Delta Air Says System Outage Will Cost The Carrier $500 Million
Delta Air Lines Inc. said it expects a $500 million impact from the technology breakdown this month that led the carrier to cancel thousands of flights.
(Bloomberg) -- Delta Air Lines Inc. said it expects a $500 million impact from the technology breakdown this month that led the carrier to cancel thousands of flights.
The company revealed the financial assessment Wednesday in a statement to Bloomberg, confirming a report from CNBC. Delta plans to seek damages from the disruption, Chief Executive Officer Ed Bastian told CNBC.
The figure, in line with Wall Street’s expectations, highlights the costly impact from the outage that upended Delta’s operations for days, left passengers stranded and prompted a federal investigation of the carrier. Analysts at Citigroup already reduced estimates for Delta’s earnings before interest and taxes in the current quarter by about $500 million.
An errant software update from CrowdStrike Holdings Inc. earlier this month led to widespread outages of Microsoft Corp. systems, disrupting industries across the globe. While many airlines were able to recover fairly quickly, Delta’s cancellations extended into the middle of the following week.
Delta’s shares rose 1.1% as of 8:03 a.m. before regular trading in New York. CrowdStrike shares were little changed.
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