Delta lost $100M on computer outage

Delta Air Lines said the computer outage it suffered in August, which cancelled thousands of flights, cost the carrier $100 million in revenue.

The loss translated to 2 points of passenger revenue for the month, as the outage that lasted three days forced the cancellation of 2,300 flights, according to the company. The cancellations dropped the airline's rate of completed flights, which it promotes heavily, to 98% in August from 99.8% for the same month a year earlier.

“We are grateful to our customers for continuing to rely on Delta for the superior customer service and operational performance you’ve come to expect from us,” CEO Ed Bastian said in a statement Friday. “Our recovery effort exemplified the hard work and determination of Delta people worldwide, and all 80,000 remain dedicated to regaining your trust.”

The airline said it would contact every passenger affected by the outage, offering ticket refunds, and offer travel and hotel vouchers.

Rahul Samant, Delta’s chief information officer hired in February after stints at AIG and Bank of America, said Tuesday he began a multi-year transformation of the carrier’s information technology for applications, cyber security and data even before the outage.

“Delta is the world’s most reliable airline, and IT has a foundational part to play in keeping aircraft flying safely and on time. Those are the table stakes,” Samant said in a statement Tuesday. “The entire leadership team is committed to ensuring that kind of event doesn’t happen at Delta again.”

Other airlines have suffered computer outages, too, which technical experts have blamed on antiquated equipment and the failure of backup systems. British Airways suffered the latest problem Monday with check-in problems at London's Heathrow and Gatwick airports, and the airline advised travelers to check in online before heading to the airport.

Southwest Airlines' had a router failure in July, United Airlines a year earlier blamed a router for an outage as it merged computer systems with the former Continental Airlines. In April 2013, American Airlines had an outage that canceled hundreds of flights during its merger with the former US Airways.

Delta's revelation in a regulatory filing came as the company announced that August passenger revenue was down 9.5% compared to the same month a year earlier. The airline blamed weakness in domestic yields, too much capacity flying across the Atlantic and the exchange rate with the Japanese yen.


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