Atlanta-based Delta facing class action lawsuit over tech outage; customers seeking refunds

August 9th, 2024

Delta Air Lines is facing a class action lawsuit, which claims the Atlanta-based airline refused to give refunds following a global technology outage last month. The airline replied that it will go after the tech companies behind the snafu.

Among airlines, Delta was by far the hardest hit by the outage, having to cancel roughly 7,000 flights over five days, because key systems were crippled by the incident.

The lawsuit was filed Tuesday in the U.S. District Court Northern District of Georgia Atlanta Division on behalf of Delta customers impacted by the outage. In it, the customers allege that Delta refused or ignored their requests for prompt refunds for their canceled or delayed flights.

The complaint also claims Delta didn’t provide all impacted passengers with meal, hotel, and ground transportation vouchers and continues to refuse or ignore requests for reimbursements of those unexpected expenses.

“These unfair, unlawful, and unconscionable practices resulted in Delta unjustly enriching itself at the expense of its customers,” the lawsuit states.

The complaint states the plaintiffs are seeking refunds for all Delta customers whose flights were canceled or significantly affected due to the outage.

Delta did not immediately respond to a request for comment. But in a regulatory filing, the carrier said it will spend $380 million in the third quarter on customer refunds and compensation related to the outage. Other expenses total an estimated $170 million, but quarterly fuel expense is estimated to be $50 million lower due to the cancelations.

The U.S. Department of Transportation is investigating why Delta failed to recover as quickly as other airlines. Transportation Secretary Pete Buttigieg said last month that the department would also examine Delta’s customer service, including “unacceptable” lines for assistance and reports that unaccompanied minors were stranded at airports.

On Tuesday, Microsoft announced that it was joining cybersecurity software firm CrowdStrike in fighting back against Delta, which blames the companies for causing several thousand canceled flights following the July outage.

A lawyer for Microsoft said that Delta’s key IT system is probably serviced by other technology companies, not Microsoft Windows.

Delta CEO Ed Bastian previously said that the global technology outage that started with a faulty upgrade from CrowdStrike to machines running on Microsoft Windows cost the airline $500 million. Bastian raised the threat of legal action.

He confirmed that in Thursday’s filing. Bastian said, “We are pursuing legal claims against CrowdStrike and Microsoft to recover damages caused by the outage, which total at least $500 million.”

On Tuesday, Delta said it has a long record of investing in reliable service including “billions of dollars in IT capital expenditures” since 2016 and billions more in annual IT costs. It declined further comment.

CrowdStrike has also disputed Delta’s claims. Both it and Microsoft said Delta had turned down their offers to help the airline recover from the outage last month. Microsoft’s lawyer said CEO Satya Nadella emailed Bastian during the outage, but the Delta CEO never replied.