Delta Debacle: Tech Meltdown Could Cost Airline $500 Million

A tech meltdown earlier this month that impacted banks, health care facilities, emergency services, and other industries also hit airlines hard across the globe. A malfunction of cyber security firm CrowdStrike led to thousands of canceled and delayed flights on July 19 that made international headlines. But while most companies were back online that day or over the weekend, Delta Air Lines continued to struggle with the glitch, canceling an estimated 5,500 flights and leaving 500,000 passengers stranded in airports and cities well into the following week. Delta CEO Ed Bastian spoke about the debacle today in an interview from Paris, where he is attending the Olympics, saying the outage will end up costing the airline more than $500 million. With a Delta hub in Minnesota at Minneapolis-St. Paul International Airport , we asked local travel expert and Thrifty Traveler Executive Editor Kyle Potter for his thoughts on the debacle earlier this week.

KP: First and foremost, I just want to put into context, canceling 5,500 flights over five days is catastrophically bad. This was Delta’s biggest collapse in years—if ever. And to put that in perspective, Delta canceled more flights during this meltdown than the number of flights they canceled in 2018 and 2019 combined.

That says two things: Canceling that many flights is never good; it’s a sign that something has gone terribly wrong. But, second, this is Delta. This is an airline that has prided itself on being reliable and getting people to where they need to go on time—if not early. Travelers, particularly in Minneapolis, pay a little to a lot more for that reliability. Some people who are loyal to Delta to a fault, this looks really bad.

Is it all CrowdStrike’s fault? Are there any other explanations?

KP: Delta says this is all a CrowdStrike outage—and a CrowdStrike problem alone. But that does not pass the smell test. Case in point—by last Monday, every airline in the country was operating more or less as normal. But Delta was still canceling more than 1,000 flights that day. The CrowdStrike outage certainly set this into motion, but what happened was it really bent, and then broke, some of its own technology.

Delta will have to disclose to investors how big of a financial hit it is anticipating as a result of this. It has to file something with the FCC. And based on how it’s worked with other airlines that have also failed so spectacularly in the past, I would expect that soon.

You’re referring to Southwest and its 10-day outage in 2022 that canceled 17,000 flights?

KP: That is definitely the parallel. By the numbers, Southwest was several times worse. No question. But, again, this is Delta. This is an airline that has, at one point, literally trademarked the phrase “on-time machine.”

Has Delta indicated how many people were impacted in Minnesota versus other hubs?

KP: Atlanta was the worst. That’s where Delta operates the most flights. There were also some exacerbating tech issues there. But Minneapolis’ outage was pretty significant, especially over the weekend. I will say, I live under one of the main flight paths in Minnesota, and it was some of the quietest days since moving in. It was very, very noticeable.

There is an upside right there.

KP (laughing): Yes, very selfishly, I enjoyed it.

How about people who were impacted? Are there general tips for people who are looking for reimbursement or otherwise?

KP: In terms of direct compensation, Delta is going out of its way to say it’s sorry. Delta has said it’s on a case-by-case basis, but from everything that I’ve seen from travelers who got stuck in this, the standard seems to be somewhere between $100 or $125 vouchers, or 10,000 to 12,500 SkyMiles.

That doesn’t seem like a lot.

KP: It is not a lot. I think, rightfully, it’s striking some people like a slap in the face. But in terms of actual reimbursements—covering people’s costs—there are a few things. If your Delta flight was canceled or significantly delayed, and you chose not to take it, Delta owes you a refund. They can’t just try to stick you with a voucher for the amount of your flight. And then for the extra costs—things like hotels, rental cars, subway and bus costs, extra meals, and most importantly, for those people who were forced into booking a flight on United or American or Southwest, Delta has said they will cover those costs. But they use that phrase “reasonable expenses.” Exactly what is reasonable, what amount is going to get covered and what is not is up in the air, but I tell everybody just bill Delta for every single dime that you can. If you feel like your requests are reasonable and Delta disagrees, keep fighting it. It’s going to take a while for Delta to really make people whole as a result of this, and it’s going to take, unfortunately, a lot of work from the customers themselves.

Have you heard from Delta regulars who refuse to fly with them again?

KP: I haven’t. And here’s the thing, people always say that. It started with Southwest, and certainly Southwest is still hurting a little bit as a result of their meltdown. People also said it with Delta when they overhauled their status program and raised the annual fees on their credit cards. But the reality is that a lot of people are flying Delta today because they are kind of the only game in town. Sure some people can choose to fly Sun Country to Cancun next spring break, or Southwest to Chicago instead of Delta. But for the most part, if you want to go somewhere, and you want to be able to go there not just only on a Tuesday or a Saturday, but on a Monday or Wednesday or Friday, or have several departure times to pick from, Delta just completely dwarfs every other airline at Minneapolis, and it’s not even close.

What do you think we will see in the next six months from Delta to be contrite or otherwise win back people’s trust?

KP: That’s going to be the big thing, and rightfully so. Clearly, another focus will be on blaming CrowdStrike. Delta has repeatedly pointed the finger at CrowdStrike and CrowdStrike alone. They need to first and foremost apologize directly to customers, but also explain how they got it wrong, and how they’re going to make sure this doesn’t happen again.

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