Delta’s Q3 profit fell below $1 billion after global tech outage led to thousands of cancellations
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Hey there, time traveller!
This article was published 10/10/2024 (726 days ago), so information in it may no longer be current.
Third-quarter earnings fell 26% at Delta Air Lines, which struggled to overcome a global technology outage that led to thousands of flight cancellations, and indications that growth in air travel is beginning to slow.
Delta earned $971 million, down from $1.31 billion a year earlier. Revenue rose slightly, but spending on labor, airport landing fees and its Delta Connection regional affiliate grew much faster, the Atlanta airline said Thursday.
Shares slumped almost 6% before the opening bell, dragging down other airlines as well.
It said Thursday, however, that it will return to year-over-year earnings growth in the current quarter. Delta figures to benefit from a pullback in flying by lower-cost competitors, and the airline is seeking compensation for the July outage that cost it $500 million.
CEO Ed Bastian said bookings for Thanksgiving and Christmas are strong, but he expects a brief drop in travel spending before the holidays while Americans fret about the outcome of the November elections.
July’s global technology outage occurred after CrowdStrike, a cybersecurity firm that provides software to scores of companies worldwide, deployed a faulty update to computers running Microsoft Windows.
The outage disrupted operations at thousands of businesses, including airlines, but Delta was hit particularly hard, prompting a U.S. Department of Transportation investigation into the reasons that it failed to recover as quickly as other airlines.