Key Takeaways
- DAL (Delta Air Lines) hires an attorney to pursue compensation from CRWD (CrowdStrike) and MSFT (Microsoft).
- The outage cost Delta an estimated $350 million to $500 million.
- CrowdStrike shares continue their fall on news.
Delta’s Legal Pursuit
DAL (Delta Air Lines) has taken a decisive step by hiring attorney David Boies, chairman of Boies Schiller Flexner, to seek damages from CrowdStrike and Microsoft. The decision comes after a software update from CrowdStrike triggered a historic outage of Microsoft systems, leading to widespread disruptions across various sectors. The airline industry was particularly affected, with Delta experiencing extensive flight cancellations and service failures.
The Department of Transportation has already announced an investigation into Delta’s handling of the situation. Although no lawsuit has been filed yet, Delta is preparing to seek compensation for the substantial financial losses incurred. The outages led to nearly 7,000 flight cancellations and over 176,000 refund or reimbursement requests, costing the airline between $350 million and $500 million.
Broader Implications and Market Impact
David Boies, known for his role in the U.S. government’s landmark antitrust case against Microsoft and other high-profile cases, brings significant legal clout to Delta’s efforts. His involvement underscores the serious financial and operational damages Delta sustained due to the outage. As the airline prepares to seek compensation, the case will likely draw significant attention to the vulnerabilities in current software and cybersecurity practices.
The concern for CrowdStrike now is how many other businesses will pursue compensation for this event. After all, this incident not only impacted Delta but also had broader economic repercussions. Insurance startup Parametrix estimated that the CrowdStrike-related outage resulted in a total loss of $5.4 billion for Fortune 500 companies, excluding the losses faced by Microsoft. CrowdStrike’s shares are now down over 43% from their early July highs.
