, CrowdStrike’s transparency and readiness to assist was not reciprocated by Delta, which failed to respond to the offer of help.

Carlinsky’s correspondence also highlighted that Delta’s legal threats created a misleading narrative regarding CrowdStrike’s role in the incident. He pointed out that Delta’s own IT infrastructure and its handling of similar outages in the past would come under scrutiny if legal proceedings were to advance. CrowdStrike’s contractual liabilities are reportedly limited to a few million dollars, contrasting with the substantial financial impact reported by Delta.

Ongoing Developments and Shareholder Concerns

Following the July outage, CrowdStrike Denies Responsibility for Delta’s July Flight Cancellations, but the incident has still impacted the company, leading to a more than 36% drop in its stock value. The incident has impacted a range of industries, from banking to healthcare, that rely on CrowdStrike’s software. In response to the outage, CrowdStrike has pledged to implement phased software updates in the future to prevent similar issues.

In addition to the legal threats from Delta, CrowdStrike is facing a lawsuit from its shareholders seeking compensation for the decline in their investments. The company is set to report its fiscal second-quarter results on August 28. As of now, Microsoft has not commented on the situation.