Victims List: After 5,000 Canceled Flights, Delta Still Struggles to Take-Off After Global Outage...

Well the casualty list keeps on piling up. After Crowdstrike infamously wreaked havoc after some poor IT tech unleashed the worst outage in history - airlines are definitely feeling the pain this Tuesday. 

(Source: Giphy) 

More specifically, Delta Airlines is the one making headlines for all the wrong reasons as its crew-tracking system has been the most affected. 

(Source: New York Times) 

Yesterday, the airline had canceled nearly 900 flights worldwide (a total of 5,000 since Friday). For instance, at Phoenix Sky Harbor International Airport alone, Delta accounted for 11 of the 15 canceled flights on Monday, and 74 cancellations over the weekend. In comparison, American Airlines, which has more flights out of Phoenix, only had 47 cancellations in the same period.

Delta's CEO, Ed Bastian, didn’t beat around the bush calling the glitch “deeply complex” as the outage nailed Delta’s crucial system. With flights already running at 90% capacity, finding alternative seats for stranded passengers was nearly impossible (See: “Where’s Waldo” for context)

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As expected, the fallout was immediate. Delta’s stock fell almost 2% by Monday morning. U.S. Transportation Secretary Pete Buttigieg stepped in with a genius idea that Delta needs to fix the issue and ensure affected passengers are compensated. “Uhhh ya think?” 

(Source: CNN) 

So in the midst of other big-name carriers getting back on track, why is Delta still spinning it’s wheels? Well, industry eggheads point to Delta’s initial response. Unlike other airlines that opted for delays, Delta chose to cancel flights outright. This decision made it harder to rebook passengers on already packed flights. 

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Keep in mind, Delta’s main hub, Hartsfield-Jackson Atlanta International Airport, is the busiest in the world, so while this usually works to Delta’s advantage, it also means coordinating flights and crews is dang near impossible when crap hits the fan. 

So naturally, this situation is a blow to Delta’s reputation as a reliable, premium airline. It’s also a wake-up call for investors. Delta has often been praised for its operational excellence, but this incident shows that ain’t nobody safe when it comes to IT hiccups. Heck, even the reliable “Did you turn it off and turn it back on” advice isn’t good enough with a massive outage like this. 

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But hey let’s look at it from another perspective: In the long run, it might push airlines to invest more in their IT infrastructure to avoid similar problems. Remember Southwest’s winter storm meltdown in late 2022? That fiasco cost them over a billion dollars and hurt their reputation.

(Source: AP) 

So to avoid even more reputational damage, Delta is offering travel waivers, meal vouchers, hotel accommodations, and even transportation to affected passengers. However, getting back to normal will take time. As Delta’s CEO said, it’s going to be a few more days before operations stabilize. 

So with that said, investors should keep a close eye on Delta. Until about 10 EST this morning Delta had plunged another -1.47% after the opening bell. But as of this writing, it’s showing a bit of a bounce back as the stock is surprisingly up 0.30% on the day.  

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Could Delta be on the up and up? Or is the stock just experiencing a minor retracement before the real fall? Only time will tell. But one thing is for certain, until Delta gets their IT back in order… It has a long road ahead of it. 

Stocks.News doesn't hold any positions in companies mentioned in the article.