In the wake of a global computer outage, Delta Air Lines has threatened litigation against software company Crowdstrike. Now, Crowdstrike is hitting back.
Crowdstrike Denies Delta Claims
Cybersecurity software company Crowdstrike, whose software caused a massive global computer outage last month, has denied responsibility for the numerous flight cancellations that plagued Delta Air Lines following the outage.
A Week from Hell
The airline had a nightmarish week due to system problems, experiencing thousands of flight cancellations and delays even as other US airlines quickly recuperated and returned to normal.
A Hit to It’s Reputation
Tens of thousands of frustrated, and even stranded, Delta customers clamored to make complaints and request refunds, marring the airline’s previously stellar reputation as a punctual and reliable carrier.
Delta CEO Speaks Out
Last week Delta CEO Ed Bastian publically lashed out at Crowdstrike over the outage and ensuing cancelations, claiming that the software provider offered no help to the airline despite the outage supposedly costing $500 million in losses.
No Offers of Help
“They haven’t offered us anything. Free consulting advice to help us,” Bastien told CNBC in an interview last Wednesday, where he criticized the company for the software update that crashed Delta’s crew tracking system for much of the week.
“It Doesn’t Work”
“If you’re going to have priority access to the Delta ecosystem in terms of technology, you’ve got to test this stuff,” Bastian continued. “You can’t come into a mission-critical 24/7 operation and tell us we have a bug. It doesn’t work.”
Seeking Damages
The CEO then told CNBC that the airline was compelled to seek damages from Crowdstrike over its considerable losses.
Crowdstrike Responds
Crowdstrike has now issued a formal response to Bastien’s claims, with CrowdStrike’s lawyer Michael Carlinsky sending a letter to Delta’s lawyer David Boies on Sunday.
“Highly Disappointed”
Carlinsky’s letter claimed that the company should only owe less than $10 million in liability for the cancellation and that the company was “highly disappointed by Delta’s suggestion that CrowdStrike acted inappropriately and strongly rejects any allegation that it was grossly negligent or committed willful misconduct.”
Contributing to “Misleading Narrative”
It claimed that the airline’s lawsuit and its CEO comments were contributing to a “misleading narrative” that Crowdstrike should be held responsible for Delta’s response to the outage.
Compared to Other Recoveries
The letter pointed to other airlines and businesses across the country who are Crowdstrike clients and yet recovered from the outage within a day or two, while Delta floundered for the better part of a week.
Refuting Bastien’s Claim
But most damning of all was the company’s denial of Bastien’s claim that Delta received no offers of assistance from the software company.
Assistance Was Offered
“CrowdStrike’s CEO personally reached out to Delta’s CEO to offer onsite assistance, but received no response,” the letter claimed, referring to Chief Executive George Kurtz.
Failure to Take Responsibility?
Overall, Crowdstrike’s legal counsel presented an image of Delta as a company that had responded inadequately to system problems in the days following the July 19 outage and was now failing to take responsibility and heaping the blame on Crowdstrike.
Explanations Will Be Required
“Should Delta pursue this path, Delta 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,” the letter said.
Preparing to Defend Itself
Now, the software company plans to “vigorously” defend itself against any potential litigation from the airline.
The First Lawsuit Rolls in
Crowdstrike has already been served with its first class-action lawsuit pertaining to the outage. Shareholders, represented by US plaintiffs law firm Labaton Keller Sucharow, filed the lawsuit in federal court in Austin, Texas.
Claims of Misleading Shareholders
Shareholders claim the company committed fraud by making claims about its technology and software testing that were false and misleading, leading to losses for shareholders.
Crowdstrike Shares Plummet
In the 12 days following the outage, which affected 8 million computers worldwide, Crowdstrike shares fell by 32%, effectively losing $25 billion in market value.
Department of Transportation Investigates
Delta Air Lines canceled more than 5000 flights from July 19 to 25, prompting an investigation by the U.S. Department of Transportation, which is seeking answers as to why Delta took so much longer to recover from the outage compared to its rivals.
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