CrowdStrike strikes back over Delta Air Lines’ $500 million claim

Published Aug 5 Updated Aug 5

Simone Del Rosario Business Correspondent

By Simone Del Rosario (Business Correspondent), Brent Jabbour (Senior Producer), Emma Stoltzfus (Editor)

Cybersecurity firm CrowdStrike on Sunday, Aug. 4, shot down Delta Air Lines’ claim that it should be financially responsible for a global outage that stranded half a million of its passengers in mid-July. The response comes after Delta hired high-powered attorney David Boies’ law firm looking for compensation from both Microsoft and CrowdStrike.

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In a letter reported by Reuters and others, an attorney for CrowdStrike said it is “highly disappointed by Delta’s suggestion that CrowdStrike acted inappropriately and strongly rejects any allegation that it was grossly negligent or committed misconduct.”

The global outage, caused by a faulty update, forced Delta to cancel 6,000 flights over six days, which stranded more than half a million passengers.

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“We got hit the hardest with recovery capabilities,” Delta CEO Ed Bastian told CNBC on July 31. “People don’t realize Microsoft and CrowdStrike are the top two competitors around [cybersecurity] with each other. So they don’t necessarily partner [at] the same level that we need them to. So I think this is a call to the industry.”

CrowdStrike’s attorney said if Delta moves forward with a lawsuit, it “will have to explain to the public, its shareholders and ultimately a jury why CrowdStrike took responsibility for its actions — swiftly, transparently and constructively — while Delta did not.”

“We have to protect our shareholders, we have to protect our customers, our employees, for the damage,” Bastian told CNBC. “Not just for the cost, but the brand, the reputational damage and the physical challenges.”

“But we’re looking to make certain that we get compensated for what they cost us,” Bastian said. “Half a billion dollars in five days.”

For its part, CrowdStrike said its contracts limit compensation for these types of situations to the “single-digit millions.”

CrowdStrike also said its CEO personally reached out to Bastian to offer onsite assistance “but received no response.” The attorney said Delta will need to answer why they didn’t accept that help.

Bastian told CNBC all they offered was “free consulting advice” to assist with the issues.

Delta said the company spent tens of millions of dollars per day in compensation and hotels to travelers. The Department of Transportation opened an investigation into why Delta took so much longer than other airlines to get up and running.

Tags: Airlines, CrowdStrike, Cybersecurity, Cybersecurity and Infrastructure Security Agency, Delta Air Lines, Infrastructure, Microsoft

Simone Del Rosario:

Who’s more to blame for Delta stranding half a million passengers during the CrowdStrike outage a couple of weeks ago? CrowdStrike or Delta?

The answer is worth half a billion dollars.

CrowdStrike is striking back at Delta’s claim the cybersecurity company is financially responsible for the airline’s outsized downfall during the July 19th outage.

In a letter reported by Reuters, CrowdStrike’s lawyer said it is “highly disappointed by Delta’s suggestion that CrowdStrike acted inappropriately and strongly rejects any allegation that it was grossly negligent or committed misconduct.”

The letter came after Delta lawyered up with a high-powered attorney to seek damages from CrowdStrike after having to cancel more than 6,000 flights in six days.

CrowdStrike’s attorney says if Delta moves forward with a lawsuit, it “will have to explain to the public, its shareholders and ultimately a jury why CrowdStrike took responsibility for its actions — swiftly, transparently and constructively — while Delta did not.”

Ed Bastian:

“Well, we’re not looking to wipe them out. But we’re looking to make certain that we get compensated for what they cost us. Half a billion dollars in 5 days.”

“So we have to protect our shareholders, we have to protect our customers, our employees for the damage. Not just for the cost, but the brand, the reputational damage and the physical challenges.”

Simone Del Rosario:

Crowdstrike says their contracts cap compensation for these situations in the “single-digit millions.” A far cry from the half a billion dollars Delta says it lost.

The cybersecurity company says its CEO personally reached out to Delta CEO Ed Bastian to offer onsite assistance “but received no response.” CrowdStrike’s attorney says Delta will also need to answer for why it didn’t accept that help.

Ed Bastian:
“They haven’t offered anything. Free consulting advice to help us.”

“We thought we had the best between Microsoft and Crowdstrike. In fact they’re integrated, that’s what caused a lot of the slowdown. Because it was hard to decouple them to unencrypt. We had 40,000 servers we had to physically touch and reset.”

Simone Del Rosario:

Delta says the company spent tens of millions per day in compensation and hotels to travelers. The Department of Transportation opened an investigation into why Delta took so much longer than other airlines to get up and running.

For Straight Arrow News, I’m Simone Del Rosario