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Delta and Frontier Airlines want tech companies to cover losses
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Delta and Frontier Airlines want tech companies to cover losses

Both Delta Air Lines and Frontier said they would seek compensation from CrowdStrike and Microsoft for the July 19 air traffic disruption.

Delta said in a statement filed Thursday that it lost about $550 million as a result of the incident, including a $380 million loss in revenue and $170 million in costs. In addition, Delta’s lawyer wrote a letter to CrowdStrike’s lawyer saying the company’s offers of assistance were both late and worthless.

Crowdsource, a cybersecurity firm, responded Thursday by saying that “Delta continues to spread a misleading narrative.” It said it moved quickly to help Delta.

Meanwhile, CEO Barry Biffle said on Frontier’s quarterly earnings call Thursday that the airline lost $20 million in July due to technology outages. The day before the CrowdStrike accident, he said, a Microsoft outage starting at 4 p.m. hit sales and caused several hundred flights to be canceled. “We’re still sorting out what part of the $20 million went to whom,” he said. Asked by an analyst whether Frontier would seek reimbursement, he said, “We don’t talk about that sort of thing yet, but you can expect we’ll try to get every penny back.”

A CrowdStrike spokesperson said: “We have not received any contact from Frontier Airlines and they are not a CrowdStrike customer.”

In the letter to CrowdStrike’s attorney, Delta attorney David Boies said the impact of CrowdStrike’s faulty content update on the airline resulted in more than 37,000 computers being shut down and travel being disrupted for more than 1.3 million Delta customers. The airline has canceled about 5,500 flights.

Earlier this week, Boies received letters from lawyers representing Microsoft and CrowdStrike. Both letters said the companies offered Delta help and were rebuffed. Delta was asked to back off from the accusation that the companies were responsible for the cancellations. Delta CEO Ed Bastian has estimated the cost of cancellations and related expenses at $500 million.

Boies wrote that Delta employees were hampered in their efforts to repair the damage “by CrowdStrike’s failure to promptly provide an automated resolution or the information necessary to conduct those efforts.”

“CrowdStrike’s offers of assistance during the first 65 hours of the outage simply directed Delta to CrowdStrike’s publicly available troubleshooting website, which instructed Delta to manually reboot each affected machine,” Boies said. Later, “the only offer of assistance made by CrowdStrike CEO George Kurtz to Ed Bastian on the evening of Monday, July 22, was unhelpful and ill-timed. By the time it was made – nearly four days after the CrowdStrike disaster began – Delta had already recovered its critical systems and most other machines.”

Boies said Delta relies heavily on CrowdStrike and Microsoft. “Approximately 60 percent of Delta’s mission-critical applications and associated data – including Delta’s redundant backup systems – depend on the Microsoft Windows operating system and CrowdStrike.” One consequence of this is that thousands of crew members have to be diverted from their scheduled deployment locations, he said.

CrowdStrike gave a different version of events in its statement, saying that Kurtz called a board member and Delta’s CISO within hours of the incident and “offered information and assistance. The CrowdStrike and Delta teams worked closely together within hours of the incident, with CrowdStrike providing technical support beyond what was available on the website,” it said.

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