Delta Crashes… Air Line Nosediving?
On Friday, President Donald Trump signed an executive order halting refugee access for 120 days. He also halted travel from seven predominantly Muslim countries. As a result, protesters mobbed airports around the country, causing chaos for travelers. And while those actions certainly took a toll on airport congestion, there appears to be another culprit equally involved; Delta Air Lines. What’s going on at Delta? Should shareholders be worried?
What Exactly Happened?
Airline travelers had a frustrating weekend thanks to protests. Even taxi drivers got involved, as the New York Taxi Workers Alliance temporarily paused service to JFK Airport in a show of support to those affected by Trump’s executive order immigration ban, which many see as a ban on Muslims. But while everyone focuses solely on the scene from Trump protests at major airports throughout the country, people are missing some serious issues from Delta Air Lines, which could absolutely have added to travel frustrations and should be seen as red flags.
Put simply, Delta crashed. Well, not its planes, but Delta’s computers.
Delta’s systems went down Sunday evening around 6:30 PM, taking down all “essential IT systems”. As a result, at least 280 Delta flights were canceled, leaving thousands of Delta passengers stranded. The expense of housing and feeding passengers for an airline can be huge, so to have to do so for thousands of passengers at once can be a big hit for a company. However, the bigger hit comes in not doing anything at all for them and risking losing long term, repeat customers.
Delta chose to go with the latter option, only offering waivers for the cost of changing flights for those passengers scheduled for travel between January 29th and 30th – as long as they rebook by February 3rd.
The lack of customer service and compensation is sure to lose the airline a significant chunk of customers. But the real concern is that this isn’t a new problem. In fact, it’s quite a recent problem, as Delta Air Lines suffered a global outage less than 6 months ago.
That system outage was disastrous, with Delta canceling more than 2,300 flights, stranding tens of thousands of passengers, and costing the company more than $100 million. And while that fiasco was blamed on a fire at its command center, this newest computer problem doesn’t seem to have a culprit. Shareholders should be concerned. Between its lack of customer service and its tech problems, the country’s second-largest airline looks to be running out of gas.
Watch the news from CBS This Morning for more update on the delayed Delta flights:
Shares of Delta Air Lines, Inc. (DAL) stumbled DOWN on Monday, and should continue to do so until Delta takes action to bring customers back.
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