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Delta Air Lines lost an estimated $350 to $500 million from the IT outage initially caused by CrowdStrike. The outage started on July 19th and by the weekend most airlines were back to normal operations. Delta continued to suffer for days and left millions of passengers without flights. Now, the airline has retained high profile counsel and is seeking damages.
CNBC reports that Delta has hired attorney David Boies. He’s the chairman of Boies Schiller Flexner and is known for his handling of high-profile cases. Boies is known for representing the US government in its antitrust case against Microsoft, for representing Al Gore in 2000, for helping overturn California’s ban on gay marriage, for representing Harvey Weinstein (the imprisoned former Hollywood mogul), and Theranos founder, Elizabeth Holmes (who is also in prison for defrauding investors).
Delta is handling over 176,000 refund and reimbursement requests after almost 7,000 flights were canceled. The airline wants to pass some of this blame and is going to see what Microsoft and CrowdStrike will offer. No suit has been filed, but it’s thought that if negotiations are not around what Delta wants that it will. The estimated damages to all Fortune 500 companies impacted by the outage is around $5.4 billion according to cloud monitoring company, Parametrix’ analysis.
Anthony’s Take: Last week was catastrophic for Delta. While the airline will certainly recover, the damage to its reputation will take some time. We’ll have to wait and see if Delta gets Microsoft and CrowdStrike to cough up some cash.
(Featured Image Credit: Delta Air Lines.)
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2 comments
Delta can try to get something out of them, but limits of liability clauses in those software contracts are not very lucrative. Usually 1-2x annual spend and even with great negotiating they might get 10x annual spend. That’s not going to even come close to damages incurred.
Not true that is based on normal use of the software. If the company is found negligent from performing their normal duties the. No holds barred. From the understanding is the company neglected to inform the companies in the normal alloyed times done previously before that an update was coming. Giving the companies the same amount of time to get their systems ready for the upgrade. This upgrade was done without warning of like previous upgrades. Making the negligent .