Delta CEO offers employees free flights after CrowdStrike-Microsoft chaos

Delta Air Lines CEO Ed Bastian on Friday offered employees two free travel passes to thank staff members who were caught in massive disruptions last month sparked by a botched CrowdStrike software update that stranded thousands of customers and crew.

Delta had more trouble than competitors in recovering from the outages that took thousands of Windows machines offline around the world, affecting industries from health care to banking.

The carrier canceled more than 5,000 flights between July 19 and July 24, more than it did in all of 2019, according to FlightAware. Bastian said earlier this week that the incident cost the company about $500 million, a sum that is equal to about 40% of Delta’s second-quarter profit. A crew-tracking platform was a contributor to the cancellations and disruptions, the airline has said.

Delta told CNBC’s “Squawk Box” on Wednesday that the airline had to manually reset 40,000 servers.

The disruption “has been a humbling moment for our company,” Bastian said in his note on Friday, which was seen by CNBC. “I know it’s been extremely difficult, and I’m deeply sorry for what you have endured. An operational disruption of this length and magnitude is simply unacceptable — you and our customers deserve better.”

Upward of 4,000 Delta flight attendants picked up more than 6,100 trips during the disruptions, receiving extra pay, according to another Delta staff memo on Friday.

“Your efforts throughout have been nothing short of heroic,” Bastian told staff.

The two “positive space” passes Bastian offered employees are confirmed seats like a customer would have, different from the free standby flying airline employees often do if there are available seats.

The Delta organizing committee of the Association of Flight Attendants-CWA, which is in the middle of a campaign to unionize Delta’s flight attendants, said the offer of passes “just isn’t going to cut it.” The organizing committee, in a written statement, said airline management routinely makes “meager adjustments to keep the operation running without making changes significant enough to prevent a future meltdown.”

Delta’s operation has since stabilized but the flight cancellations and delays stranded thousands and scarred Delta’s high reliability standings. Its executives frequently point out Delta’s successful work to win over both leisure and corporate customers who are willing to pay more to fly the carrier, marketing itself as a premium airline.

A Delta spokesman earlier this week said the airline has processed “thousands” of refunds and reimbursement requests. 

The U.S. Department of Transportation is investigating Delta’s disruptions, Transportation Secretary Pete Buttigieg said last week. Similar disruptions at other carriers, such as the massive 2022 holiday meltdown at Southwest Airlines after winter storms, have highlighted how technology issues can severely disrupt air travel.

Bastian said Delta plans to pursue legal action against CrowdStrike and Microsoft “to recover our losses caused by the outage” and that it has hired law firm Boies Schiller Flexner.

Microsoft declined to comment. CrowdStrike said it has “no knowledge of a lawsuit and have no further comment.”