Delta Airlines Inc (DAL) reported its third-quarter earnings, revealing the significant impact of a historic technology outage that occurred during the summer. The outage, attributed to CrowdStrike Holdings Inc (CRWD) and Microsoft Corporation (MSFT), resulted in a $380 million revenue loss and a 45-cent hit to earnings for Delta. The disruption, which involved thousands of Microsoft Windows machines going offline, led to widespread flight cancellations and a prolonged recovery process. Despite the challenges, Delta’s third-quarter revenue still grew 1.2% to $15.68 billion. However, adjusted revenue reached $14.59 billion, falling short of analysts’ expectations. Despite the setbacks, Delta’s net income increased by 15% year-over-year to $1.27 billion. Looking ahead, Delta is optimistic about its fourth-quarter performance. The airline expects revenue to rise between 2% and 4%, fueled by strong holiday travel demand and improved pricing. This positive outlook is further supported by resilient travel demand and robust holiday bookings. Delta is guiding for fourth-quarter earnings between $1.60 and $1.85 a share, and even after factoring in the impact of the CrowdStrike outage, the airline expects full-year adjusted earnings to come in between $6 and $7 a share. Delta is actively seeking compensation from CrowdStrike and Microsoft for the summer outage. CEO Ed Bastian has confirmed that the company is pursuing potential damages from both technology companies, having hired prominent attorney David Boies to represent them. The summer outage had a significant impact on the airline industry, with Delta being particularly hard hit. The company received over 176,000 refund or reimbursement requests after canceling nearly 7,000 flights. The outage resulted in a slow recovery for Delta, knocking down its third-quarter earnings by as much as 26%. However, Delta remains confident about its ability to finish the year strong. The airline is well-positioned to report one of its most profitable fourth quarters, thanks to improved pricing and strong holiday bookings. The company’s resilience and strategic planning are clear indicators of its commitment to navigating challenges and achieving success.
Delta Airlines Recovers Despite Summer Outage, Eyes Profitable Holiday Season
