Delta Air Lines has enlisted renowned attorney David Boies to pursue compensation from cybersecurity firm CrowdStrike and tech giant Microsoft following a software update failure that led to significant operational disruptions.
The incident, which occurred earlier this month, resulted in a six-day meltdown, stranding millions of passengers and causing thousands of flight cancellations.
Delta, the most profitable airline in the United States, attributes the chaos to a faulty CrowdStrike security update that affected its outdated crew scheduling technology. Despite other airlines experiencing similar issues and recovering quickly, Delta's recovery was prolonged, leading to an estimated financial impact of $350-$500 million. This figure includes costs related to compensation, rebooking, and lost profits.
David Boies, a high-profile attorney known for representing Al Gore in the 2000 Bush v. Gore case and the U.S. government in its antitrust case against Microsoft, has been hired to lead Delta's legal efforts. Boies' firm, Boies Schiller Flexner LLP, will evaluate claims against CrowdStrike and Microsoft. The news of Boies' involvement, first reported by CNBC, caused CrowdStrike's shares to drop by 5%.
The problematic software update, deployed on July 18, caused widespread outages in Microsoft systems, impacting businesses globally. While many organizations recovered within hours, Delta struggled to restore its crucial crew-tracking software. This led to the cancellation of 6,300 flights across its mainline operations and its Endeavor Air feeder airline, representing about 30% of its schedule. Additionally, 9,300 flights were delayed, affecting more than two-thirds of its operations over five days.
Delta has taken steps to mitigate passenger inconvenience by offering cash refunds, compensating for alternative travel arrangements, and increasing crew pay for the affected week. Despite these measures, the airline maintains that it is an innocent party, emphasizing that it was significantly more affected than other airlines due to its reliance on outdated technology.
The U.S. Department of Transportation has opened an investigation into Delta's handling of the incident. Analysts estimate that the collective damage to Fortune 500 companies, excluding Microsoft, could be as high as $5.4 billion.
Boies' involvement in this case could lead to significant legal precedents regarding proximate cause and negligence. The situation underscores the risks associated with relying on outdated technology and the importance of robust contingency planning in an era of increasing cybersecurity threats.
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