Airline Compensation Payments Spike 200 Percent Amid Global IT Outage

by Mia Taylor
Last updated: 1:25 PM ET, Fri July 19, 2024

With the impact of a massive IT outage still being felt worldwide by airlines that are canceling and delaying flights, the number of compensation payments being issued by carriers has increased dramatically.

An executive from Swiipr, a company that provides travelers with compensation payments from the airlines, says it has “been working overtime today assisting our airline partners to provide compensation to passengers stuck at airports all over the world.”

“Swiipr has today seen a more than 200 percent increase in compensation payouts compared with a normal day, and this continues to spike,” said Swiipr CEO Tara Spielhagen. “We expect this to continue over the weekend as today’s events will have a knock-on effect on airlines.”

A vendor technology issue impacted airlines and businesses around the world between late Thursday night and early Friday morning. The issue was attributed to a CrowdStrike update which caused a global Microsoft outage.

The IT issue impacted Frontier Airlines first, late Thursday night, according to CBS. And not long after, several other major airlines were impacted, including American, United and Delta, all of which requested ground stops from the Federal Aviation Administration around 2:30 a.m. Friday.

As of press time, Delta Air Lines had resumed some flight departures.

Plane parked at JFK airport in New York.

According to Reuters.com, Microsoft officials revealed that some users experienced issues accessing various Office 365 apps and services due to a "configuration change in a portion of our Azure-backed workloads.

Cybersecurity firm Crowdstrike told Reuters that the “defect” was found in a “single content update” for Microsoft Windows hosts. As a result, more than 18,000 worldwide flights were delayed on Friday morning, with another 1,655 being canceled, as of 7:45 a.m. ET, according to Flight Aware.

The carriers were forced to issue temporary ground stops due to “communication problems.”

Amid the IT issues, airports and airlines are advising travelers to check the status of their flights online before arriving at the airport and, if their flight is still scheduled, arrive earlier than planned to deal with any potential delays.

Some international airports have reverted to a manual check-in process to avoid flight operation interruptions, but many facilities reported being back online a short time later. The Federal Aviation Administration (FAA) said it was “closely monitoring the situation.”

Spielhagen, of Swiipr, said passengers impacted by the issue are not likely to be entitled to flight compensation.

“It will almost certainly be considered an extraordinary event, being something that was outside an individual airline’s control,” Spielhagen said.

“However, in the UK and other European countries, passengers are still entitled to assistance during extended delays even in such circumstances, for example, the provision of food and drink while they wait for their journey,” Spielhagen added.

In many other countries including the US, airlines also have to provide assistance to their passengers under their terms and conditions.”