It’s been a rough month for one of America’s biggest airlines, and it’s about to get tougher. One of Delta’s top executives is officially leaving the company as it deals with with legal conflicts and a federal investigation.
Executive Farewell
One of Delta Air Lines’s leading executives has left the company, according to a company memo circulated by Chief Executive Ed Bastian.
Switching Companies
Delta’s Chief Operating Officer Mike Spanos is set to leave for a new role with another company, as the airline deals with a PR and legal nightmare in the wake of the global CrowdStrike tech outage.
Global CrowdStrike Outage
On July 19 the outage from the latest update of CrowdStrike, one of the world’s foremost cybersecurity companies, caused a system meltdown at Delta which dominoed into five days of flight delays and cancellations affecting hundreds of thousands of customers.
7000 Flights Canceled, $500M Lost
During that period, Delta cancelled over 7000 flights. The cumulative cost of the outage has been estimated at around $500 million.
Unfavorable Comparisons
The company has since been grilled for how it handled the outage, as it regained its footing at a snail’s pace compared to other US airlines that also relied on CrowdStrike software.
Federal Investigation
And the most significant scrutiny has come from the federal government. The U.S. Department of Transportation has launched a formal investigation into the thousands of customer complaints Delta received, and why it took so long for the airline to bounce back.
Unrelated Departure
Since high-ranking executives at the company have come under fire for the outage fiasco, the timing of Bastien’s departure has attracted some attention. However, Bastien’s memo and comments he made publicly earlier this month suggest that the two events are not connected.
Plans Made Prior to the Outage
He reportedly notified Bastian earlier this year that he was considering options with other companies, and confirmed his decision to leave before the outage occurred. According to the SEC filing made by the company, Spanos’s departure will be effective on August 31.
One Year at Delta
Spanos has worked as Delta COO for just over a year, during which he earned a whopping $8.6 million in compensation. Following his departure he will receive severance benefits and 18 months of base salary.
He Was Not Responsible
Bastian has previously maintained that Spanos’ was not responsible for the company’s beleaguered response to the system outage. “He wasn’t the person that we were relying on to make the decisions,” he said in an interview with the Wall Street Journal earlier this month.
COO Obligations
Chief operating officers are typically responsible for the day-to-day running of the company, which they then report to the CEO. However, Delta has said that President Glen Hauenstein usually played that role at the airline.
Was He Responsible?
It is still unclear to what extent Spanos was involved in the company-wide response to the outage.
Praising Spanos
“Since joining Delta, Mike immersed himself with our frontline teams, prioritizing safety first and always,” Bastian said in the employee memo last week.
“Humble and Empathetic” Leadership Style
“He embraced our servant leadership philosophy and fostered strong connections with the people of Delta through his humble and empathetic style of leadership,” the memo continued.
No Replacement Plans Yet
As of yet, the company has no plans to replace Spanos with a new COO. Instead, executives John Laughter and Allison Ausband will now report to Bastian in a similar capacity.
Unfortunate Timing
Regardless, it’s a tough time for Delta to lose one of its leading executives. Aside from federal investigations and public scrutiny, the company has also acknowledged the possibility that they will file lawsuits against both CrowdStrike and Microsoft for the outage issues.
Microsoft Involved Too
Delta was using Microsoft Windows as its operating system, and it was this system that was affected by the faulty CrowdStrike update, hence the tech giants’ involvement in this debacle.
Pointing the Finger
The airline has maintained that both tech companies are partially liable for the mass delays and cancellations because they failed to offer sufficient assistance during the outage.
Both Airlines Deny It
Attorneys for both companies have denied liability. Letters from their legal counsels both claimed that they offered direct assistance to the airline following the outage and their offers were either ignored or declined.
Class-Action Lawsuit
Delta is also facing a pending class-action lawsuit, filed in the U.S. District Court in Northern Georgia on behalf of a group of customers who claim the airline ignored and even refused their requests for refunds after their flights were canceled due to the tech outage.
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