The CrowdStrike fiasco wiped out $380 million of Delta revenue. Was it even worse than feared?
The six major airlines were expected to log a loss totalling $860 million due to the outage.
The CrowdStrike outage cost Delta Air Lines $380 million in direct revenue loss for the three months that ended in September, according to Delta’s latest earnings report.
Earlier, insurer Parametrix estimated that Fortune 500 companies would suffer from a total financial loss of $5.4 billion from the outage. The airline industry was projected to be one of the most heavily impacted industries, with the six major airlines expected to log a $860 million loss. If that aligns with the actual number, Delta’s $380 million shortfall would account for almost half of the entire airline industry’s loss and around 7% of all Fortune 500 companies’ losses.
Delta was the most affected airline after the global IT outage in July, which hit about 8.5 million devices. The company was forced to cancel 7,000 flights over five days, according to its filings. Delta struggled even after rivals picked up normal operations; in comparison, United reportedly canceled 1,500 flights over a four-day period following the onset of the outage.
During an earnings call before market open on Thursday, Delta blamed the outage for a 45-cent dip in earnings per share, which came in at $1.50 per share, less than analysts’ expectations. Revenue was also short of Wall Street estimates.
Most of the revenue loss was driven by refunds and customer compensations. Reimbursement and crew expenses amounted to $170 million, or nearly half of the losses. CEO Ed Bastian told CNBC that Delta was seeking compensation from CrowdStrike and Microsoft.
Shares of Delta fell 3.7% immediately after market open on Thursday and gradually bounced back during intraday trading, though it was still 1.3% down in early afternoon. CrowdStrike stock was up 3.3% as of 1:30 p.m. ET on Thursday.
