As we all know, Delta faced an absolutely massive meltdown in the past couple of weeks, whereby nearly 7,000 flights were canceled, and even more flights were significantly delayed. While the issue arose due to IT outages with Microsoft and CrowdStrike, ultimately the scale of the meltdown came down to Delta’s crew scheduling software being unable to cope, and breaking down.
Along those lines, there’s an interesting update when it comes to action that Delta is taking to minimize its losses from this event…
Delta seeking damages from CrowdStrike & Microsoft
CNBC reports that Delta has hired attorney David Boies, Chairman of Boies Schiller Flexner, to seek damages from both CrowdStrike and Microsoft. The outages reportedly cost Delta somewhere around $350 to $500 million, and the airline clearly wants to recoup as much of that as possible.
Delta isn’t just hiring any attorney, though. Boises is a prominent attorney who represented the US government in its antitrust case against Microsoft, and who helped with a decision that overturned California’s ban on gay marriage. He has also represented some questionable individuals, like Harvey Weinstein and Elizabeth Holmes.
As you’d expect, CrowdStrike’s stock has plummeted in the past couple of weeks, and in particular this week, when it was announced that Delta plans to pursue compensation from the company.
You can’t blame Delta for trying, but…
Ultimately Delta’s operation was sent into a spiral for something that was initially outside of its control. However, the extent of the meltdown came down to Delta’s lack of investment in its crew scheduling software, since other airlines weren’t impacted to the same extent.
This case should set an interesting precedent, and I’m curious to see how it plays out (to the extent that terms are disclosed). To what degree should a company like CrowdStrike be on the hook for the domino effect caused by a bad software update? Should the company owe compensation for the initial meltdown, or should it also be responsible for everything else that melted down because of the initial issue?
For that matter, so many companies had issues as a result of this, so to what extent can a cybersecurity company that’s so widely used be expected to make companies whole? It sort of upends the business model, when you consider the risk…
While I don’t in any way blame Delta for trying to pursue compensation (and even think that’s smart and fair), what I find frustrating is the extent to which the airline has tried to publicly shift blame, even for issues resulting from the company’s crew scheduling software.
Having a meltdown is one thing, but the lack of humility and accountability is what many Delta loyalists have found to be most frustrating. For example, the airline didn’t even want to provide refunds of tickets on other airlines until it was strong-armed into it, despite constantly claiming it can command a premium thanks to its operational reliability.
Bottom line
Delta is pursuing compensation from both CrowdStrike and Microsoft, following the recent meltdown that caused roughly 7,000 flight cancelations, and is expected to cost the airline up to $500 million. Delta didn’t just hire any lawyer, though, and I’d say that sends a pretty clear message as to the extent to which the airline is hoping to shift blame (and losses).
How do you see Delta seeking compensation from CrowdStrike and Microsoft playing out?
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