AirKarp

System crash muddies Delta’s reliability reputation

by Aaron Karp
Aug 10, 2016

The technology failure is a significant negative mark on one of Delta’s key brand claims.

The line between stellar operations and calamitous operational failure is fine and fragile in the airline business. Delta Air Lines is not the first airline to be felled by a technology failure—and it won’t be the last.

But the Aug. 8 system crash that led to more than 1,900 canceled flights and hundreds of delays over three days is particularly devastating for Delta, which has made operational reliability a core component of its brand. It is also a setback for a company that spent hundreds of millions of dollars on technology safeguards that were supposed to prevent what happened this week.

When I spent a day at Delta’s Atlanta headquarters this past spring, executives from CEO Ed Bastian on down repeatedly brought up the carrier’s operating performance advantage over rivals American Airlines, Southwest Airlines and United Airlines. Bastian spoke of “100% completion factor days”—days on which every Delta mainline flight arrived at its destination (save for flights that may have been canceled for air traffic control issues outside Delta’s control). Delta, Bastian noted, had more of these days than American, Southwest and United combined. Indeed, until Monday’s system crash—which was caused by an early morning power failure at Delta’s headquarters, followed by key systems inexplicably not switching over to redundant backup power—Delta had canceled fewer than 300 flights in all of 2016. Delta’s fleet is older than American’s or United’s, but it had insisted operational reliability mitigated this disadvantage.

“This isn’t who we are,” Bastian said in a one of several apology videos Delta posted online in the aftermath of the system failure. This week’s episode won’t be ruinous for Delta—one advantage of earning more than $17.5 billion in net income over the last five years is that the company has some room for error. The airline will recover. But beyond the monetary hit Delta will incur in its third-quarter earnings, the events of this week are a significant negative mark on one of Delta’s key brand claims—that it is operating the best, and most reliable, airline in the world. Bastian and other executives will have to cool it for a while on the operational reliability horn tooting, or risk being heartily mocked.

Delta’s system crash and the disruption it caused for passengers around the world has been a major global news story, and the reality is that most of the general public does not follow “completion factor” statistics. Fairly or not, Delta’s operational performance before this week is now largely irrelevant. Delta executives will have to accept that the system crash will be the first thing most people think of when they hear the words “Delta Air Lines”—at least for some time.

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