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Delta Air Lines (DAL.US) is facing a class-action lawsuit from passengers after rejecting a full refund for a "global chaos machine."

AInvestThursday, Aug 8, 2024 9:30 am ET
1min read

Delta Air Lines (DAL.US) is facing a class action suit from passengers who claim the airline refused to provide full refunds after a major computer failure last month that caused delays or cancellations, and refused to provide automatic refunds.

The suit alleges that Delta breached its contract by failing to provide automatic refunds, and only provided partial refunds after passengers signed a release waiving further legal claims. The plaintiffs also seek damages for expenses and inconvenience incurred by passengers who had to rebook with other airlines, hotels and restaurants.

It is not yet clear how many affected passengers will join the suit.

The suit states, "Plaintiffs bring this action to recover for all similarly situated consumers because Delta refused to provide full refunds to passengers whose flights were cancelled or significantly delayed by the Crowdstrike (CRWD.US) failure, which is unfair."

Ed Bastian, Delta's CEO, said the recent global technical failure cost the company $500 million. The airline giant said it plans to seek damages from Crowdstrike and Microsoft(MSFT.US) for losses related to the global technical outage.

It is understood that a software update glitch at cybersecurity firm CrowdStrike on July 19 caused blue screen of death on about 85,000 Windows computers worldwide, disrupting normal operations in the airline, banking and healthcare industries. More than 6,000 Delta flights were canceled.

Analysts warn that Delta's fight with customers affected by the global technical failure could have a negative impact on its reputation.

As of the time of publication, Delta shares were up more than 1% in pre-market trading. Delta shares have fallen 20% in the past six weeks, wiping out the gains made this year.

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